Saturday, July 14, 2007

Professional Trader?

My first two weeks as a supposedly professional trader (as I'm no longer earning a salary) are not going well. I've lost $3800 or 16% on my trading accounts. If that rate of loss is maintained this would be my worst month in the last year. The dollar loss is less than the worst due to having less capital allocated to trading at present. In my futures account the weekly losses are $1751 and $38 or 9.3% and 0.2%. I guess that trend is slightly encouraging. The model is having a bad month. It's up 1.85% when NDX is up 5.07%. That was the cause of this week's performance. Last week was pure stupidity in trading against the model and then not getting out of the trade fast enough. Stress due to the visa status and job-quitting issues has made it hard to focus. I need from now on to be focused, systematic, and disciplined in my approach or not try to trade.


pfstock said...

You lost money in a week like this? You must have been going short again. Like the wrong-way bettor at a craps table, it is difficult to solicit compassion when you lose.

Anyway, I wanted to ask if you have considered trading this ETF (symbol: QID). Though I have access to options and margin, I have been reluctant to use them. I am considering this as an alternative if I think the market will go down.

mOOm said...

The problem with those products - QID, QLD - is that they are fairly illiquid and so spreads are wide. My preference is to trade futures but I also trade QQQQ on margin and QQQQ options in other accounts. QLD could be useful as a longer term investment as the implicit margin rate is lower than you are going to get yourself.

Super Saver said...


Just curious as to why you deviate from the model when going against the model often yields losses. From what you have shared, following the model consistently would far exceed the benchmarks.

mOOm said...

It's just lack of discipline combined with other psychological issues. The big problem in the first week of July started with a small trade against the trend which I only intended to hold for an hour or two. But when it went against me, I hung onto it even though I knew the market would go the other way. I guess I was hoping the upside would be more limited. The model gives direction but no idea on the size of moves. I just need to be more disciplined and over time I am getting more disciplined and the bad trades result in smaller and less frequent losses. I'm probably a very bad trader which is why I need to follow a blackbox model.