Trading Notes from Summer ’08 – 2010


Updated Jun 21st, 2021

The other day The market sold off pretty hard and i was holding a variety of puts with a few longs. I was looking at my P/L and on the month i was sitting pretty at a $750 gain. Instead of selling everything immediately i was fussing over a few positions and held them (PDC, CEL, and GNET) only to see them get hit hard in the following days and cut my “gains” in half. Over the weekend i was gloating on paper profits and was pumped on my performance YTD only to have the market slap me in the fucking face. DONT COUNT YOUR CHICKENS BEFORE THEY HATCH AND BE HUMBLE!!!

Goal: + 5% for 2008…Strategy: look at previous breakouts to see what makes a winning breakout a winner. Also, Should i focus on breakouts or tobox to catch breakouts as they happen?
Some things to learn from previous breakouts: Voume, Overall Mkt, Sub-industry, EPS picture, other key developments, short interest ratio, what stage base,

Get Relative Strength to SP-500 on charts

USO: ETF that tracks texas crude prices…UGA: tries to track prices at the pump- Use to hedge rising oil prices…Lock in fuel costs
Went Long Aug 25 CCk Call for 4.7 with stock at 29.47

New EPS data shows up quickly for stocks in both telechart and MSN
Did a BOP color test of 50 stocks and no succusseful breakouts were red…Some had red days following or preceding BO but none on the actual day….May provide good short opportunity..Refine study

There is merit in taking advantage of a move by selling a portion of a position to lock in profits or eliminate potential loss while leaving return on the table…I’m tired of seeing a stock move quickly in my direction and then erase its gains and turn into a loser.

Be careful of key levels on different timeframes: 1 minute, 15 minute, and daily are some of the big ones. Also be aware of earnings and dividends dates if holding stocks overnight…

Don’t forget about open orders. I had a buy stop order in for EQ and was autobought in without knowing it and had gain turn into a loss.
I’m curious about some other chart vendors such as ibrokers, realtick, tradestation, esignal, etc. There are different costs and functions
Bash the Noise, yes volatiliy is good for traders, that’s how we make our money but calm, tranquil, disciplined, emotionless trading is the way to go. Find a confident technical pattern with good risk/reward.

Trading is a rigged game and the odds are against you. That’s one of the reasons why I am determined at conquering it by generating above average returns over a longer time period…

I deleted Telechart today (2/24/09) and was kind of sad…I’ve spent a lot of time with the program and feel somewhat defeated as a lot of time seems to have been wasted for nothing- or was it wasted? What did i gain from telechart? Where did i go wrong? For onw thing i think the strategy was very labor intensive with very little reward. I spent countless hours each week, for a long time i was on a daily regime sorting thousands in stocks into sepearate lists.

9/27/08 is the date i opened my first IBFX demo account.

IBFX requires NFA registration although this is not mandatory for the industry so I may be able to manage money without registering. NFA registration: Company or individual. Must be completed within 90 days. This whole registration process seems pretty easy: just pass the 3 and send them some money for annual dues and filing an appilication. I’m sure there is more to it, it would be wise to talk to an attorney but i think it’s a relatively small hoop to jump through. In addition to a disclosure document that must be approved by the NFA…all promotional material including logo, advertisements, and websites, must be approved by the NFA.

I wish my capital could be traded in every session. Could I train someone to do what i do? And could i trust them with my capital?
I hove a though that the more money you have the tougher it is to move in and out of positions. And hence, the less money you have, the easier it is to move in and out of positions. I need to find the balance. Charging 20% of profit means i need to manage 5 times as much money to double my income. Is thta worth the added hassle of regualtion and investors? How much does a larger position affect performance? only one way to find out: trade it. This may be different as I move away from spot forex into maybe futures and options where there may be more liquidity/volume.

It may be wise to register for a manged forex account and cherry pick wealthy investors with seminars like “Jumpstart your Financial Life with a Managed Forex Account.” Explain how a high risk/high return forex portfolio can be watered down to provide consistent and impressive returns.
What’s the best tax solution for my trading considering healthcare, asset protection, and reducing tax liabilities?

Taxes: is a good source. Hypothesis: i can just file regularly as cap gains. Do i need to pay Self employment taxes (schedule C, C-EZ, or F)? If I want to entitize in 2010 do i need to do it before Jan 1? My 2009 Tax return will include forex gains, ETF Losses, capital loss carryforward, and student loan interest deductions. Can i have a forex trading IRA?
Can i get paid to blog about forex?
New NFA Rules: new regulations from the NFA, require 1% of the notional value of the contract for most pairs. In the past we have set notional value at 100,000 for a standard lot and 10,000 for a mini lot. We did this to make it as easy as possible for our clients. The new 1% margin requirement is calculated by taking Notional value of the base currency and converting it to USD. The base currency is defined as the first currency listed in the pair. For example a standard lot for the EUR/USD at a price of 1.5100 would have a notional value of 151,000 USD. Your margin requirement would be 1,510 or 1%. New margin Call is 65% (was 125%) and new stop out is 50% (was 100%). I NEED TO DECREASE MY LEVERAGE TO SAFELY MONITOR THE EFFECT THESE NEW NFA REGULATIONS HAVE ON MY TRADING STYLE. ALSO, THE GBP/USD PAIR IS HIGHLY CORRELATED AND MORE VOLATILE. THIS MAY BE A GOOD WAY TO SKIRT THESE NEW RULES.

Use debt to grow and not Equity
Can i go work a night/afternoon job and make a little bit of money and GET BENEFITS?

Do forex statemetnws quarterly and update on resume. This will reduce redundancy.

The accountblowup I suffered in early december 2009 is proof that I have to have stops. Even if i go back to the same style of trading I need to better protect my account. I either neither to trade with stops or have some other kind of emergency shut off switch. I froze on that monster trade and kept sending good money after bad. I remember contemplating whether i should’ve bit the loss when it was $300, $1000, $2000, $3500, $4500, $5500, and the loss ended up being over $6500 (with 2 mini lots still open).

At first Glance FX can be traded in an IRA (TAX-Deferred Growth!). Learn more about this and Do IT. A good exit plan would be the first time home-buyers program. Learn more about strategies.

Statements for months prior to FIFO are on webiste under platform journal. All statements after new NFA rule are on the website in FIFO format and may differ from the MT4 platform. There will be a platform carry forward of history every month? More info on the Money Manager program will be sent via email (must be registered with the NFA and have a series 3 license.)

When a position goes against you, you are early or wrong
look into hedging using options

Fix FX Strategy: Ideas
1) Must have Max account Loss
2) Max trade help (number of trades to average-in entry price)
3) Pay insurance premiums (ex: 1/3 account profit. 1/3 account growth, 1/3 insurance)
4) Don’t get greedy: trade less with lower leverage; stick to 20 pips a day
5) Move to more of a stop-loss strategy like median lines (longer time horizon, avoid getting stop hunted.