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Wednesday, July 30, 2008

Quantified Challenges To the Low Funded Trader

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. Sugar #11 is rising, just as I had wanted. I'm still watching Live Cattle out of the corner of my eye. Right now, I'm waiting for setups, not entries. I'm not so sure about the Metals right now.

Personal Investing Thoughts: Overall, I'm just watching and waiting. Summer is here, and the stock market is generally weaker in the summer, so I'm not much of 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 ...

The best way to avoid problems? Is to understand what specific challenges you will face. "Know thy enemy" as the old expression goes. So how does this apply to the low funded account?

Tomorrow, I'll have the monthly Challenge Project Video for August 2008 ...

* * *

Investing Account Balance: $259.57
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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