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.

For those of you that are wondering what books and study guides I used for my Series 7 prep here ya go:
Pass the 7: A Training Guide for the FINRA Series 7 by: Robert Walker
This is a book that is very easy to read and has a lot of humor in it that will keep you interested. It covers a lot of material, but in my opinion it is not enough by itself. This book lacks a lot of the nitty gritty details and the practice tests aren’t all-encompassing. However, because it is easy to read I highly recommend this book as your first read. After you have completed this book move on the the more detailed and much more boring book below.
Passtrak Series 7: General Securities Representative License Exam Manual
This study guide is much more dry and to the point. I found it difficult to read this book, but it goes into great detail about some confusing principals. Additionally, there are some really good practice questions. However, I highly recommend that you purchase some additional practice exams or flash cards to supplement your study guides. I literally read this book completely through twice; once just skimming and highlighting and a second time more in detail and writing notes. I also completed several practice exams from my books and online. If you follow this well-rounded approach to preparing for the Series 7 then you should have no trouble passing.

-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.