Monday, February 09, 2009

Trading Report: Preamble

I'm going to discuss the first few trades I've made, both paper and real, as an exercise in metacognition. Along with actually generating real income via trading now, I want to improve my abilities and generate more income in the future. Hopefully, this process will further my trading education and support that goal (for starters).

First of all, I am now clear that I seek to enter any trading day on which I actually trade (with real money) with a goal to net at least $1000 from my trading. Otherwise, not only is it uninteresting, but it really isn't worth my time to risk the capital. This may mean I don't enter into the market with as much frequency as I might otherwise, but it does 2 other things which I think are critical. First, it gives me a specific goal to keep in mind whenever I do enter the market. Second, it gives me more time to practice my evaluation skills and paper trading without feeling like I have to risk capital.

My first successful trade (and really my first trade ever) was 2000 shares of the PowerShares DB Crude Oil Double Long Exchange Traded Note (ETN) -- known as DXO -- which I bought a few days before the end of 2008 and sold about 2 weeks later, for a pre-tax net of about $960. Not bad for a first trade, especially one that was completely unplanned. I wanted to start accumulating DXO and figured that my entry at $2.20 per share was fairly good. (The day that purchase occurred, I had a limit order at $2.10 which was totally missed because DXO gapped up about $0.13 at the open.)

Since that first trade, I've made a few smaller trades, mostly buying DXO at prices ranging from about $2.40 to $2.82, and even a short sale on IYR (if I recall correctly) which netted approximately $60. Currently, I've fairly inactive, just holding back and observing. I've a few theses which I'm tracking and just getting comfortable with trading. I welcome any ideas, suggestions, or tips (such as brokers and tools, as I am looking to change to a new broker with better tools - primarily real time charts - soon).

You can follow my trades (and other musings) by following me via Twitter, as that's where they tend to get announced first.

Until next time...

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