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.