A Look Back at 2008: From Investor to Trader
This last year was an amazing one for me. The last quarter of 2008, is when I realized I was more of a trader than an investor. What’s the difference? Investors are people who invest with the hope of making a profit in the long run, and don’t always have a strategy of dealing with losses. On the other hand, traders have a fixed plan to earn a profit and usually have a pretty good idea of when to get in and out of their investments in an effort to yield a maximum profit.
The majority of my college education has revolved around math, logic and programming. I have learnt how to approach problems logically and am now using these same analytical and quantative skills in my trading practices. There is a huge learning curve involved, which includes understanding market controllers and enforcing discipline to overcome greed and accept losses. It is now my goal to learn these skills and to understand the markets better. I also want to constantly come up with innovative trading strategies and learn to trade other instruments. This is my goal for the year 2009.
I went ahead to summarize my active trading in 2008, and have summartized it below for my readers:
In my post on 9/22/2008, I revealed that my account was valued at $3609.66, while the Dow Jones Industrial Average was at 11,388.4
At this point, I had not started trading actively, and had been sitting on stocks I had owned for over a year, with an occasional short-term trade here and there. Before I knew it, the market collapsed uncontrollably and on 10/10/2008 my portfolio was valued at $2719.72, while the Dow Jones was at 8451.9. At this point, is when I decided to take charge of my portfolio, and began to invest actively. Now, on 12/31/2008, my portfolio was valued at $3430.26, and the Dow Jones was at 8776.39. Here are some stats:
From 9/22/2008 to 10/10/2008, the DJIA was down 26% and I was down 25%
From 10/10/2008 to 12/31/2008, the DJIA was up 3% and I was up 26%
From 9/22/2008 to 12/31, the DJIA was down 23% and I am down 5%
From now on, for the rest of this post, a trade refers to a combination of a buy and sell orders for a position.
Since 10/10/2008:
Total Trades = 15
Profitable Trades = 12
Loss Trades = 3
Average Time/Trade = 8 days
Lowest Time/Trade = 0 days
Highest Time/Trade = 48 days
Median Time/Trade = 4 days
Worst Loss/Trade = -$74
Most Profit/Trade = $191.70
Average Profit/Trade = $31.5
Median Profit/Trade = $30
Goal for 2009?
I think my primary goal is to learn more about the markets and trading strategies, and that’s what I will be working on. In terms of a more concrete goal, I would want my portfolio to be valued at $5000 by 12/31/2009. This comes out to a profit of $1569.74, which is equal to a 45.75% profit in the year. I understand that this is very high, but I think this is doable, specially with the expected volatility in the markets this year. I will keep putting up updates on here about my progress towards my goal.
January 2, 2009
Posted in: Performance
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