Registered: Jun 2005
01-10-10 11:37 PM
I would like to say good job for last year, but when i did the math for your first two trades (POT & SPY and not calculating the options that you bought which was minimal anyway) and figured what you would've made if you had just bought and held all year, you kind of left alot of money on the table. You closed the year with 502k, but if you had just bought and held, you would've closed the year with about 660k or so (I didnt factor in margin costs in that figure, but assuming 12% per year on 500k of margin and you still come up cashing out end of year with an extra 100k in your pocket.
You made a 57% return for the year and you used what...3 to 1 margin? 4 to 1 margin? The Dow is up 26% from when you started trading on Jan 15 2009. At that rate of margin, you should've been up at least 75% to stay even with the market.
Not saying you did bad though, but just dont pat yourself on the back too much or let others pat you on the back until you are outperforming the market in real terms. It can throw you off if you see you made a huge return in % numbers and dont factor in margin to that play. A trader that makes 25% returns on a cash account is a better trader than one that makes 75% returns on a 4 to 1 margin account. Dont get "Fooled by Randomness"
Good luck next year. If you do take 400k to 4 million by year end this year, you will know you are a good trader (as long as the dow doesnt go to 35,000 by year end, then you would still just be trading alongside the market at 4 to 1 leverage)