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Tuesday, July 29, 2008

Find Your Trading Edge, to Assist your Accuracy

Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $986.79
Online Savings Balance: $37.30

Personal Trading Thoughts: I'm eye'ing up a few Commodity Futures markets. I'd like Sugar #11 to rise this week, and out of the side of my eye, I'm watching Live Cattle. Right now, I'm waiting for setups, not entries. I'm not so sure about the Metals right now.

I'm also eye'ing Ford for a possibly short term swing trade. Maybe just two days. Have to wait and see.

In addition, I see the MER release, as incredibly good news. Finally, they are getting rid of all the CDO's, and taking the loss, rather than writing down the asset. Which means at this point? We won't see future writedowns on that garbage. The investment firms, are finally capitulating. Which is very ironic when you think about it.

Personal Investing Thoughts: Overall, I'm just watching and waiting. Summer is here, and the market is generally weaker in the summer, so I'm not a buyer. Many years, I turn my DRIP off in the summer, and receive straight cash. But not this summer. We've been in a bear market, and the market is offering bargain prices on many stocks. Therefore, my DRIP will remain on, so that I can accumulate more shares at better prices to DCA ...

One of the five or six principles (depending on how you count them) of money management? Is accuracy rate. What do you need in order to increase your accuracy rate?

You need to find your edge ...

Tomorrow we will discuss specific challenges to the low funded account. We will 'quantify' them.

* * *

Investing Account Balance: $243.12
Stock / Futures Trading Balance: $986.79
Online Savings Balance: $37.30

Total Trades: 5
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $62.40
Average Loss: $79.81
Accuracy Rate: 40%
Average Reward: $175.34
Risk : Reward Ratio: 1 : 2.2
Trading Money Gain / (Loss): Up + $111.50

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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