I’ve been trading live, with real money, for just under 2 weeks now. I’ve traded 6 live sessions and made a total of 9 trades. And although I wanted to wait to discuss trading as a monthly segment, I like to blog about what I’m currently working on so here we are. I also have a few buds and former colleagues at the bank that keep asking me how my trading experience is going so here’s the update.
Results
6/9 Trades = 66.67%
3 losses
This number should really be 7/9 and 77%. On my first trade, I bought HOU and sold at what I though was a gain, only to realize that the gain was actually a small loss because of ECN fee’s #rookiemistake. Unfortunately the free commission on the buy for ETF’s isn’t totally free. However, it’s still much cheaper than other brokers, by a long shot. And it did end up being a good learning experience right off the bat. The other good news is that my strategy, which was developed with paper trading, works in the real market. I definitely intend to get that 66.67% number back around the 85% and up range since that’s where my paper trading results ending off. I certainly consider my first 6 days trading to be a success and I’ve been learning a lot since there’s no better teacher than experience. I’ve also noticed that there really is a different mindset when comparing trading with real money to paper trading. I now believe even more firmly that paper trading is absolutely essential before using real money. The last 6 months of practice have really paid off in my ability to make a quick decision.
“I think that stocks have been this tremendous, tremendous equalizer for people in this country. Guys who can’t make a lot of money at their jobs have been able to make a lot of money in the stock market.” – Jim Cramer
My 1st day trading with real money was exhilarating to say the least.
I normally like to trade in a very systematic way but on this day I nearly went blank. My day off began around 7:30 AM to get set up and because I had to call into the brokerage. Then I ended up finishing the trading day around 12:20 PM. I made 2 trades during that day that I probably shouldn’t have and was lucky to come out profitably.
I began noticing how much more I love the IQ Web platform compared to what I was use to for trading right away. One of the best features is that it actually alerts you with a ding sound and a notification pops up once an order is filled. This a major advantage as opposed to flipping between screens to check the account activity and order status pages. That’s super inconvenient and slows you down when seconds can be critical. I must say that my first day using the platform was great. I also had to call into discuss my account twice and the customer service was fantastic, and this is during tax season. Call waits were not long at all. The representatives were informative, patient, and easily handled the reasons I called. You can open an account with Questrade and receive $50 in fee trades by going through my affiliate link posted above.
“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” – Peter Lynch
What about the 3 losses?
I mentioned in the first paragraph that one of the losses was because of the ECN fees. The other two were just simply bad trades. On Tuesday March 1st, my 2nd day trading, I was eager to get the month started. I didn’t stick to my exact strategy and let emotion get the best of me. I made 3 trades during the session and only 1 was profitable. Lesson learned. It was better to get some losses out of the way early to strengthen my understanding of my strategy. Which as of right now is essentially the following:
- 1 Trade Per Day
- Go with direction of Crude
- Trade between 9:30 AM to 12:30 PM Eastern. Preferably between 9:30 – 10:30AM.
- Find a resistance level on the Crude Oil Future Candle Sticks.
- Match a resistance level to volume of the equity I’m looking at.
- Find a demand/supply area to buy based off volume and resistance level of crude.
- Buy near the low of the day’s session of the particular equity you’re trading.
Stick to the Formula!
Take today for example. I usually trade in the direction of Crude Oil Futures was planning on buying HOU this morning because when oil rises, it rises. Side note, the other tricky detail to remember is that on Wednesday’s, oil inventory numbers are released. I usually don’t like to trade on news but I do like like trading on people’s indecisiveness prior to a news release. So today before 10:30 AM Eastern, and as I was following HOU and crude futures, I changed my game plan from HOU to HOD because I noticed volume was low and there was a clear resistance level. This was only before 10:30 because after the inventory numbers came, oil spiked. I quickly traded in and out of HOD from 18.43 and sold at 18.56, taking a nice quick profit. This decisive change of strategy would’ve never been possible if I hadn’t of paper traded and seen this scenario before.
“If markets were rational I’d be waiting tables for a living” – Warren Buffet
What else have I learned about trading?
Well I’ve strengthened my morning structure when preparing for a trade. I usually start by writing down my margin access, then the max amount I will allow myself to trade with for the day. An equity is selected, HOU or HOD depending on crude’s direction, and start preparing. I do a trial run of a buy and sell to calculate what the ECN fees will be and find out what my target sell price will need to be. I always have my target sell, stop limit, plans set before entering a position. But I’m also noticing the more comfortable I get, the more I’m able to make smarter decisions.
“By failing to prepare, you are preparing to fail.” – Benjamin Franklin
Going forward I want to continue to read, practice, analyze, improve, and then share the results on this blog. If there’s one thing I’ve learned, it’s to be even more prepared. I had stated that my goal for the month is to finish positive in trading and it looks like I’m on track. I look forward to updating you further on my learning and results.
Expense Report February 2016
