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Tuesday, August 5, 2008

Challenge Project Purchase: Buying Ford Motor (F) at $5.02. Watch the Thought Process ...

Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $1,004.24 (Within a Trade)
Online Savings Balance: $47.39

Personal Trading Thoughts: Updated my Twitter with my thoughts regarding Ford, and my entry. Market has a few seasonal up-days about this time.

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 ...

During this last rally? I was watching the 10 minute chart of Ford. I saw an increase in volume with Ford. There was then a failed top pattern on that 10 minute chart, so I bought at $5.02 as I saw the broad market was rallying.

I made a video, that sort of shows you my decisions and thinking from 2:45 pm EST, until I was actually in the trade, a little before 3:30 pm (Twitter has some of the specifics) ...

I'll watch the after-market and pre-market carefully, and keep my stop tight. As far as I can possibly let it go as to the loss? Is the $4.60 region. I might keep it as tight as $4.80, not sure. Unlike my personal accounts? I'll have to let the Challenge Project trade go longer? Because I only have 185 shares. But it means I'll probably take my profits quicker. It just depends on how the trade shapes up.

With a stock trade? I can keep a little more to money management as far as a 3% loss, or a 6% gain.

Seasonally, the market has a short 'up-move' from August 5th, to about August 15th.

* * *

Investing Account Balance: $334.20
Stock / Futures Trading Balance: $1,004.24 (Within a trade)
Online Savings Balance: $47.39

Total Trades: 5 (Within the 6th, but the statistics only cover 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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