I just wanted to check in here after being away for quite some time. I have been extremely busy at work trying to grow my practice and frankly just keep my job. This career requires so much time, effort and dedication that it is hard to make time for anythign but work in the first year or two. I am enjoying the journey so far, and have made a little money along the way. Hopefully next year will be a huge opportunity for me, but a lot of that depends on how well the economy does in the first two quarters.

Hope everyone is well,

-Ainkurn

Again it has been over a month since I last posted on how things were going. The last few months have been great for me and the profitability came at a great time (the light at the end of the tunnel was getting very dim). This job is very hard even when you are profitable but almost impossible to endure at times when you are losing. I have been doing this full time for almost 2 years and am just now seeing my first consistent profits. I have questioned my decision to do this many times but the longer I do it the more it seems that it’s what I was meant to do. The more I do it the more potential I see in the markets and in myself. Nothing is written is stone, especially with this type of work, but I see myself continuing to build, continuing to grind it out, continuing to gain confidence. I have been profitable 9 out of the last 10 weeks and am averaging about 1,200 in gains a week. Seven of the last ten weeks I have have made 1K+ and 4 of those weeks have been 2K+. I have even had a few 2K+ days!! Although the profits are great that does not begin to tell the whole story. My one down week was a large loss, at 2,700, for the week. I lost most of the money in one really bad day where I was down over 3,400 before working the loss down significantly. I reviewed the week that Saturday and was confident I could come back the next week. The following Monday I lost 600+ and then proceeded to lose 1,200+ on Tuesday. So in the last 7 trading days I had lost 4,500 dollars and was well on my way to another big loss in the first two days of the new week. Instead of harping on the negative I stayed focused and was able to put together two strait days of 1,500+ gains on Wednesday and Thursday to end the week profitable. Early in October I had similar scenario where I was down through Wednesday of that week and then lost 900 on that Thursday. I was looking at a relatively large loss for the week and was down over 1,800 at one point on Friday but came back and made over 3,100 in GOOG and once again I was able to end the week slightly positive. Being able to take losses and come back to profitability is one of the biggest changes I have noticed in my trading. I can take losses now because I am confident I can get them back. Losing is a part of trading and you have to be able to take a loss and keep going. I recently bought a book called “Zen and the Art of Poker”. In the book there are numerous rules for playing poker effectively and profitably. The rules can very easily be applied to trading and #20 stood out to me. To me it defines trading to a tee. The rule says: “The true journey of mastery is in each moment”.  The gist of the rule is that poker, like trading, is a never finished journey. About the time you think you have it figured out new events and tribulations come along and prove you wrong. This continual learning process was defined by George Leonard as the “goalless journey”. There is no finish line: the journey itself is the destination. According to Leonard each minute, every moment, every day is the goal. I feel the same about trading: every trade, every minute, every day is my goal and I achieve my goal each day because I am a trader. I know this post is long but also wanted to post a few charts from the last few weeks:

It has been a while since I have posted anything up on the blog about what has been going on in my life and more importantly with my trading. I am still trading full time and glad that I have been able to trade through the historic markets that we are seeing right now. It has truly been amazing to see some of the things that have changed and the events that have taken place. I have been able to adjust and have had some of my best trading gains in the last few weeks.

A few things have changed in my life and my trading over the last few months. I have moved to a neighboring town and have my house for sale (that could take a while). I am studying for my series 7 and  hoping to join a prop firm sometime next year. My approach to trading has changed some and things are getting better for me.

In my last post I talked about my need to take on larger than average size in an attempt to make a day profitable. The problem I am having now, its kinda a good problem to have, is that I am unwilling to take on more size when things are going my way. Just a few months ago that if I was down $200 on the day, I would stop trading and if I was up $500 I would consider that a great day and stop trading. Now it seem that on average days I am able to make $800 to $1,500 with out even trying ( I Know that can change at any time) and my losses are still relativly small. Today was a good example of my unwillingness to get aggressive with a market that I was reading well. I was up over $1,400 during the middle of the day but gave back some gains during the afternoon selloff. I felt very confident that we would rally into the close and that the selling was overdone. I immeditally wanted to be long 2000 of the SSO to attempt to catch the rally. The only problem was that I was unwilling to risk ANY of my profits in order to try and catch the move higer. I would realisticly had to have atleast a .50 stop and 1.00 would probbly be what I really needed. So I would potentally give back all my gains and go down 1k. Admittily, that would be hard to swallow but I was right about the trade and the entry I wanted would have allowed me to catch the move with limited risk. I did not take 2000, 1000, 500 or even 100 on the trade and missed a 1.00 move that could have put me up over 3k on the day. I am wondering if my reluctence to take such trades is a positive defense mechanism that is keeping my greed in check or if I am really to the place I can take such trades on occasion. I guess only time will tell but I am looking to take my size up some becasue my average share size is still only about 400 shares. Also I had been trading the financials exclusively since July but that changed with the sort sell ban. I was able to adjust but I have been trading many other names since then. I am looking to get back to trading a select few names and continue to sharpen my skills for reading my stocks, sectors, etfs and the market. I will try and keep more updates comming for the people who still visit the site.

I am a little behind on updating my progress here, but I have been in the process of moving. I will start work tomorrow morning at 8:00, and I am quite nervous. Now for the exam results.

I had planned on taking my Series 66 second, but I ended up having to squeeze my insurance testing in between the 7 and 66. I gave myself three weeks to study for the 66 but when I found out that I had to take my insurance test first, that really killed a week of preparation time. The Dept of Insurance here is really picky and you have to sign up for the test 5 days before taking the exam and you have to complete 20hrs of classroom study for each line of authority. Since the 7 covered Variable Annuities, I only had to get 40 hours of training before taking the exam, but I only had one week to complete the course.

The training is delivered as an on-line course through The University of Alabama, which made it possible for me to study long hours to complete the class. I started studying on Monday afternoon and my test was scheduled for Friday morning of the same week. I had to convince the proctor of the class to mail me my Certificate of Completion on Tuesday so it would arrive in the mail in enough time that I could take it with me to the test. After cramming for four day, I had to drive to Tuscaloosa, AL to take the test and then drive to Montgomery, AL to take my results to the ALDOI to get my license issued, and then drive to Birmingham, AL to meet with some people at work. The studying was pretty intense, but the material was very easy. I got to Tuscaloosa to take the computerized test and finished the 150 questions in just over an hour. I came out with a 93%, which is about what I was expecting.

Having lost a week of study to the insurance test, I wasted no time getting to work studying the material for my Series 66 exam. For those of you that don’t know, the Series 66 is the Combined Securities Agent and Investment Adviser Representative exam. It mostly covers state and federal laws such as the Uniform Securities act, The Investment Company Act of 1940, The Securities Act of 1933, The Exchange Act of 1934, and The North American Securities Administrators Association. It is very legalistic and many of the rules are slightly different between state and federal law, which adds a layer of complication. Going into this study process, I knew that I was not going to be able to devote the same level of concentration to my studies as I did for the Series 7 simply because I was tired of studying. I just wanted to pass the test, not try and impress with high scores.

I bought my study materials from Keir Education which included one study book and one practice test book. I took several of the tests and was scoring in the mid 70’s to low 80’s, which is what I was expecting. Two days before my exam was scheduled I talked to one of the recruiting officers at Ameriprise and she recommended that I take some online practice exams put out by Kaplan. These tests are meant to help you find areas of weakness in your study program. So, the night before the test I take one of these tests and it is NOTHING like the questions that I was accustomed to with my other practice exams. I was totally stumped and when it was over I scored a 68. I started to freak out and worry that I was a lot less prepared than I thought I was. My test was the next day at 11:30 so I stayed up till 3:30 reviewing, slept for two hours and was back studying again at 6:00. I then took another of these Kaplan practice tests thinking my late night studies would improve my score. My second attempt was another failure coming in at 62. At this point is is three hours before the exam, I have a 2 hour drive to the test center and I am in full freak out mode.

I was sweating bullets and studing while driving the whole way to the test center. I arrived about 30 minutes early and continued studying. I finally gave up and started the test 30 minutes early. Now I am not a superstisious guy, but when I got put on computer #13 I knew I was done for. I got to the first question and was a little releived. The further I went the more comfortable I got with the test and by the end of 130 questions I was confident  that I had done well on the exam. My score didn’t dissapoint, as I came out with an 80%. Not as good as the Series 7, but much better than I was expecting. I was disappointed by the fact that there was no summary of national scores for the test, so I don’t know how well I did compared to others.

I am finally through with all of my testing, and will begin the 10-week training period this week. I am hoping for the best, and if you need some financial advice you know my e-mail address.

-Ainkurn

Last week was a stressful trading week for me. I have been trading the financials almost exclusively, which has been tough with the volatility and choppiness. I am still working on perfecting my trading skills along with my chosen style of trading. My losses are very small but I am not taking them very well. I am trying to tell myself to judge my progress on my trading and not on my P/L but its hard to get over the frustration of even small losses.

I am finding a lot of things that are holding me back and finding ways to improve on them. My main problem this week was that I was not able to find good trades. Last week I found lots of winners but did not maximize. This week I could not get a good trade to save my life. I did improve on some of the things I noted in last weeks recap but I can’t fix them all in one week, so I still have more work to do. I guess it was just a bad week and that is all there is too it. I will move past it and focus on the positives. There will always be times when the trading is not good and the key to getting through that is to realize it and not take huge losses. This week I lost just over 500.00 which is an acceptable loss for a bad week.

If I had not taken a few larger than average trades in an attempt to pull my self back to profitability it would have been a much smaller loss. That is an issue I am dealing with right now is taking on too much size when I am down in an attempt to get profitable. I can see it coming sometimes during the trading day but have not been able to totally stop doing it. I should only be lifting my size when I am trading well and the market is giving me good opportunities.

Another development, in the way of trading problems, is my constant following of what “the market is doing”. I watch YM during the day and try and use it to help me judge direction. I have realized that I am following it too closely. I am studying what the market is doing instead of studying what my chosen stocks are doing. I have replaced the chart of the YM with a small chart of the Diamonds and a chart of XLF. This should help me remove some of my focus on what the futures are doing.

This is the first recap I have done in a couple of weeks because the blog has been having some problems. We finally got the site switched over to new hosting provider and upgraded our version of Word Press which will now allow me to put images into my posts once again. After the last upgrade word press would not allow me to insert images into a post and that has been fixed with the new upgrade.

I have stopped doing daily recaps on the blog and started keeping a journal in Microsoft Word. I started doing it this way because it is much easier for me to put down my thoughts about a trading day when I know no one else will read it. It’s not that I don’t want to share my thoughts with other traders but the fact that it takes me twice as long to complete the task when I know it will be on the blog for anyone to read. Also, the quality of my journal has increased dramatically which should help me pinpoint mistakes and improve my trading, which is the purpose of keeping the journal. So for now there will only be weekly recaps about how I traded and things I want to improve on. Also I have started recording all my trades with Camtasia and review them every afternoon after the markets are closed. I am averaging about 2 hours of video a day. I usually spend at least 1.5 hours completing my journal and reviewing trades everyday. So I am spending an extra 3 to 4 hours a day, writing the journal, reviewing and editing charts and watching the video from my trades. This is a great help in revealing mistakes that I make and allows me spend many more hours watching and reviewing my trades. The video is especially helpful because I can get totally involved with watching the trades and even feel the worry or anticipation that I feel when I am actually in the trades. Its also helping me to pickup on things that I do when I start to get nervous about a trade. Knowing these things will help me to recognize them in the future so I can learn to take a few deep breaths and not let my emotions dictate how I trade.

On to the weekly recap of my trading. I ended the week profitable but only slightly. I missed my weekly goal of $1,000.00 in profits by about $800.00. That’s a big miss!!! The problem came from an old cliche about trading: Let your winners run. There were multiple instances of me being in a winning trade and exiting before there was any sign that the trade was slowing down. I’m not talking about instances where a trade will pause during the middle of a trend, trade sideways to slightly up and then resume in its current direction. No, I’m talking about taking a short trade and the stock does not print a single green bar but I am exiting anyway, only to see it move straight down another dollar. I even go back and watch the video and hear myself saying: ” I think I’m getting out now even though I believe it will keep going my way and has showed no signs of moving against me”. That’s messed up. So I know I have to figure out why I am doing this and either be able to fix it mentally or mechanically, i.e. trailing stops. Also i have found multiple instances of over trading during the middle part of the morning. I want to make money so I am attempting trades when the market has no real direction and just chops around. Got to fix that!! There were also two or three times when I would exit a trade before my stop was hit only to see the trade go my way very quickly. I would feel anxious about losing money on the trade, even though my stop loss was well within my average loss limit, and just bail so I would not have to feel the anxiety of having a possible loser. And then when the trade would start to go without me I would revenge trade and lose money. So instead of keeping the winner and making $400.00, I exit, jump in another stock and lose $160.00. Another problem to fix.

Now a few positives about my trading. I had a six day winning streak, I think its my longest winning streak, that ended on Thursday of this week. During those six winning days I made just over $2,000.00 in profits. I was able to identify and take lots of winning trades, even though I did not always maximize those winners. I kept all my losing trades under $200.00 and was able to fix a few problems I was having with putting on too much size. I am also paying more attention to the indicators I use, which is helping me time my trades much better. When my timing is good it allows me to enter trades at low risk points which keeps my losses much smaller.

To cap off the recap I will post a few charts of the winners I had that I exited way to early.

After it took Yahoo! over a week to finally release my domain, I have the site back up and running. I ran into a few problems with BlueHost changing my database name and having a different DB_HOST setting, but after scouring a few forums I have everything back up and running. I lost a few comments on my previous post due to the fact that they were posted after I made my last backup. Other than that, it was a smooth transition. Hopefully, this will fix my speed issues and keep the site as accessible as possible. Enjoy!

-Ainkurn

As you may know, I stopped trading about two months ago to pursue a job as a Financial Adviser. As part of my pre-employment qualification process, I have to pass the Series 7, Series 66, and Life, Health, and Variable Annuity exams. Most of the last 6 weeks has been spent cramming my brain full of securities related garb in preparation for the 7. I have read two books totaling about 800 pages (one I basically read twice), handwritten about 150 pages of notes, highlighted about 100 pages of crap, and answered over 600 multiple choice questions. What does all of the work add up to; sitting for a 6hr 250 question exam.

Yesterday I studied from 7:00 AM till midnight and got up at 5:00 this morning to drive to Jackson, MS for my test. I was quite nervous because my practice exam results were pretty pathetic. My scores on the four practice test were 84, 75, 65, and 62. Not so great. My trip this morning was a bit edgy also, as I drove about 100 miles with one eye on the road and one eye on study materials. “Municipal bond interest is tax-free except when… WHO IS THIS FOOL PULLING OUT IN FRONT OF ME!” You get the picture.

Any way. The exam is a two part test of 130 questions each with a 1hr break for lunch. There are 10 “bonus” questions on the Series 7, which I find to be quite juvenile. It’s all computerized so you can easily mark questions for review and go back over them at the end. One other advantage (maybe disadvantage) is that you know your score immediately upon completion of the exam. I am accustomed to waiting a few days or weeks to get test results after 6 years of college (don’t laugh, I changed my major twice and switched colleges about 5 times). So I get through with the first half of the exam in about 1.5 hours, and I am feeling pretty confident. My hour lunch break was spent shoving down buffalo wings at Chili’s and contemplating ordering a Presidente Margarita to calm my nerves. I wonder if FINRA (NASD) has any rules about TWI (Testing While Intoxicated). The hour went by much too fast, leaving me only 5 minutes before signing back in for the final push toward certification.

When I got back, some bastard had taken my computer so I had to be re-deployed to another machine. Sorry about that Computer 9, I really wanted to finish what we started. Computer 15 is a loser! The room was cold, and the hum coming from the A/C unit did nothing to help my concentration. The second part of the test was more difficult. I came across several questions that totally confused me, and some that pertained to information that wasn’t in the two books I read. “Ennie-Meeny-Miny-Mo” came in real handy on a few occasions. As I got closer and closer to the last question, tension began to build to the point that I was reluctant to click the little “Exit” button signaling my completion of the exam. The worst part was waiting the 10-20 seconds it took to actually calculate my score. Boy did that ever seem like a lifetime! Did I mention if I fail the exam I have to wait another month before taking it again?

When my score was finally processed it was not what I was expecting. I was expecting to see my score prominently displayed on the screen in bold font and flashing colors. Not the case. When I finally found my score it was neatly tucked away in a small corner of a large report showing all the statistics from my exam. The first thing I see is “Pass”. A little relief. “Where is the damn score”? Ah, there it is “84%”. Nice! I skim over the report and see that the national pass percentage is currently 66% with the national average score coming in at 73%. I guess I am above average, or maybe I just studied 11% more than the average joe. Next up, Series 66. I will be back with the details on that one later.

-Ainkurn

Well last week turned out to be a profitable week but was a huge letdown. It seemed that I was on the verge of having one of my best weeks in a long time, that was until Thursday came along. I was up over $500 on Monday, lost $126 on Tuesday, was up $444 on Wednesday and had booked over $500 in gains on Thursday and was holding a $350 dollar winner but still lost money on the day. The problem was that I had bought the DDM around 9:00 that morning with 300 shares fully expecting the market to rally back above the January lows. I began to get concerned about the trade when I went back and looked at the chart of the Dow and a chart of the VIX ( courtesy of Stewie). When Oil made new highs and the market continued to fall I began trying to trade my way out the position. This did not work and I ended up losing $740 on that trade alone. I had planned to hold on to the shares for a few days as I believed we were oversold and the market would bounce. New lesson: Never try catching a falling Knife and Screw trying to pick market bottoms and tops. Anyway, the other profitable trade I was holding in the SKF got wiped out when Oil spiked up 3 dollars and the market instantly fell to new lows. So instead of make 800+ on Thursday I ended up with a $330 dollar loss. The disappointment and anger bleed over into Friday and I ended up losing $400. So all told I made right at $100 for the week. This is proof that just one or two mistakes can really screwup your trading week.

I intended to have a post up on Friday about how the week went but I just did not get it done. Last week was a good week for me. I was able to pull in about $800 in gains for the week. I stopped doing daily recaps and I’m behind on updating TradeLog, which keeps up with all my transactions, so I am not exactly sure how much I made but $800 is close to the correct amount. I had a few really good trades and only made a few mistakes. One of the things that I did really well last week was to be very carefull not to over trade. The only day that I did over trade was Monday and it made me sick. I had found the MA trade over the weekend and made good money on it on Monday but gave most of it back with a lot of small losers. My win percentace was very low and I decided I would not let that happen again. So I was very careful throughout the rest of the week to not take just any trade that I thought might work. I got back to using limit entrys( with did keep out of some winners) but it is very much my stlyle of trading, and allowed me to be more selective with my trades. I only had one down day which was on thursday, and I was able to recognize very quickly that it was not a good day for trading and I shut down early for the day. My only problem is not holding on to winners long enough to get the maximum return on the trade. But that is a problem I will accept in the short term and will just contine to work on my confidence and trade setups.