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Wednesday, August 27, 2008

Your First Investment Purchase: Emotional Discipline

Quotations of the Day:

"We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'" - Warren Buffett

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Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39

Personal Trading Thoughts: We're in the channel from Hades. We need a higher or high, or a lower low to confirm direction. As for myself today? I'm off to Cedar Point to ride some rides ...

Personal Investing Thoughts:
My DRIP remains on for all of my stocks. Now for a while, I've been saying: "I also have my eye on a few stocks for my long term investment portfolio.". I think I'm going to create a sidebar to the right here at my blog - with my "Long-Term Investing Stocks Watchlist". But for now? Well, as I've been saying: I have in mind that there are signs of weakness in the midst of this relief rally. In addition, September is a month of extreme seasonal weakness. Therefore, I will wait. Sometimes, the best thing you can do with investing, is know when to just wait.

Some time ago, I had a series on "How to Begin". Well, in that series, I discussed that it may be a good idea to get started with Investing, before you get involved with trading. Yesterday I discussed the mechanics that should go into your very first investment purchase. Today, we're going to discuss the emotions that will go into your first investment purchase ... (video included)

Tomorrow, we discuss discuss - the mechanics behind your very first trade ...

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Challenge Project Account Balances and
Money Management Numbers:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39

Total Trades: 6
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $56.63
Average Loss: $74.27
Accuracy Rate: 33%
Average Reward: $175.34
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Up + $53.84

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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