Friday, March 28, 2008

The Market Speculator's Trading Portfolio

Over the past month I have focused much of my free time on trading research. Currently my focus is on two research areas, breakouts and bear market turning points (I'm currently studying the markets during WWII and 1970s).

Unfortunately, this has taken some time away from this blog. I have done a good job of laying out trading ideas that have been on the mark for the most part, but something had to give, and it was my personal portfolio updates and trades. I like my trade updates to be the same day I make the trade and lately I haven't been able to do that. I thought about posting them a few days later, but that opens up doubt within my readership as to the validity of my trades, so I decided not to do that.

To remedy this, I am going to create a virtual trading portfolio. This will take the stress out of trying to update my trades as quickly as possible. Many of the trades I make in the portfolio will be trades I am making in my own account, some will not. Rather than just posting trades, I will focus on the strategy behind each trade. I also plan to track the portfolio with detailed portfolio results and periodic reviews. I will be a great learning tool for both you and me.

I started the porfolio today, taking short positions in gold and oil, and long positions in a few select stocks. I will update the portfolio this weeknd.


Tyro said...

I think this sounds like a great, entertaining idea! I'm used to taking trades as breakouts, and have been having some success trying to apply your pullback method along with sector-based analysis. You're a good teacher and I love reading about how you apply the general principles to take specific trades.

There will probably be haters or people that want to trade beside you which must be stressful. Hopefully this lets you take some of the stress of their criticisms.

I've been trying to swing trade seriously for three months, and the principles you use have helped me far more than giving out any specific trades. Thanks man.

The Market Speculator said...

Thanks for the kind words Tyro. I'm excited about the trading portfolio and hope it evolves into a valuable learning tool.

Have you been tracking your breakout vs pullback trading results?

Tyro said...

MS - I haven't done that yet, no. A good idea though... Hmm, yes, a very good idea. Okay, I have my project for this week and should get some good numbers ready.

I'd say that it was only at the end of Feb that it really struck me that when I was buying breakouts, that I'd end up getting shaken out or giving up a lot of unrealized gains. Buying on pullbacks seemed to offer a low risk entry and a smoother trade overall. The thing that I'm still trying to learn is how to time the entries. Breakouts offer a clear entry price which makes life simpler; pullbacks are more vague and contrarian. They're a thinking man's game, probably why I haven't taken to them yet :)