Recap of Week 1

I lost track of some of the days so recapping everything I have done for this week. I think I will do more weekly updates as it is a better and more effective use of my time.

I am almost finished with Tim Sykes' PennyStocking DVD. I am not doing a full review, but commenting on the value I got out of it:

• I love the fact his strategy is based on trading on a short term base rather than long term. The strategy places little emphasis on fundamental analysis and more on technical analysis.
• The money I will be investing is pretty small. His strategy seems pretty optimal for what I am trying to start with.
• I have very little knowledge of technical analysis, the DVD was a good primer and introduction to it.
• His explanations of chart patterns was pretty interesting and educational. I like the fact he used several real life examples of where he was successful and not so succesful. Also him being transparent and pointing out where he made errors was insightful.
• The charts... he goes through several patterns and pounds certain things in your head. He makes the point patterns repeats themselves.
• Going year by year as an investor. There was a lot of value of him imparting what he has learned throughout the years. But this part was particularly interesting because he gives value by imparting knowledge only gained by experience.

The thing about the whole DVD to be quite up front is that it seems pretty easy. Yeah, I haven't begun trading yet but conceptually it seems like a pretty simple strategy. But reading Trend Following has made me correlate to a lot of what he is talking about regarding technical analysis and following patterns and trends.

Also read a lot more of Trend Following. This is something they never taught me in school (although I was an accounting major). I love the fact that they follow a lot of real people and utilize them as examples for learning instead of just being cut and dry like most books on finance.

During the week I started tracking TIM Alerts using my TD Ameritrade Strategy Desk. I followed what he was looking at and followed trades he did throughout the day. I just figured out there was an online access to the TIM Alerts where a lot of subscribers post their trades. I am going to start following their trades as well.

I hope to open a paper trading account to get a feel for trading and still slated to trade my own money late August/mid September.

Day 4

Stagnant with progress due to work. Here are forward movements:

• Reviewed the mark-to-market election my personal assistant researched for me. Will post a summation and thoughts later.
• Started researching a concept I learned through poker called Kelly's Criterion- trying to figure out the applications to trading.
• Reviewed more eLance proposals. While some of the bidders are giving me the hourly rates I am looking for (approx. $15/hour) they still want a high up front fee for setting up Quickbooks and all that other good stuff. With an accounting degree, I can't logistically see myself paying for these types of services for general bookeeping. The questions is if I want to invest the time in doing bookeeping or to defer it to someone else to free up time...

I was thinking about Trend Followers the other day and how relatively simple their ideas seem. I thought back to the 80/20 principle where 20% of the work produces 80% of the results. Still thinking about how to cross this over...

Day 3

I'm on a project deadline for work so I haven't been able to press forward much...

• Going through Trend Followers at a pretty good pace and should have it done by the weekend.
• Got the Penny Stocking DVD set and manual... plan to study this on the weekend as well.
• Briefly reviewed eLance proposals for an accountant- seems like $15/hour is the lowest I can get for a qualified person. Still reasonable and don't think it will be much to set up a Quickbooks file and start tracking start up expenses.

Day 2

I was supposed to have some time off this week, but seems as if I will need to be shifting back in to analyst mode for the time being. Updates and progress are as follows:

• Purchased "Trend Following" by Michael Covell (?). Picked this up after browsing through random investment book lists through Amazon. It's a pretty sizable read but looks promising.
• Received Penny Stocking DVD program. I was going to dedicate the tail end of this week to watching it and will now have to reorganize the schedule to fit it.
• Received a report from my personal assistant on the "mark to market" accounting election used by traders. Still haven't read it.

I'm also considering trying to train my body for 4-5 hours of sleep per night. I tried this once and it failed miserably and fucked up my sleeping pattern. We'll see how that one goes...

Day 1

I've been busy setting up my business and getting some educational products and books. The first thing I did was find a system that was niche with low competition but profits still can be made. This principle was inspired through Timothy Ferris' "The Four Hour Work Week" where he reccomended setting up self-automated businesses in a niche market with little competition. I am sure this principle can be found in different forms and mediums, but solid principles and truths have their way in manifesting and demonstrating themselves in different forms and different ways. I opted to go purchase the educational product of Tim Sykes, who gained a lot of his attention from "Wall Street Warriors" in addition to his breakout in Trader Monthly's 30 Under 30 a while ago. His system is based around shorting penny stocks- a niche market with not very much competition. I'm pretty interested learning through his product.

Next was setting up a business entity to do my trading. I had my personal assistant do some research for me on how I could operate as a trader while still having a full time career as an analyst for a private equity firm. He gave me some articles detailing the advantages of forming an LLC so I went that path. I used a local firm here to set up the LLC- I think I could have done this by myself as I have registered different LLCs in the past, but went with him anyways to ensure everything was done right. I have a gut feeling I could have done it a lot cheaper as well, but lesson learned. The filing took about one day to complete with the state and now I registered with Internal Revenue Service getting an Employee Identification Number.

I found out through some reading on forums that if an account is under $25K you are limited to 4 trades every 5 rolling business days or else you are flagged as a day trader. That sucks even though I am not engaged in trading yet. In online poker you can reduce your variance by playing multiple tables and exploiting your edge. While luck is still a factor, your edge should be able to counter any bad beats or variances. It's too early to tell if this principle carries over, but that is just the first thought that came to mind.

Finally, I posted an ad on www.elance.com trying to find a bookeeper who can help me with the start up, proper accounting methods, and how to expense the start up costs and future daily operations. I have 3 bids right now, but waiting to see if I can get a firm outside the US to take on my project. However, the more I think about it the more I may want to keep that aspect on the States side.

Coming Soon...

This blog is intended to track my journey as an independent trader- literally from Day 1. From making my first trade junior year of high school to a brief stint over the summer, I intend for this to be a learning tool for myself and others.