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Thursday, August 28, 2008

Your First Trade: Mechanics

Quotations of the Day:

"It's only when the tide goes out that you discover who's been swimming naked." - 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: Just got back from the amusement park, Cedar Point late last night. Oh my god guys. I got through the Magnum XL, the Gemini, the Maverick (very, very fun ride), the Mean Streak, and right about then, my back started to spasm. Half way through the day? I could barely walk. But I did have fun. And while standing in line for the Maverick, I did pull some quotes from the cell phone. Seems we had a nice day. FRO shot up 2 bucks and change. Let's see if we can get some * * follow through * *

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.

But let's be clear. Seasonals only point to a tendency. Not an absolute rule. Last September, we rallied through the whole thing. We'll see.

Some time ago, I had a series on "How to Begin". We discussed getting started with Investing, rather than trading. Well today, we're going to talk about the mechanics of your first trade, as opposed to your first investment ... (video included)

Tomorrow, we discuss discuss - the emotion 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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