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Wednesday, September 3, 2008

After Many Trades? Battle Scars ...

Quotations of the Day:

"You cannot acquire experience by making experiments. You cannot create experience. You must undergo it." - Albert Camus

* * *

Challenge Accounts:

Investing Account Balance: $427.57
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.51

Personal Trading Thoughts: I * hate * gap ups as we had yesterday morning. I know the day traders probably love them; as they present wonderful opportunities to fade the open. But my god - what chop! I have my eyes peeled for shorting opportunities. We're looking at new Futures contracts, moving to the December contracts for futures such as ES and YM; possible shorting opportunities.

I'm also looking for a possible long in LHV8 - Lean Hogs, October contract.

Personal Investing Thoughts: My DRIP remains on for all of my stocks. 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 month. We'll see.

Recently, we have discussed getting started with Investing, rather than trading. Then we discussed your First Investment as to the mechanics. Then the First Investment, as to the emotions. Then we discussed the mechanics to your First Trade. Then we discussed the emotional discipline with your first trade. Now let's talk about what can happen to many traders, after quite a few trades. The emotional "Battle Scars" of the market ... (video included)

Tomorrow, we discuss the need for self-confidence ...

* * *

Challenge Project Account Balances and
Money Management Numbers:

Investing Account Balance: $427.57
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.51

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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