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Saturday, May 31, 2008

Week in Review for May 31, 2008

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: End of the week. Next week I might look for the short side..

Personal Investing Thoughts: Market hasn't done a whole lot. Remember. "Sell in May and Go Away". We've had a rally in the market, and we are now approaching seasonal weakness. Especially starting mid-June. Not comfortable buying right now for long term.


So we arrive at the end of another week. I review the stock market, one of my personal investing DRIP buy and hold accounts, as well as progress with the Challenge Account ...



On Monday, I'll post regarding the Challenge Project, and then post on Tuesday regarding my thoughts regarding June ...

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Friday, May 30, 2008

Futures Series - The Players; "Small Speculators"

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: Might day trade a bit today. BAC, TSM, and some others on day trades. Just have to watch the open.

Personal Investing Thoughts: Yesterday was sideways. My own personal portfolio is taking a bit of a breather. But since I'm a DRIP / Dividend investor, this is actually great news. This means I'll DRIP / DCA my positions at better prices with dividend season approaching. Speaking of, I collected my GMR DRIP's today. Thankfully, we've had a pullback on GMR over the last few days, and I DRIP'd in at a better price.


Yesterday we discussed the very nature of commodity future markets, and how they differ from other markets in that they are zero sum. Now let's start to talk about the three groups that are part of the Futures markets . . .



Next, we'll talk about the Large Funds. Well, after we have our "Week in Review" as well as our "Challenge Project Review" videos for June . . .

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Thursday, May 29, 2008

Futures Series - Zero Sum

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: I have a ton of personal errands I have to run today, so not much in the way of trading. I'm going to see if I can get back by 12:30 pm, and who knows, may pull out a day trade or two.

Personal Investing Thoughts: Yesterday was sideways. My own personal portfolio is taking a bit of a breather. But since I'm a DRIP / Dividend investor, this is actually great news. This means I'll DRIP / DCA my positions at better prices with dividend season approaching.


Yesterday we discussed the very nature of commodity future markets, and how they differ from other markets. Let's continue that discussion today, with the mechanics of the futures markets. Let's talk about zero zum.



Next, I'll begin on the "Players" in the Futures markets.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Wednesday, May 28, 2008

Futures Series - Nature of the Commodity Futures Markets

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: Nothing on the horizon today. Could change at a moments notice. At the moment, I'm trying to get my house shaped up because we're having new windows installed. I'm not kidding guys, the windows we have in this house are over 80 years old. All warped where the glass has set. So we're finally getting new windows put in, but this means that I have to move everything away from the windows so that the guys who install the new ones have room to work. Seems like we're never done around here. After that, the dining room gets painted, and after that, we begin on the entertainment room (my old office)

Personal Investing Thoughts: Yesterday was sideways. My own personal portfolio is taking a bit of a breather. But since I'm a DRIP / Dividend investor, this is actually great news. This means I'll DRIP / DCA my positions at better prices.


Let's discuss the very nature of commodity future markets, and how they differ from other markets.



Tomorrow, I'll finish up with a couple of other aspects regarding the futures markets themselves. After that, is when I'll begin on the "Players" in the Futures markets.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Tuesday, May 27, 2008

Futures Series - Lock Limit

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: Personal trading? Scanning the market for some good trades. Some of the financials, like MS and BAC looks like it might swing up, but would need market confirmation to see that eventuality, and the stop would have to be really tight on at least a few hundred shares (making sure that the monetary amount risked is no more than 3% of your account). Especially as dividend season approacheth. :). Problem there, is that the end of May is approaching, and the "end of May" mantra is weighing heavily on many investors mind. The Challenge Project accounts are on hold for the moment.

Personal Investing Thoughts: I'm expecting the market to continue to fall. Not looking to establish new positions just yet. Just observing the markets. And actually, it's beneficial for my investment portfolio's, if we have some pullback now. Dividend season is approaching. This means that when my DRIP's go into effect, I'll grab more shares, for free, at better prices.


Ok, here's another aspect that is pretty individual to the Futures markets. It's the concept and mechanism of lock-limit.



Now I should clarify something here. I mention in that video that I have only been involved in a lock-limit trade once in my 12 years of trading. Thankfully, that lock-limit went in my favor. However, in various markets, I have observed lock-limit occur on a regular basis. I wasn't in those markets, trading them, when the lock-limit occurred however. I look for nice, steady markets. Markets that are 'waving' nicely.

And there's the other advantage in trading futures options. You are pretty much protected from lock-limit days if it goes against you, because your risk is already locked in.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Monday, May 26, 2008

Futures Series - Leverage Illustrated ...

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: The markets are closed today. But as far as the Challenge Accounts: Nothing on the horizon. Personal trading? I'm just going to relax today, and haven't got my eye on anything in particular. That could change, of course, by tomorrow morning.

Personal Investing Thoughts: Markets closed today. But I'm expecting the market to continue to fall. Not looking to establish new positions just yet. Just observing the markets. And actually, it's beneficial for my investment portfolio's, if we have some pullback now. Dividend season is approaching. This means that when my DRIP's go into effect, I'll grab more shares, for free, at better prices.


Sometimes, ones have a hard time understanding the actualities of leverage. So I thought it might be good to illustrate what leverage is.



Tomorrow we discuss lock-limit.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Saturday, May 24, 2008

Week in Review for May 24, 2008

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15

Personal Trading Thoughts: Nothing on the radar at the moment.

Personal Investing Thoughts: Pretty wild day for BUD stock on Friday. But that just reinforces what I've always said about BUD. You don't have to worry about it going out of business, or suspending the dividend. It's an old faithful. It'll go down to the $40's. Then some news will bring it back up to the $55.00 region. It's extremely reliable


I outline the steps we're going to take with the blog / vlog. I also give you a heads up for where the Challenge Project is heading for June ...



There's no trading on Monday, but I'll be back with another Futures video. How's that? I'll even work for ya on a Holiday . . . ;)

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Friday, May 23, 2008

Futures Series - Leverage

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $735.61 (Deposit processing.)
Online Savings Balance: $27.15

Personal Trading Thoughts: Well, I accept the loss from the LHM8 68 Put trade, a loss of $74.31. Was a good try, and wouldn't have been so bad, had it not been for the unbelievable shinanigans of the open outcry pit guys (See yesterdays entry. They literally tried to steal the option from me). We were ahead by $14.00 in the trading accounts. Now we're back down to a loss thus far of $59.68. But not too bad considering we've had 3 losing trades. See what I mean guys about the importance of money management? Regardless, on the trading front for the Challenge project? We have good news. I've moved my main accounts away, and the only thing I have at optionsXpress now, is a small MS position in one sub-account, as well as my Challenge Project. So I'm going to link up that account to Covestor, to track the challenge project. I'll have a link, as soon as Covestor gets back with me.

Personal Investing Thoughts: Pretty mixed day yesterday. Listened to the shareholder presentation web-conferences. Not too bad. Business looks great, especially for FRO, which has returned me 49% on my money thus far. HOLY CRAP - LOOK AT BUD GO!


We've been discussing commodity futures. We learned what a commodity is. We learned that commodities are traded in contracts, and those contracts have specific sizes; and that such contracts expire in certain months. Today we'll discuss another aspect of commodity futures. That has to do with the leverage that's possible in futures. Leverage can be great, but it can also prove disasterous . . .



* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $735.61 (Deposit processing.)
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

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.

Thursday, May 22, 2008

Trader Thoughts - Trade Management and Lean Hog Trade

Hmm.

Here's a video that discusses how to put trade management together with a real trade:



Edit: Lean Hogs just popped up, so I'm putting in an order to sell off the option at .150 Limit ($60), which is where the ask is sitting at. But of course, the criminals in the pits ripped me off. Sat there for 1/2 hour, and nothing. No fill. So I lowered it again. Still no fill. So I say - screw it. Go ahead and rip me off, I'll put in a market order.

These bastards return me a fill of . . . . . $0.00 That's right. $0.00.

So naturally, I call up my broker and calmly explain that there is no way in hell I'm letting them outright STEAL my option from me. What do the pit guys return me with?

A fill of .005, or $20.00. Bunch of freaking thieves. The whole thing is eventually going electronic. And don't ask me to cry, when thieves are put out of work.

Monday, May 19, 2008

DTE Energy Company (DTE) Investment Purchase

Challenge Accounts:

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $720.00 (In a trade, this floats)
Online Savings Balance: $27.15

Personal Trading Thoughts: For the Challenge Project I currently have a 68 Put on June Lean Hogs, at .200 or $80.00. Looking for the usual seasonal weakness we get in Lean Hogs; which the 5 year average, the 15 year average, and the 30 year average all demonstrate. My profit stop is in at .475 limit, or $190.00 before commissions.

Personal Investing Thoughts: Market is struggling to make another high. Just can't seem to get it done. Until that happens? I'm not overly optimistic about higher highs. Just watching and waiting. My DTE stock has performed well in last month or so. I'll talk about that today.


I received a bit of personal news on the trading and investing front that made my day on Friday. I talk of that, and other matters in the following video ...



Holy crud guys. Look at FRO go!

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $720.00 (In a trade, this floats)
Online Savings Balance: $27.15


Total Trades: 4 (3 completed, in the 4th)
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Saturday, May 17, 2008

Week in Review for May 17, 2008

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $720.00 (In a trade, this floats)
Online Savings Balance: $27.15

Personal Trading Thoughts: Friday, I got long into a June 08' Lean Hogs 68 Put Option. It broke below the 50 period EMA on the 30 minute chart, and just continued to sink. Just right when I started, I put the order in to buy it at .275 limit ($110). I received my fill at .200, or $80.00. All the better. Then, we received the weeks COT report. Not a whole lot there to go on. So looking to the seasonal weakness. Which is usually pronounced come May 19th to the 27th.

Personal Investing Thoughts: I've been saying this all week. The market is struggling to make another high. Just can't seem to get it done. Although a intermediate bottom is in, I think the market looks a little 'toppy' at this point. Time will tell.


So we arrive at the end of another week. Biggest news with this Challenge Project is the Lean Hog trade. I encapsulate my thoughts in the video below . . .



I discussed a video about having a trading plan. That video can be found here.

I also discuss the strategy for the Challenge Project. That video can be found here.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $720.00 (In a trade, this floats)
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Friday, May 16, 2008

The Stock Market is Poised? Frontline Ltd (FRO), and June 2008 Lean Hogs (LHM8)

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: Look at June 08' Lean Hogs, 10 day chart with the 30 minute bars. The 50 period EMA is providing nice support. I just watched the first 20 minutes of the open. Support is still holding around $76.92 on a very quiet open. Wait and see. It breaks down to $76.90, and I'm a buyer of that June 98 Put Option . . .

Personal Investing Thoughts: Market is struggling to make another high. Just can't seem to get it done. Until that happens? I'm not overly optimistic about higher highs. Just watching and waiting. My DTE stock has performed well in last month or so.


A video summary of my thoughts on each is found below:



Edit: Filled. As soon as June 08 Lean Hogs started breaking down, I put in an order to buy one June 68 Put at .250 Limit on a Day Order. I was filled at .200, or $80.00. My profit objective for the option is .450, or $180.00.

Edit: Just put in a GTC (Good until canceled) order to sell my June 08 Lean Hogs at .475 Limit ($190)

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Thursday, May 15, 2008

This Blog is . . . . as well as more regarding 2008 Lean Hogs (LHM8)

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: Look at June 08' Lean Hogs, 10 day chart with the 30 minute. Seems that the 50 period EMA is providing nice support. That gets violated? I might look to buy a put option in Lean Hogs.

Personal Investing Thoughts: Market is struggling to make another high. Just can't seem to get it done. Until that happens? I'm not overly optomistic about higher highs. Just watching and waiting.


So. Here's your chance. Do you like things the way they are? Would you like to see an improvement?



The series on Futures is coming up.

Edit: Since this video was made, I've since improved the audio, and also the video feed.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Wednesday, May 14, 2008

Trading and Investing Thoughts for May 14, 2008

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading as well as Investing Thoughts: I discuss those today in the "Trader Thoughts" video, for May 14, 2008


Still haven't given up on Hogs, and looking for an entry signal. I'll be watching the open tomorrow closely.



* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Tuesday, May 13, 2008

Lean Hog Trade? Or Not . . .

So what about that Lean Hog Put Option trade?



I still have my eye on this one, and have my eyes on a few other trades that might be coming up . . .

Charting 101 - I Forgot this Bit Regarding Indicators . . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: As far as the broad overall stock market, I'm still not a buyer at these levels.

In the Futures arena for the Challenge Project, I had a failed attempt at a Lean Hog trade yesterday. Tried to get into Lean Hog June 68 Put yesterday at .275, and it was just a no-go. Market didn't bite. Because the option was a bit "out of the money" because that's what the Challenge Account could afford. As I mentioned yesterday, the Challenge Accounts can't afford a whole lot. I am 'possibly' looking at attempting to get in again today. It all depends on how the open turns out at 10:05 a.m. It also depends on if I can accurately guess where the options pit will open up at. I might be able to get this option for a bit cheaper than I was looking to purchase it for yesterday.

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. Again, I won't turn my DRIP off this summer to receive straight cash, as many stocks are still 'on sale'. I want the DRIP to benefit from this correction we've had.


Oops. Between computers melting down, and two weeks in Mexico, somehow this video slipped away from me. It was meant to conclude the Charting 101 series . . .



* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Monday, May 12, 2008

Question: Order Types (VIDEO) . . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: On the bearish side for the short term as far as the Stock market. But not willing to commit at this point. I'm waiting for just a bit more confirmation that this run in the stock market.

In the Futures arena for the Challenge Project, I am 'possibly' looking at a put option in June Lean Hogs. It all depends on how the open turns out at 10:05 a.m. Chicago time, and the action shortly thereafter. It also depends on how the price for the options are looking. The Challenge Accounts cant afford a whole lot . . .

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. Again, I won't turn my DRIP off this summer to receive straight cash, as many stocks are still 'on sale'. I want the DRIP to benefit from this correction we've had.


I received a question Friday from a viewer I've had for a while now, wawbwc. It reads thus:

"Dan, Can you explain the various order methods? (Limit, Stop, Stop Limit, and Trail Stop). I have read the explanations and I am not comfortable using them. I usually go with Stop Market or Limit orders. What is the difference between Limit & Stop orders? What are Stop Limit orders? How do you set up a Trail Stop? I always hear about using Stop orders to protect your profits. How do you do this? Does a Stop order work like a Trail Stop order? I thought you would be a good person for answering these questions. I enjoy how you explain things to your audience. These different order methods seem a bit excessive. I don't want to make a mistake by trying to use these tools inappropriately. Welcome Home."

First of all, thanks for the welcome home, and the extremely kind comments. I very much appreciate them. I try to explain the different order types in the following video:

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)




Edit: For the Challenge Project I put out an order to buy one June 68 Put Lean Hogs at .275 ($110.00) Limit Day Order at 11:14 AM

Now it's hard to track what's going on, because this is an open-outcry pit. But what this means, is if the market gets to .275 on the June 68 Puts - then I * could * be filled. But this means that I will NOT be paying more than .275 ($110.00) for my option; which is vital for the Challenge Projects. Its a Day Order, which means at the close today? The order will expire.

Edit: Which it did. Expired today, without being filled.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Saturday, May 10, 2008

Week in Review for May 10th, 2008

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: I still haven't completely caught up to date on the investing and trading game, but I'm getting there . . .

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. Again, I won't turn my DRIP off this summer to receive straight cash, as many stocks are still 'on sale'. I want the DRIP to benefit from this correction we've had.


The week in review for the week ending May 10th, 2008.



Two things. What I see in the overall stock market right now? Topping action.

Second thing? I think I've officially become a YouTube whore. I've created another YouTube channel.



* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Friday, May 9, 2008

Answering Some Questions . . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: I still haven't completely caught up to date on the investing and trading game, but I'm getting there . . .

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. Again, I won't turn my DRIP off this summer to receive straight cash, as many stocks are still 'on sale'. I want the DRIP to benefit from this correction we've had.


I'm going to start answering some of the questions that have been thrown my way while I was on vacation. I wanted to answer these questions adequately, so this video is a bit longer. Thus, no pretty introduction and conclusion. Sorry.



For Daniel's question, I also suggest going through my YouTube video series that deals with the question of how to begin. The first video in that series starts here.

We will return to our regularly scheduled broadcast tomorrow on the same bat channel, same bat time.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Thursday, May 8, 2008

Almost . . . almost ready to go again . . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: I still haven't completely caught up to date on the investing and trading game, but I'm getting there . . .

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. Again, I won't turn my DRIP off this summer to receive straight cash, as many stocks are still 'on sale'. I want the DRIP to benefit from this correction we've had.


I'm almost ready to go again. I nearly have everything on the new computer together. I'm still restoring many data files to the new setup, as I had to reinstall Windows again. I was up to 2:00 am with this thing last night.



I'll probably be in Ventrilo tomorrow . . .

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Monday, May 5, 2008

Post-Vacation Review . . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: Unfortunately, my computer blew up just before I left. The CPU overheated and not only melted the chip, but also welded the powersupply bundle to the motherboard. I have a replacement CPU, but this computer only stays on for about 20 minutes at a time. I have a replacement motherboard and gear ordered, but it won't arrive until Tuesday and Wednesday. So I can't trade, with an unreliable PC.

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. I have my eye on DTE for possibly more accumulation until then. But come June? I'm out of investing in the markets, based on seasonal tendencies.

I should mention however, that this year? Unlike most years? I will not be turning off my DRIP's during the summer months. Usually, I turn off my DRIP's when the market peaks, and I let myself enjoy straight cash dividends from the stocks I own. The market usually peaks in June. So I 'usually' turn off my DRIP so I don't accumulate more shares at higher prices, and this keeps my cost-basis low across the board. But the market has undergone a correction lately, and I want to leave my DRIP on this year, and accumulate more shares at cheaper prices. Although it's wise to have a set strategy? You have to be able to adapt to current conditions. And right now? For long term portfolios? The market is offering many good stocks for great prices. So I'll let the DRIP's do their thing this summer, and forgo receiving cash.


I've had a little more time to sit and go over some news, and digest some things.

First of all, my investment portfolio's (Non-Challenge Project Accounts) have had a fantastic run here. Here are some highlights.

Covestor Results: Covestor tracks just one of my investment portfolios. They can only do one account at a time unfortunately. And it's only been tracking that account since November. Through what has been a very poor time in the markets for buy and hold investment portfolios such as this one. However, I've managed to beat not only every mutual fund (including the bond funds lately) that Covestor tracks, but the market indexes around the world as well. In addition, although I have bought and held in my portfolio, I'm now in the positive, and past risk free.

At least for today. That's the trick with buy and holds. You don't take your profits. You look to the balance between the asset valuation and the dividend DRIP accumulations for gains from the market multiples. Tomorrow is always a new day.

Ford (F) has risen from the low $5.00's in mid March, to nearly $8.50 recently. I'm holding Ford from the $6.50's and $6.85 region. Ford is one of those stocks I own on a fluke. They cut out paying dividends, and probably won't be paying dividends for some time. However, I hold to some tenants of accumulation theory, and this doesn't mean I have to sell my Ford stock. I just hold onto it. I don't think Ford is 'going anywhere' in that it isn't going away anytime soon, and I am very comfortable with my cost-basis. So I just hold onto it. Since it represents less than 3% of my investment portfolio (according to money management principles); this is sort of a 'gimme' stock.

Frontline Ltd. (FRO). Any excuse to talk about the good things from FRO. As long time readers know, I love this stock. It's treated me so well over the years. A stock like FRO doesn't appear often. Absolutely huge divvy's, and special dividends that the company can sustain for the medium term. But when they come along? And if you're fortunate enough not to be wrong about the management team? They're a thing of beauty. FRO was a stock that I bought, that I consider 1/2 skill, half pure luck. I sometimes call it my 'most speculative investment play'. But it's a play that's paid off in spades. But investing isn't just about the dividends. It's also about the stock price. I can easily see FRO hitting $62.00 +. Of course, this means that my DRIP purchases won't accumulate as many shares. That's the downside of DRIP. Well . . . I guess it's a downside. Because the value of the paper has risen so dramatically, although I won't gain as many shares on the next DRIP? The value of the asset itself more than makes up for this negative.

Anheuser-Busch Companies, Inc. (BUD) Now this is a stock I love to mention. Why? It perfectly illustrates my investment style. I bought BUD around $53, and then more at $48. And the entire time I put my money where my mouth was, and announced my purchases into BUD? I had naysayers. One guy was so foolish as to try to predict tops and bottoms (something investors do not do) and stated that BUD would "soon see $37" region. I'll tell you what, on an income stock like BUD? If it hits $37.00 I'm going to be backing up the dump-truck to buy as much as humanly possible. But then again, in my own personal opinion - he was an absolute nutcase, and believes that all stock market prices are manipulated by guys with nintendo like joysticks (I kid you not. This business attracts all kinds). On top of everything else, we'll soon have another dividend paid out, that will only accumulate more shares (basically for free), of this fantastic stock, as I did in February, which also helped lower my cost basis.

DTE Energy (DTE) Wow. This is what I like to see. I made my first small introductory buy with DTE in all my investment portfolios. And it just almost immediately rewards this purchase by taking off, and we then receive the news that first quarter profit surpases estimates, as I thought it would. On the chart, we know have some wonderful consolidation, and a dividend will be paid out in the next month or so; which will accumulate yet more shares. I'm seriously thinking of buying more if this consolidation continues, and we approach the $43.00 region. But we'll have to see how the future shapes up.

That's just a few of the stocks that have done well. SFL shows serious strength as well. The worst performing stocks I have, are still consolidating well, which will help out come dividend payout time with the DRIPs.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Saturday, May 3, 2008

Computer Facelift and Redecorting. . .

Challenge Accounts:

Investing Account Balance:
$247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Ok. As I mentioned yesterday, the computer I'm using right now is just toast. It stays on for about 30 minutes at a time. Overall, I'm pleased with the performance that this computer has given me. Eight years of great service out of this computer. But it's day is done. That's sort of how my grandfather, or my 'Papaw' Fraley taught us all to treat our possessions. By the best at the time, and then maintain it well. Get as many good years out of your possessions as possible. Then buy the best again, and repeat.

This poor thing has been through the ringer however. Somehow, someway, I discovered that the grease wasn't fully covering the chip on the processor. This caused a heat problem. It got so hot (I kid you not, I'll show you guys the video when I have the new computer up and running), that the power supply bundle? The part that connects to the motherboard? It literally welded itself into the sockets. That it didn't start a fire is unbelievable.

Regardless, the computer parts are ordered, and should be arriving the first half of next week. I ordered myself a nice, but simple motherboard, and will be building it inside of a old modded server tower that I had. My wife needs a new laptop next month, and I'll also be buying one for myself. Probably by the end of this year, I'll be buying myself a Dell XPS system, and that will become my main work computer. What I'll do after that, is take the computer I'm now building? And use it for a Linux Gentu setup, and see about building a new home network with a Linux operating as my main server. Who knows.

Frequent readers of this blog and my video blog know that I've been talking about changing my setup around here for a long time. I sat down and figured that I should do everything in one fell swoop. My office is where I usually record my videos. I'm going to turn this area into a den / video game area. I'll put all of my game systems I have, and buy some new ones as well (Wii, Xbox 360) in here, with a plasma screen T.V. Some lounge chairs, and redo the entire decor. I'll move my computer out to a dining room 'nook' we have, and recording most of my videos from out there. I also went ahead and finally ordered myself a flat screen 19" monitor, and I am finally migrating away from the old CRT monitor. So the next time you see me on video, you'll notice different surroundings.

Oh, something I didn't mention yesterday about the Challenge Project deposits? The $90.00 will be deposited to optionsXpress on the 8th of this month. The other two deposits to the ING account and the Sharebuilder account have already been processed.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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.

Friday, May 2, 2008

The Low Funded Challenge Accounts: May 2008

Challenge Accounts:

Investing Account Balance:
$242.27 (Interest Payment)
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $22.15 (Interest Payment)


Guys. The computer is toast. It can stay on for 20 minutes at a time, but well, it's toast. I'll be ordering a new one today. Regardless, here is the monthly update and plan for the Challenge Project for May, 2008. I have to keep this brief, because I have no idea how long this computer will stay on. I'll give you all it's gory details of the literal 'meltdown' when I get the new computer.

These sub-accounts were created by me back in October 2007 as a main feature of this blog. Their purpose, as well as the purpose of many of the articles in this blog, is to assist the low-funded trader understand what principles he needs to consider when trying to get started in the markets, or if starting up again because his account has been wiped out. That as long as one enters this business with the proper principles, strategy, education and emotional discipline in hand, you can 'make it' in this business. These are actual sub-accounts at my brokerages that I own, and I will look to for growth. I will announce actual trades and investments that I perform in them, and the money management rationals and reasons for my decisions as a means to educate others.

In the beginning of this experiment, I placed $130.00 with Sharebuilder as a long-term investment account, and I placed $370.00 in the account for trading Futures options. I thus termed this the "$500 Challenge". Since we now have $898.38 as a cumulative total in these accounts, not $500, I will term this the "Low-Funded Challenge" instead of the "$500 Challenge". At times I will refer to them simply as the "Challenge" accounts. I later added a small ING Savings account beginning with only $2.06.

I also had three rules for the "Challenge" accounts. At the beginning of each month, I review and consider where we stand, and how those three rules impact the current months decisions. So let's do that for February.

Rules for the Challenge Account:

1) The initial investment is $500.00, to be split amongst the accounts. We did that back in October of 2007. $130 went to Sharebuilder for longer term investments, and $370 went to the Xpresstrade brokerage for futures options purchases. Xpresstrade was later bought out by "optionsXpress", therefore this is now the optionsXpress account. This account is the 'trading' account, for stocks, etf's, and futures options.

2) Each month, I can contribute $100.00, that can be split amongst the accounts however I choose. In other words, I can send $30.00 to Sharebuilder, $70.00 to optionsXpress; or $100.00 to optionsXpress, and nothing to Sharebuilder, etc. So what's the plan this month? This month, $5.00 will go to the Investing Account, $90.00 will go to the optionsXpress trading account balance, and $5.00 will go to the ING Savings Account Balance. I would take more time explaining, but this current computer rig only lasts about 20 minutes before everything powers down.

3) I'll be using regular investment and trade vehicles. Bonds. Stocks. ETF's. Futures Options. In May, I have to get my new computer ordered and setup. I'll keep my daily blogs updated, and will be back in force when that happens. But at the moment? I have to keep my entries brief, and this also means I can't use the computer for trading until I have a reliable stable computer. I'm currently looking at the Dell XPS systems? My brother has one and it's a thing of beauty.

Mays Balances after contribution (before trades)

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $824.39
Online Savings Balance: $27.15

* * *

Investing Account Balance: $242.27 (Interest Payment)
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $22.15 (Interest Payment)


Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

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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