About This Blog
Thanks for visiting mytradersjournal.com. When I visit a site for the first time one of the first moves I make is to glance at the “About” section to see why the writer thinks I should be there and what’s in it for me. I think you should be here reading my blog if you are interested in investing stocks and/or options. Hopefully everyone from beginners to advanced traders will find some value in what I write. If you have a question and don’t want to post a comment, you can email me – alex[AT]mytradersjournal[DOT]com
Beginners can learn through watching what trades I make and the thought process behind each move. Beginners must act like sponges and take in as much information from as many various sources as possible. I try to write in layman’s terms as much as possible without being too wordy, but if something stumps you please refer to my Glossary section or email me if you don’t find what you need.
Experienced stock traders can benefit by learning why starting a position through selling puts is almost always more profitable than just buying the stock straight out. I never enter a position by buying a stock straight out. Selling a put gives me extra profit due to the time value that I sell. If I do end up by buying the stock, I’ve bought at a discount. Rich Dad Poor Dad author, Robert Kiyoski, called this buying wholesale instead of retail. That’s about as simple as it gets.
Advanced traders already know the how and why, so what’s in it for them? The short answer is new ideas. I’m constantly reading magazines, newspapers, other blogs and sites on the Internet. I take the picks I read and apply my own analysis to narrow down the scores of choices to what works for me. By no means do I think you should blindly trade on what I pick. Although I am a professional investor, I am not your advisor. My Trader’s Journal is just another valuable resource for you.
I know My Trader’s Journal is a valuable resource for ideas because I believe I manage risk and reward well. To prove it, I write about every trade I make on the same day I fill it, usually within a couple of hours. This means that if I’m full of it, it will show. I’m not cocky enough to think every trade I make is golden. I lose sometimes like anyone. I just profit a lot more than I take a loss. Disclaimer – Do your own research before trading. No part of this blog is meant as personal advice.
A few years ago I started writing some suggestions for friends who were interested in beginning to invest. I’ve had mentors who I continue to learn from and hope that through this blog I can continue to educate newcomers and can find some more peers and mentors who can help me continue to learn and increase my account value and minimize my risk.
My focus here will be to explain how I execute my model for investing with a side category for general education for new investors. Hopefully reading my blog will give you some ideas for determining what type of investor you are and how you can develop your own personalized model. I offer my Excel spreadsheets to use for free (See Excel Spreadsheets section). I welcome questions for newcomers to the investing world and suggested stock picks from everyone. A good exchange of ideas can surely help all of us prosper. I work in corporate America, manage my clients’ accounts and trade and blog outside of that. I trade about 8-10 times a month and document my reasoning for each trade and the research that preceded it. I include with my thoughts on interesting articles I find and theories about how to make more money in the market by selling options. I rarely buy options. That strategy clearly works for many or I wouldn’t have anyone to sell to. I just never figured out how to make it work for me and the risk wasn’t worth it when my own model works well for me.
My Trading Model page goes into full detail on how and why I trade the way I do. In short, for understanding some of my claims in my blog, the key points to know are that during a bull market I try to use 50% of the underlying equity’s value as my cost to determine my gain percentage from a trade. I break a month down to the day to determine the time elapsed for a trade to expiration period and annualize it out to equal a year. In a bear market I reduce my exposure to less than half of my account value. When I’m less confident of where the market will be over the next six months I target somewhere in between 75-125% invested.
I recognize that it’s not exact since I’m annualizing portions of months where I will obviously not be fully invested all of the time, but to balance it I am “over-invested” at other times. I break the month down to the day to give me a better “apples-to-apples” comparison of various options I evaluate through the month. For example, I shouldn’t expect the same dollar return with eight weeks before expiration as with 6 weeks to go. As the time value drops, the percentage goal stays the same and I have a better idea if the trade is worth it for me. I’m all about making money from deteriorating time value and this approach has served me well for years.
This site is not intended to be the definitive source for such topics as how to value an option, what Black Scholes is, what happened in the Tulip Mania of Holland in the 17th century (I just had to mention that since I think every options book I’ve read covers it), how to chart stocks using technical analysis and how to screen for a stock using fundamentals. I do not trade on stocks that do not trade options, so I doubt I’ll write much if any on non-optionable securities. Of course, I do eye some IPOs sometimes which breaks that rule, but that is extremely rare that I ever make the trade. So far, that’s just been more fun to watch.
My claims for year to date returns come from what Quicken tells me. I prefer that since Quicken accounts for time value of my monthly deposits quicker than my calculator does.