An Accountant's Journal

Atta Boy...

 

Ok, I don't know whats going on today. I sold Intel at 27.07, took a loss of 2%. That ate away at most of my profits since starting. Again my problem was not taking the loss earlier, when it opened below its close of yesterday I should have sold.

To make matters worse:

Seeing that GM was going crazy I got into it at 35.06, then it started taking a dive and I had to sell at 34.80, luckily there i kept to my stop loss limit. But still another loss which wasn't fun. I am done for today. Next week I need to get my game back together and really do well in order to meet my goals for the month.

~Accountant

 

careful there Acct....you're losing your discipline already....

also, it would've only made sense to buy INTC here if you believe it's going to break out from the trading range.

In other words, you bought it at the top...it's -already- climbed for weeks. In fact, the longest string of green candles in years. Also, the semi sector, using SMH as a gauge, was also peaking at the top of a cycle this past week. Not a good time to go long INTC...

ps; if you're going to play the announcements, you should start doing a recent-history check on each issue before you decide on it.

Out of the last 8 mid-quarter updates from INTC, 6 times the SPX has gone up the day OF the announcement, and gone DOWN the day after. So the odds favored INTC dropping hard after the announcement....which it did.

Stay focused and disciplined...pay more attention to the timing of your entries (cycle bottoms, not tops)...and good luck with your trading.

 

Accountant,

I do not post on this board often, but, because I myself am an accountant (or at least a non-practicing CPA), I feel it necessary to interject in order to point out a major flaw in your system. Why are you sticking with Scottrade?! It would take you a couple of hours (or less) to open an account with Interactive Brokers and you would save yourself a fortune.

Let’s just run through the math. Using the example you offered in your first post, if a stock is trading at $30.00, your profit goal is $30.30 and your stop loss it at $29.80. Let’s just assume you’re trading 100 share lots which would give you a $30.00 profit and a $20.00 loss. Now let’s factor in commission charges.

$30.00 - $14.00 = $16.00 in profit

$20.00 + $14.00 = $34.00 in loss

In other words, you’ll need to produce a win rate of around 70% in order to breakeven. Do you really think that’s possible? You’re going to need an 80% win rate in order to make any money at all. Let’s examine what would happen at Interactive Brokers:

$30.00 - $2.00 = $28.00 in profit

$20.00 + $2.00 = $22.00 in loss

In other words, you’ll only need to produce a win rate of around 45% in order to breakeven. In my opinion, that’s much more realistic.

I think you need to use your accounting skills and realize what you’re doing. If I were you, I wouldn’t take another trade with Scottrade. I would open an account with Interactive Brokers forthwith.

These figures don’t even factor in slippage. Interactive Brokers will get much better fills than Scottrade.

This isn’t complicated math.

Good luck with you trading.

 

Anchor, His fills might be consistently better too allowing him to enter and exit more quickly.

Accountant, Anchor's math seems correct and you could also adjust your brackets wider if you wish, with those new, lower commissions.

It seems like you should stop this Journal and move your funds, and return. We will all be interested to read how you do.

What ever you decide, good trading to you...Take your time you have the rest of your life.

Michael B.

 

Accountant,

I concur with the priuor two posts. I would also caution you that the mindset of needing to make back what you lost on these two losing trades is very dangerous. They were losers, and maybe not the greatest ideas, but you take your medicine and move on. If you start thinking in terms of "I need to get that loss back", the next thing you know you will be blowing stops, overtrading, etc. Just stick to your plan and let each trade play out on its own.

 

I realize I lost my discipline on this one. It was a mistake and I learned from it, Luckily that mistake didn't cost much more than a winning streak. I'll no longer play news announcements as they are an easy way of getting hurt - did it on both INTC and GM on friday, preferably I will try to look at stocks that have no news going on for that trading day. I'll be back next week sticking to my strategy and having fun.

 

Hello:

I have a moment to check in here. I read the posts. As usual, the original poster is a retail trader who "knows" what he is doing (they all do).

I'll be brief. Accountant, there is no need to read this. I understand that you have made up your mind. This following is my professional opinon.

The system has (in my opinion) no edge. One of the problems with it is the preponderance of program trades that hit the market at specific times. Another is the institutional reaction to reports that come out at specific times. Finally, the original poster simply does not have enough experience in this market.

Based on the posts I read, the gentleman is entering (and exiting) at precisely the wrong times. Because he is a "weak hand" he cannot maintain a position long and so periodically institutional programs and reactions to reports cause his stops to get hit. As long as the market continues to chop rather than trend, the result will tend to be random, and the account will display the tendency to bleed until it goes to zero or is closed out.

I would prefer to say something else frankly. It would be nice to read that a new member had taken time to obtain a significant edge before risking money. So far, not one example that I can think of.

Naturally I wish everyone better luck in the future.
Lefty

 

I am no longer trading 100 lots. I don't feel I am getting killed on commissions that hard either. The math is all corect in what you're saying, but I really like scottrade as my broker, and prefer them. My fills aren't a problem either, actually I was surprised when I first starting using them because I heard everyone on this board saying they don't get the price they want most of the time, 9/10 I get what I want with scottrade.

Success rate since trading live on 5/6/2005 is 7 wins 4 losses, thats 11 trades in a month with 4 losers, nothing that bad, I would like it to be 75% because that would work better with my strategy, but nothing is set in stone in this world.

Thanks for your input!

 

Thanks Lefty.