Archive for the ‘Financial’ Category
One trading strategy I wholeheartedly believe in is CANSLIM. I’m not going to go into details about the method, you can read about it at the link provided and all over the web. It’s a fundamentals based strategy that relies on great earnings and great companies. When I was researching CANSLIM months ago I stumbled onto Pitbull Investor. I used their free trial with demo trading and had decent results, somewhere around 5% in one month. I finally ordered the system a few weeks ago. It’s basicly a simplified version of CANSLIM with the addition of the cup and handle chart pattern. Every week their automated system publishes a list of stocks that fit their guidelines. The past few weeks have created very small lists and none of the companies jumped out at me. Then this weekend the new list was longer. I found two stocks that interested me, WIT and MEOH. Both are fundamentally great companies but WIT is in a cup and handle chart pattern. They were also scheduled to release earnings today. I used the rest of my cash account to buy WIT yesterday at $16.96. Today they beat the predicted EPS of $0.10 by $0.02, pushing the stock up over 4% to $17.84 as of right now. I’ll be holding this stock until it reaches the target of $20.62, it goes sideways, or I find a new stock that I feel has better potential.
It took a while but I’m finally back in the market. After selling my house I decided to put aside $5,000 to open a new brokerage account. While OptionsXpress has a LOT of great features their fees are a bit high. I’m keeping $1,000 with them as a backup account and for the tools they provide (free L1 streaming quotes, calculators, market scanners, etc). I put the $5,000 in a ChoiceTrade account. I haven’t decided if I’m going to stay with them yet but I’ve begun trading. Their website is bare bones and they don’t allow anything beyond basic options trades (no spreads, etc). Their fees are very low though, only $5 for stock trades (unlimited shares including penny stocks) and $0.75 per options contract ($6 minimum).
Friday resulted in my first investment loss with options. One leg of my condor went against me on a news announcement with almost no chance of recovery. I ended up losing a bit more than my gains from last month.
The important thing about losses is to learn from them. The lesson here is to make sure you know the whole story about a stock before investing. I was unaware of the pending news release. Had I known about the situation I wouldn’t have opened the condor. In the future I will be more careful before opening a position.
Today was quite busy so I haven’t had time to do much work on the site. I have the gallery online and integrated but the theme doesn’t work with the blog them at all. I have to find one that looks decent or figure out how to design my own.
There seems to be a bug with either the blog theme or WP that is causing a warning to come up. This is disrupting the first pageview and causing the title image to be shifted down into the tabs. It works fine on a reload. I looked at it very briefly and can disable the function if necessary but I’d rather fix it. It’s on my list of stuff to do.
As I may have mentioned before, I took on a lot of debt to start my investment career. I maxed out the majority of my credit cards doing balance transfers and the like. While this has worked out well for me I don’t recommend doing it. I estimate about half of the money I used was lost to poor investments or scams. The other half has been performing quite well and is slowly making up for the lost half. However, in the mean time I have a significant amount of debt and a low credit score. When I initially entered into debt my credit score dropped 100 points in a month and has gone down more since then.
Other than 2 finals I have this coming week, school is now out for the summer. That means I can concentrate on trading, investing, and speculating. May options expired on Friday and I took full advantage of it. I sold covered options on Wednesday and Thursday and managed to make over 11% return on my entire account after broker fees by the close of the markets on Friday! I can still count the number of trades I’ve done on one hand so overall I’ve been doing very well. I’ve only had one small losing transaction. Overall my account is up 16.25% after fees. Did I mention I’ve only been trading for 1 month? I still have one more open position. Assuming the market doesn’t go up more than ~7% in the next month (very unlikely) my total gains will be almost 19%.
I’ve been doing some thinking and some math. I’ve figured out that I can have $1 million in 5 years if I start with $25,000 and earn an average return of 6.35% per month (76.2% per year), compounded monthly. I believe this is achieveable since I’m already earning more than that. If I reach that goal I’ll be a millionare before I turn 30.
My investments are rapidly approaching $25,000 so I’ve almost met that goal. The problem is that I’ve been living off of my investments. If I continue withdrawing enough to pay the bills I won’t be saving enough to reach that goal. This leaves me with a few options.
I haven’t posted any trading updates in a while so here it goes. I’ve been trading a simple volatility strategy on a forex demo account with great success. The account is up close to 10% in about a week! The way the system works is that it takes small gains from low level randomized movement. Most losses are quite a bit larger (stoploss is 5-10x the take profit), but since wins are so frequent they offset losses and then some.
I’ve been rolling an idea for a website around in my head for over a week now. I started putting it on paper (well, a Word doc actually) tonight. Assuming I can work it the way I want I think it has HUGE earnings potential with very little maintenance.
Assets and liabilities are probably the most misunderstood, yet most commonly used terms used to evaluate what you own. When you truly evaluate both you may be surprised how much money you unnecessarily waste. Money that could be going into investments is tossed away into our consumer culture.
First, let’s look at the common defination of asset and liability. Assets are considered anything of value that you own and liabilities are the opposite, debt or obligations that cost you money. Many people have the mindset that assets are good things and liabilities are bad. While by defination this is true, once you step back and look at both you’re realize it’s not black and white. You can have bad assets and good liabilities.