Here is what the chart looked like after I exited at 84.35.

If I had not used such a tight stop I could have caught this move with full size and been done for the week. Oh well, the market was a little thin to start with and is still acting squirrelly, so I don’t want to risk too much capital.

In line with this trade, I noticed MA setting up a nice Inverse Holy Grail (IHG) on the 5min chart with two Doji consolidation bars. I thought seriously about shorting it with 500 shares, but erred on the side of caution. Would have been a sweet trade. So it is jut before lunch and I have made $325 on one trade, missed some big moves and I am done for the day. I should have kept my stops looser and not tightened my profit target. V was weak as the market was moving up to fill the gap but I didn’t read the signs correctly.

I got up at 5:00 this morning and scanned my watch-list and highlighted about 30 names to keep an eye on after the open. But my fist mistake came yesterday, by the way of not acting on my intuition. I emailed Stewie yesterday to ask him “Do you like GLD at these levels for a 1-2 week swing?” and he replied “tough call. stop at 110 if you choose to take it.”, which was exactly what I was thinking. I wanted to take the trade at $112.75, but I knew having a stop loss at $110 would mean an uncomfortable loss with 500 shares. I decided to hold off on the trade, even though I knew that if we sold off on the indexes that GLD could run. Well, I was right.

I didn’t realize that GLD had mad a run until Tradeitup and I got to chatting about some of his overnight holds. Missing this trade is made more bearable given the fact that I also averted disaster by not getting filled on 2,000 shares of MGM near yesterday’s close at $16.42. That trade would have been bad on the open.

On to today’s trades. One of the stocks on my scan list from this morning was CRM, which has been running like crazy since February. After a good breakout on Thursday, and two days of consolidation I was looking for a break of $90. I picked up 1,000 shares at $88.46 and had a stop in place at $87.40.

It wasn’t long before it became apparent that the gap-fill in SPY was a trap and the market took a dive.

After the sell off commenced, I tightened my stop on CRM to $87.65, which got me out before the first tall red bar at around 10:30.  Just before 11:00, immediately preceding the market sell off, I took a long in ESRX after looking at a daily chart on this one. It seems that as soon as I got long the bottom fell out and I had a $400 loser on my hands. Looking at the chart below you can see my entry on the white bar right at 11:00. What horrible timing!

My total loss today was $787 and change, which is less than 1% of my portfolio value, so I am not too troubled. I am now holding 1,000 of BCSI and 1,500 of SOA. Additionally, though most traders you ask would say to stay away from stocks that are reporting, I have 50 shares of FSLR as a interesting side bet. I am in at $128.96 with a stop at $123 in case they miss horribly. I am keeping my fingers crossed that we will get a pop on the open, but I am not going to loose any sleep over it.

I worked as an advisor for a year and four months, and although it was a struggle to keep up with paces the whole time, there were moments of triumph and excitement. I met a lot of great people and made a few friends for life. I learned a great deal about working with people and forcing yourself out of your comfort zone to get clients. When you are on the front lines in the middle of the kind of recession and market sell off that we saw, you get to observe the many ways people deal with stress and loss of capital and confidence in the system. Some people, both young and old, are calm and collected, while others will go to cash even in their 401(k) and wait until the market comes back to get back in. It is a fascinating study in human emotions.

As an advisor I didn’t have a lot of time to trade like I had hoped, and the commissions were so high that I had to hit a home run - which I had a few of - to even justify the transaction. My best trades were outlined in my post from August 2009, but let’s focus on the bad ones for now. My worst trade, and regrettably, one that I am still holding on to, was to buy VXX at $52. It is now trading just above $21.50, which is close to a 60% loss. Talk about a bad trade. Although I am down over $6,000 on this trade, and that pretty much wipes out half of my big winners, it’s not the money that bothers me. The fact that I have made the rookie mistake of holding onto my losers is quite frustrating. Despite this glaring faux pas, I am still confident that I can continue to be a successful part-time trader.

My strategy right now is to continue learning from Stewie by way of The Art of Trading subscription service and keep making cake on his calls. Stewie has done a great job in his first year of offering this trading service and he has helped me make a lot of money. You can see my review of The Art of Trading on investimonials.com.

You want to know recent results? On Monday I took Stewie’s alert on X, NETL and PEI. I exited the first two a few minutes before Stewie’s sell alert and I closed PEI right before the close instead of keeping it as an ONH. Since I am working from home most of the time, I can trade and work in tandem. Those three trades maybe took an hour out of my workday, we’ll call it my lunch break, and I came out with $878. And you thought lawyers made a lot of money per hour. Yesterday was not as successful due to stupidity on my part. I took on too much size on one trade that was my own idea. I got long 1,000 of COL at $62.73 after looking at the 30-min chart below and seeing the coiling action. I set my stop at $62.40, which was too tight, because I had too much size and couldn’t put it at $62 where it should have been. I got stopped on the sell off and ended up losing $330 on that one. I then redeemed myself by taking Stewie’s long on IVN. Again, I did not choose to swing this one and sold about 15 minutes before the close for $321 gain which nearly erased my COL mistake earlier. Lessons learned: don’t take too large of size when you can’t stand the loss at a reasonable stop level and stick with taking the alerts and stop thinking you are qualified to pick setups.

Career

I believe my last two posts were about my Series 7 and 66 exams. I did pass both exams as well as my state insurance license exam. I am now registered in seven states; AL, MS, TN, AK, TX, GA and TN and I am in the process of getting my FL license. I wanted to be able to blanke the entire southeast because I have contacts in all of those states. As with any career, there are aspects of it that I love and others that I hate. Over the past year, I have slowly learned so much about myself and the business, but there is much, much more to learn. As you might imagine it has been VERY hard to bring in new clients because of the state of the economy and the fact that people have been scared to death of any investments after the carnage that ensued last year and through the March low.

Over the past year I have worked very long hours and done quite a bit of traveling back and forth to MS and GA. Last week I put in over 70 hours in the office, and that doesn’t count some time spent at home doing research and analysis. The hours are starting to take a toll on me and I have started to back off some to try and maintain some amount of a work-life balance.

What I’ve found is that for the first two years you have to be a marketer first and an advisor second until you can grow your book of business. After you establish yourself and have a good source of recurring revenues, then you can dial back the marketing and increase your time in the office and time with clients. So far I have acquired 25 clients and have just under $2,000,000 in total assets under management. A pretty crappy year all around.

The last two months have been good and brought in more business than the preceding five months combined. I am very optimistic about my long-term prospects as a financial advisor, but getting clients and money in the door immediately has proven to be difficult. Enough about my career. If anyone has any specific questions about the life of a financial advisor, feel free to shoot me an email and I will be more than happy answer them.

Trading

From my farewell post back in May until about November I had quite trading cold turkey. As matter of fact, I wasn’t really even watching the market on a daily basis other than what I could force myself to listen to on CNBC. In November I finally got settled into the new city, apartment and work routine and I started to look at the market again. Since then I have been somewhat active with swing trading. I just signed up for Stewie’s daily Art of Trading service and have nothing but good things to say about it thus far (and expect nothing but good going forward). I see myself being much more active from here on out with Stewie’s recommendations, and swing trading my own ideas as well. I was talking to Tradeitup today about my recent success with trading and it has really brought back the rush of trading; something that I really miss. What has been working for you?; you might ask… well, below is my current holdings and a few trades that I have taken lately.

Current Holdings

I am also holding onto a Harrah’s Casino bond from 49 that matures in 2012. Speaking of bonds, take a look that this chart. This is a Ford Motor bond that I bought back in January and sold last week.

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That’s right, a 110% profit on a bond in six months. And, if you include the $475 coupon that I received in March, it’s more like 120%. That has to be my best trade ever. You can also see I made some money with USO. Not shown here is a $1,425 profit in FXI and a $2,550 profit in  UYM. I also have some other small winners and losers in my current holdings. All told, I have booked over $10,000 in profits since November; not bad.

Hopefully this will give HPT and others the update they needed, and maybe even spur me to continue posting occasionally going forward. It’s now midnight and I need to be at the office early tomorrow to get caught up before the weekend. HAPPY TRADING!!!

- Ainkurn

P.S. Tradeitup wanted me to give a brief update for him as well. He is still trading and doing well. He has had a good streak of consistent profits, but continued to be very conservative with profit targets and risk management. I’ll do my best to bully him into posting his trading ideas or recaps again.

Hope everyone is well,

-Ainkurn

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 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

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.