Tuesday, January 31, 2012

Overall update

2011 was nearly disastrous: I was too early on some trades, did some risky things with options, CHURNED in and out. The second half of the year I just held on to a few key issues, even through losses, 2/3 are profitable now, the other one is much less painful. I have been sleeping well and am a lot calmer. I probably had some trading related depressive issues; these were healed with time, sane behaviour, and renewed hope for the future.

Work 401K stayed pretty consistent all year. I sat through ALL TIME HIGHS (a truly amazing figure) and the 20% fall, now back to peace. I've considered some movement but am overall well positioned in some broad spectrum stuff. The one change I made was cutting back on what is contributed. For a couple years it was the absolute maximum possible but I have come to realize that cash in the bank, not in a retirement account, is what is most needed to change my lifestyle for the better. I am a young man, further retirement associated funds are a long way off from being of use without penalty. So I am looking to significantly boost ready cash funds beyond the 3-6 months reserves.

Trading room office construction has begun. Electric rough in done, expect the air ducts to get done today. With some luck I will insulate and drywall this weekend. The plan is to keep this room bland in color and design to allow creative energies from within to flow. I do not want distractions.

Focus for future
I do not think I can be a good short term trader. I see some things on intraday charts on issues I follow, they absolutely could be profitable but only with low share size. Perhaps I will do some of this later. But my focus is absolutely more professional like, I am searching for the next big growth companies. I am kind of blending the best of what I have read and observed.

Trades are guided, though not bound, by position sizing risk management previously described here in a video, also on my youtube chanel.

Research focuses on smaller growth oriented companies, typically IPOs of the past several years. I review IPOs after they go public, search for business models I can understand, growth stories I can believe in, look into the management and perhaps even the competition. I like the idea of new technology and avoid pharmaceuticals. I do not follow group or industry behaviour, I fear missing out on a great time to buy for the future.

Principal trading ideas flow from these stocks, buying them almost without regard to chart pattern or what the market is doing. I suspect I could just as well trade around those I am most familiar with, selling the bursts and buying the panics. I also am keeping my eyes on behaviour of volatility, it seems to be tradeable for months long swing trades. I think it will take some time to come down to historical relative calmness, then I will look into buying in for some changes in climate. I suspect this will come late spring or early summer.

I think there is also money to be made with buying and selling bursts and panics in the overall market, see that it could be easy to make 20% or more a year doing this and am keeping an eye out on this.

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