Check Your Ego At The Door: Notes On Stocktoberfest

We’ve all been to one of those clubs or events where you have to stand behind a velvet rope while some neckless goon decides who will get the supreme honor of entering the venue.  If you do finally get inside you then find that the room is endlessly divided into a series of “VIP rooms” and where the people you really want to meet are sequestered with their bottle service and Kardashian wannabes.

You end up drinking your watered down twenty-dollar cocktail and leaving with a “swag bag” which consists of mostly  of promotional materials for the next event.  That would be the exact opposite of how the Stocktoberfest event was this past weekend in Coronado, California.

One of the best things about the StockTwits community is not only the access it provides you to some of the brightest and funniest people out there, but how there is such an utter lack of ego present when you talk with those people, and that same vibe was in effect all during the event.

I went to Stocktoberfest not only as a StockTwits blogger and member of its community, but as a fan as well.  I was looking forward to meeting some great people, most of whom I only knew online, and to having an awesome experience. I was not disappointed.

Here are some random, stream of consciousness thoughts about the event and the people I met there….

Coronado Island (The Venue) – I am sure it has stuck many as strange that this little island community in the very Western corner of the country was selected as the Global HQ for StockTwits.  What about New York?  Chicago? San Francisco?  Heck, even a native Southern Californian like myself questioned it at first.

But a common theme I heard voiced by attendees this weekend was, “Oh…Coronado….NOW I get it.”

Coronado has a small town feel, but is right in the heart of an area that is home to a surprising number of financial professional, entrepreneurs, and start-ups.  It is the best illustration I can think of how technology allows us to create the life we want and live it wherever we want.

And believe me, the irony of standing on a beautiful beach with blue skies and cool breezes while the “right coast” was preparing for “Frankenstorm” was not lost on even the most hardcore East Coasters.

Suck It East Coast!

Sean McLaughlin (@chicagosean) – I do not generally do well at “networking” events, but from the moment I stepped into the “beer garden” at the StockTwits HQ, Sean made me feel right at home with his “B-C-Lund!” exclamation and welcoming handshake.

Sean is a great guy, the type that if theoretically he were to convince you to grab “one more drink” before heading back to your hotel, and because of that you woke up the next morning with a hangover, you would just say, “Eh, I was hanging with Seany….it was worth it.”

Phil Pearlman (@ppearlman) – I owe a lot to Phil.  He is the reason I’m a blogger with StockTwits in the first place, having reached out and plucked me from obscurity, and though I Skype with him on a regular basis, this was my first time meeting him in person.

What you immediately notice about Phil when you meet him is a wonderfully frenetic energy that is at the same time both engaging and infectious.  But Phil also has a “sage-type” vibe that kicks in and which draws people to him. Numerous times over the weekend I saw attendees chatting him up and seeking his advice on a range of topics.  It makes perfect sense to me now that Phil’s background is in psychology.

Ivan Hoff (@ivanhoff) – I’ve met Ivan once before, and even before that I liked him because anyone who can play the straight man to Howard with such grace is okay by me.  Ivan is so smart and if you are not following his work on the StockTwits 50, you are missing out.

Watching the way Ivan explained his trading style during his presentation, one could almost get the false sense that he is detached from his work because he just let’s it speak for him, which it does loud and clear.  But there was a telling moment when you knew that wasn’t the case.

Somebody during the Q&A session asked him how his screening process was different from IBD’s.  A previously relaxed Ivan came right to edge of the stage, and prowling back and forth, looked right at the questioner and gave him a focused, concise, and almost aggressive delineation on the difference between the two methods that you could see was rightfully driven by pride of ownership.

Fuck yeah Ivan!!!!

The Ladies of StockTwits – Everyone knows I like to play the over-the-top, tongue in cheek, Cro-magnon guy on the streams, but I have big respect for the women in the community. That respect is two-fold for those who attended this male dominated event, something I could see as being fairly intimidating for the fairer sex.

One of the ladies I enjoyed talking to was Lydia Idem Finkley who writes a forex blog on the StockTwits Networks.  Lydia waded right in with the guys at one of the after show venues and I found here to be charming and sharp as a tack.

My favorite moment was when we were talking about family and life in general, and someone brought up the question of when were the best times for liquidity in the currency markets. Without missing a beat, Lydia went right into an analysis of the optimal times to trade the different currency pairs.

Hopefully we will see more great ladies like Lydia joining the StockTwits community and attending live events in the future.

Julian Hebron (@thebasispoint) – For me Julian is a kindred spirit because our blogs were both added at the same time and I love his taste in music and knowledge of pop culture references.  Everybody who reads his stuff knows he is a monster in terms of knowledge in the real estate and mortgage markets.

But what I found out by meeting him in person is that he is also a very laid back and cool guy, the type you feel comfortable with the first time you meet them.  He is one of the people whom I wish I had more of a chance to hang out with.

Greg Harmon (@harmongreg)- Greg has over twenty thousand followers on StockTwits alone, which is a testament not only to his knowledge of stocks and trading, but to his willingness to share.  In fact he excused himself (relatively) early on Friday night in order to put together charts to share on the stream for Saturday morning…..twenty three of them.

Greg’s humor has always been a favorite of mine online, but it comes across even drier in person, which I love.  Though a veteran of the trenches in NYC and Boston,  he has a “Cleveland Zen” type quality about him that is just very calming and explains perfectly why he makes Ohio his home.

J.C. Parets (@allstarcharts) –  J.C.’s presentation was perhaps the biggest surprise of the weekend for me.  I’d known J.C. as a good guy with a passion for technical analysis from the streams but I assumed his presentation would be along the lines of “let me show you some trendlines and moving averages.”  Boy was I wrong.

J.C. illustrated his “top down” approach to investing and technical analysis that was more comprehensive and more nuanced that I would ever have imagined.  The way he went through different macro charts and put the pieces of the puzzle together was fascinating.  There wasn’t an asset class that he didn’t touch on and it was very apparent how broad and deep his knowledge of the markets is.

The best part though was his enthusiasm for what he was doing.  You could see in his face and hear in his voice that this was his passion, something that he loved to do. J.C. is starting up his own shop right now, and I have no doubt that we will look back in five years and find that he has become a hedge fund star.

You can check his presentation deck out here.

Joe Fahmy (@jfahmy) – Joe is one of the few attendees at Stocktoberfest whom I had previously spent some time with and he is one of my favorite people.  Passionate, focused, funny, energetic, insightful, these are only some of the words to describe his presentation entitled “5 Qualities of ALL Great Traders.”

Joe is a student of history’s great traders and has a wonderful ability to crystallize their best traits and make them relevant and understandable in today’s market.  He is also a natural on stage and knows how to get the crowd engaged.  Joe will be speaking at the Traders Expo in Las Vegas on November 15th, so if you are going to be there make sure to catch him.

Brian Shannon  (@alphatrends) – Brian is one of the “big dogs” on StockTwits and I admit that I was a bit apprehensive in meeting him, although my friend Steve Gomez (@todaytrader) told me Brian was a great guy.  Steve was right.

Down to earth is the best description I could think of.  No pretense.  No arrogance. No aloofness seemed to be a part of Brian’s personality.  His presentation on using multiple timeframes for trade entries was so solid, so right on the money, and one that I heard many participants talking about at the break.  Brian will also be appearing at the Las Vegas Trader’s Expo on November 15th, and seeing his presentation is a must.

Dynamic Hedge  (@dynamichedge)- At this stage in my life I thought I was pretty much passed the point of having preconceived notions about people, but I admit, I had one about Dynamic Hedge.  For some reason I pictured him as a grizzled old-school quant, who sat in his computer lab all day writing algorithms.  Again, boy was I wrong.

Young, good-looking (no homo), and wickedly smart would be the correct description for Dynamic Hedge.  I was fortunate enough to see him do a demo in a breakout room of his new product for determining outcomes in scenario based trading, and it was one of those times where you say to yourself, “Oh, wait a minute……that is pretty frigging’ cool.”  Throw in the fact that he has a great sense of humor and he’s got the whole package going for him.

Josh Brown (@thereformedbroker) –  What can you say about Josh?  He is what all of us bloggers want to be when we grow up.  Author, investment advisor, rap connoisseur, CNBC personality, creator of ungodly amounts of quality content, these are all the things we already know about Josh.  But what struck me about Josh was the way in which he engaged people.

High profile people like Josh who have great demands on their time often limit their interaction to a few select people, but that was not Josh at Stocktoberfest.  I saw him talk with anyone and everyone that wanted some time with him.

What’s even more amazing for a person in his position is that when you do talk with Josh, there is no checking his watch, interrupting phone calls, or glances past you to see if there is someone more important he should be talking to.

I honestly think Josh would be as willing to talk with the President of the United States as he would the guy who vacuums up the oval office on the night shift.

Josh gave me some great advice regarding the direction of my blog, and although I probably won’t initiate the “bclund shower-cam,” some of his other insights I am going to take to heart.

Howard Lindzon (@howardlindzon) – Howard was the prime mover for Stocktoberfest and I suspect the reason a number of people came from so far away was just to get some access to him.  Well, if you wanted “Lindzon access,” man did you get it.

At the StockTwits beer garden, there was Howard.  At the pre-event meet up, there was Howard.  At the event, if you were in the lobby, there was Howard.  If you were hanging out front, hey, there was Howard.  At the post event get together, there was Howard.  I even ran into him myself while I was walking down the streets of Coronado looking to get slice of pizza.

By the end of the weekend, those same people who came from so far away just to get access to Howard were saying, “Jesus Christ, enough already……I’ve had as much access to Howard as I can take.”

As the host of the event, Howard didn’t just introduce a guest and then slink back to the green room, but often acted as onstage interviewer, and for those who had their own presentations, he would just hang out in the front row with the rest of the crowd.

It was there that you could see that this event was not a burden in the least to him, but was something he looked forward to as much as anyone, and that he was having just as good a time as everyone else at the event was.

Brian Lund (@bclund) – I came to Stocktoberfest with a mixture of excitement and trepidation.  Traditionally I do not “work” networking events that well as I have never instinctually felt like a social person.  But something funny has happened to me over the last year of blogging and being a part of the StockTwits community; I’ve found my social voice.  Who would have known that interacting in an online environment would have had such benefits in the real world.

I also realized that StockTwits is a much broader platform for ideas than I originally thought. Markets and trading might be the “gateway drug” but once you get involved in the community, you find yourself exposed to a much wider range of ideas and topics than could be imagined.

One of the best parts of the event for me was actually listening to the non-trading presenters whose topics ranged from bonds, to technology, to the role of data and content in our lives, to the incredible start-ups they were running and the products they were creating.

Being in the presence of so many intelligent and accomplished people reminded me that I am not as smart as I like to think I am.  It was reminiscent of when I first heard Neil Peart play drums.  I had been playing for a few years myself and thought I was pretty good, but hearing someone with such talent put me in a quandary.  I wasn’t sure if I should say “what’s the point?” and just throw my drums away, or keep them and woodshed even harder in order to raise my game.

This weekend at Stocktoberfest was an incredible experience for me on a number of levels, the most important of which was that it made me realize that I definitely want to “keep my drums.”

If you want to learn more about day trading and the markets, all while helping to kick pediatric cancer’s ass, check out my book, Trading: The Best Of The Best – Top Trading Tips For Our Times.  It includes over 200 market tips from 60 active traders and investors, and all proceeds go to the McKenna Claire Foundation to help support research for a cure.  Just click the banner below or go directly to Amazon by clicking here.

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Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Check out “The Best Of bclund” to get started.

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The Rules Of Stocktoberfest

(With apologies to “Fight Club”)

1st RULE: You do not talk about Stocktoberfest.

2nd RULE: You DO NOT talk about STOCKTOBERFEST.

3rd RULE: If someone says “stop” or goes limp, taps out or pukes…..Stocktoberfest is OVER.

4th RULE: Only two VC’s can fight over a start-up candidate at a time.

5th RULE: Only one beer bong at a time (you know who I am talking about).

6th RULE: No shirts, no shoes, no non-preferred, pre-money valuation equity investments.

7th RULE: Stocktoberfest will go on as long as it has to….or until someone threatens to streak through downtown Coronado.

8th RULE: If this is your first night at Stocktoberfest, you HAVE to buy me a beer.

If you want to learn more about day trading and the markets, all while helping to kick pediatric cancer’s ass, check out my book, Trading: The Best Of The Best – Top Trading Tips For Our Times.  It includes over 200 market tips from 60 active traders and investors, and all proceeds go to the McKenna Claire Foundation to help support research for a cure.  Just click the banner below or go directly to Amazon by clicking here.

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Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Check out “The Best Of bclund” to get started.

Click here to “Like” the bclund Facebook page.

7 Ways To Better Focus Your Trading

When it comes to focus, I have had a life long battle with……………hey, look at that cat over there!

Hmmm…now where was I?  Ah, yes…focus.

For me the inability to focus is a by-product of ADHD.  My ADHD is something that I am neither ashamed of nor wear like some retarded badge of honor.  Throughout history, many intelligent, good-looking, and well-hung people have had ADHD and it’s just a part of who I am.

However, you don’t have to have ADHD to suffer from a lack of focus.

We are pulled in so many different ways these days, with an unending stream of data and information bombarding us at every turn, that it’s easy to get our attention diverted from what we are doing.

And when it comes to trading, lack of focus can be devastating.

Below are some things I have learned over the years that have helped me improve my focus, not just in trading, but in other aspects of life as well.

Tune Out, Turn Off, Crush It

For a the longest time I was an advocate of turning the sound down on CNBC and other channels of its kind.  Then I suggested putting your TV somewhere in back of you so you couldn’t see it.  Now I have gone the full route and just turned my TV off. Next I plan to run over it with a steamroller in front of CNBC’s Worldwide HQ, while wearing a Jim Cramer mask.

There is nothing, and I mean NOTHING that you need to see on CNBC that will have any bearing on your trading.  Any news that is important you will see in price first. And if you just still need to know why price is moving the way it is, you can pull up your StockTwits stream which I have seen be anywhere from 15 minutes to an hour ahead of CNBC in terms of breaking news.

Trust me, just get rid of it, and you get rid of a foe in your quest to get focused.

BOO-YAHH..!!!!

Cut The Chat

There are a lot of great trading services out there, and I have advocated subscribing to a number of them.  Most, in addition to providing nightly commentary, have a chat room that you can participate in during the trading day.  For some people this can be a positive, but for others, it can be a big negative.

Some people have the discipline to only check in with the chat occasionally, in order to get trade ideas or info, but for most I think it can become a distraction.

If you find yourself more interested in responding to what someone just said in the chat room or talking about the latest political news, it might be time to just shut them down.

Katy Bar The Door

Back when I ran my own business, I thought I was the epitome of the cool, hip, boss of the future because I had an “open door” policy.  I never wanted it to seem like I was cutting myself off from my employees or was so aloof that they couldn’t just waltz in whenever they wanted and let me know about the latest minute problem.

Nowadays I prefer the “closed-door” policy.  In fact, I really prefer the “closed, locked, bolted, with a sign on the front that says, ‘Get The Hell Away From Here'” policy.

I recently watched one of those Discovery Channel shows where “prepper” wackos built doomsday bunkers in their backyards.  One guy had his made so that when his unfortunate and unprepared neighbors tried to enter the shelter to find a scrap of bread for their dying infant, a barrage of razor-sharp blades and fire cannons would be unleashed on them, in theory loping their heads off and then burning them to a crisp, possibly to use as an appetizer for that nights “prepped” dinner.

I want that setup at my door.  I don’t want to be in the loop if I don’t have to be.  I want a quiet, dark, and dungeonesque type office, free from outside distractions.

If someone really needs me they know where I am, and in the meantime I’ve isolated myself from all sorts of distractions that cause me to lose focus.

Get The Hell Out Of My Office!!!

Monitor Less

When I first started trading full-time I dropped 5K getting a custom-made Dell computer that could support four monitors.  Then I put two lap tops on either side of me.  I looked bitchen ass cool, but it did not help my trading one bit, and during the summer it made my office unbearably hot.

Multiple monitors work for some, but mostly they give you more opportunity to put up crap that will pull your attention away from the markets and your trading.

Do you really need to have Twitter, Facebook, Pinterest, Goolge+, HotGayDudeCams.com, and other social media sites up on your screens while you trade?

One of the most successful traders I know only uses a laptop when he trades.  One laptop, for everything.  Charting, analysis, order entry, and communications.  This really is a case where less is more.

Let Trades Come To You

One of the things that can really cause you to lose focus is to be constantly flipping through charts, worried that you are going to miss the setups and moves you have been anticipating.

A while back I wrote a post entitled “Making Trade Setups Come To You” where I outlined an alert based methodology that ensured that you would not miss out on any trades and relieving you of the related anxiety

Check it out and I assure you it will help you relax and better focus on what is important during the trading day.

Turn Off The Talk.

The process of being more focused in your trading doesn’t start and stop with the opening and closing bell, it’s something you have to work on in your “civilian” life as well.  One of the best decisions I ever made was to turn off talk and news radio about five years ago, and put music in its place

Now I listen to about fifteen minutes worth of news when I first get in the car in the morning, and then after that the rest of the day is spent “talk free.”

This is another situation where I promise you, you are not going to miss out on anything important, unless you care about listening to people whose job it is to create divisiveness and controversy purely for shock value in order to get higher ratings.

The type of music you replace it with can be anything that you enjoy, but I would suggest that you put in a healthy dose of classical music each day.  There have been study after study done that show  that classical music, in addition to relaxing you, can actually make you smarter just by listening to it.

For the best classical music station on Earth, which you can reach via FM or HD radio, streaming internet, or smart phone app, check out www.kusc.com.

Just turn it off…!!!

Batch The Hell Out Of Everything

Checking email, voice mail, and social media non-stop not only takes up our valuable time, but are activities that just encourage a helter skelter and unfocused way of approaching things.

If you respond to each of those things as they come up, you are never able to keep a consistent and uninterrupted train of thought, which is critical when it comes to retaining focus.

So instead of addressing each of these things as they come up, do everything in batches.  Set aside specific periods of time; ten, twenty, thirty minute blocks of time where you will focus only on returning emails, phone calls, checking social media, or taking care of any repeating and distracting issues, which allows for more efficiency, effectiveness, and focus.

You will also find that you can take this technique into other areas of your life.

We already batch things like going to the laundry or taking the garbage out, but have you ever thought of having sex seven or eight times in an hour so you don’t have to worry about it for the rest of the week?  Come on, get creative and try to think out of the box.

It Will Take Some Work

You can’t just follow these tips and turn your trading from a disjointed mess to laser focused in a day or even a week, but as you implement them and stick to them, you will find that within 2-3 weeks you should have a new-found ability to focus on your trading as well as other important tasks in your life.

Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).  Check out “The Best Of bclund” to get started.

Part 2 Of The 100 Percent Accurate Trading Newsletter

I have issues, there’s no doubt about that.  Though I have tried be more “zen-like” over the last few years, there are still things that get me upset that probably shouldn’t.

Very high up on that list are what I call “unimportant clarifications” and the people who say them; things that not only have no bearing on the story, point, or lesson being told but actually detract from the overall idea that is being presented.

Here is an example from a real-life conversation I recently had…..

“Oh, I heard you went up to see *blank* the other day.  I guess she hasn’t been feeling good lately, how did she look to you?”

“Well, I have to say, for somebody that just turned eighty-six she looks very, very…..”

“…..she’s actually eighty-five!”

“Uh….really?  Okay, eighty-six then.”

Now let me tell you what that “really” means in this context.

It means, “Really?  That is what you are fucking interrupting me to say?  That she is one year older than I said?  Forgive me, but didn’t you ask me how she looked?  I’ll give you the benefit of the doubt that you are seriously are interested in how *blank* is doing, so if that is the case, what does one extra year matter?”

“Did you think that your clarification was going to change my story dramatically?  Like, ‘she looks very good for someone who just turned eighty-five.  What, she is eighty-six?  OH…MY….GOD!!!  Then she looks like somebody who is literally knocking on death’s door.  We better call Forest Lawn right now to make arrangements.'”

Alright, hang on for a moment while I breathe and get in touch with my inner spirit animal………ahhhhhhhh!  Better.  I love porpoises.

A few weeks back I did a post called “The 100 Accurate Trading Newsletter” where I gave an example of how someone could scam you into thinking that their newsletter was a consistent money-maker, when in fact it wasn’t.  In that post I used the example of a newsletter that mailed or emailed you a solicitation to subscribe.

And out came the “Clarificators.”  They made a point that nobody markets via snail mail anymore, and that unsolicited emails are already viewed with as spam to start with.

Well, that was not my point.  The methodology of how you find a potentially fraudulent trading service doesn’t matter, nor does it safeguard you from being scammed.  Case in point…

I have recently come across a new trading service whose principal seems to be a former, still sometimes, spokes-model/reality TV participant.  This lovely lady is CRUSHING THE MARKET on a daily basis.  The proof on the site is a daily “screen cap” of the trading profit (never a loss) from her brokerage account.

Look, I am not saying that Vanna White junior is NOT crushing the markets, I am just saying that the “proof” that is being shown is suspect.

If I was an enterprising person who wanted to run a grey area type trading service scam, the first thing I would do would be to get a good-looking, sexy lady as my frontman.  Why?  Because the fact of the matter is that the vast majority of traders are guys.

And the vast majority of guys lose any sense of logic and objectivity when hot women are involved.  It’s why every guy that goes to a strip club thinks that the lady who is dancing for him is doing it because, in his words, “she really likes me.”  And need I remind you of the Hot Trader Chick post.

The next thing I would do is open two different accounts at one broker and fund them with the same amount of money.  Then I would do the modern-day version of the “A/B scam.”

I would buy 500 shares of XYZ in one account and at the same time short 500 shares of XYZ in the other account.  Then whichever account was up for the day, I would “screen cap” that one, conveniently leaving out the account balance, and then display it right next to the smiling face of the stripper…..uh, I mean trader who did the trades.

But that’s just me.

Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).  Check out “The Best Of bclund” to get started.

9 Mistakes Great Traders Never Make

In order to be a great trader you have to perform like a well oiled machine.  There is no room for error.  A momentary lapse of concentration or focus can spell disaster. Great traders DON”T MAKE MISTAKES.  You will never see them…..

  1. Try to close a position but accidentally DOUBLE it instead.
  2. Put a swing trade on and realize AFTER the close that earnings are coming soon. Like the next morning.  Before the market opens.
  3. Buy the CALLS in a stock that is breaking out at what they think is a bargain price, only to find out later that they actually bought the PUTS.
  4. Constantly drive by their ex girlfriend’s house to see if she is dating that idiot biker guy with the tats who will never love her the way they would….
  5. Knock off early for the day to go rollerblading, sure that they put a hard stop in on their position before they left (but didn’t).
  6. Be so quick on the trigger that they get a trade down in $AAPL at the open before a 20 point run.  Then realize that they actually bought $APPL.
  7. Continuously hit the “submit” button on their trading platform when their order “hangs up” only to find out that they bought their position eight times.
  8. Listen to the whole “Best of WHAM” album online, unaware that Spotify is auto-posting that info to their Facebook timeline.
  9. Think they have a “one cancels other” limit and stop in place and take a long lunch after their position hits it’s profit target.  Then come back later in the day only to learn that price reversed, hit their stop (making them net short), and then rallied.

By the way, I am a great trader because as far as you know, I haven’t made seven out of nine of those mistakes, including number three just yesterday.

Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).  Check out “The Best Of bclund” to get started.

The 5 Hardest Stocks To Trade…EVER!

I was sitting with some traders the other day, doing that standard thing standard traders do, taking about trading.  The subject came up about tough stocks to trade. Not hyper-thin biotechs or Ukrainian ADR’s, but normative, mainstream stocks that for some reason have been our personal bête noire to trade.

Five stocks popped into my head.

1.  Intercontinental Exchange ($ICE)

2.  ProShares UltraShortFinancials ($SKF)

3.  Wynn Resorts Limited ($WYNN)

4.  Potash Corporation ($POT)

5.  Walter Energy ($WLT)

For some reason over the years, these are stocks that I have constantly had trouble trading successfully.  So much so that not unlike a beaten dog, even if I see that they have good looking charts, I tend to shy away from them.

What stocks stick out in your mind as troublesome to trade?

Why not subscribe to bclund.com for free  Via E-mail or Via RSS and follow me on StockTwits and Twitter?

What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in).  Check out “The Best Of bclund” to get started.

How Much Money Do You Need To Trade For A Living?

coins

Note: I get new stock ideas every day from the SPARK app. Download it free from iTunes.

If you have a hat, you might want to hold onto it. Get the smelling salts out……and keep them close by.  If anybody is in the other room, call them in and tell them to assume the “I’ll catch you” stance behind you.

Ready?

I wasn’t always a babe magnet.

It’s true.  In the dark days before I met my wife, I wasn’t actually beating women off with a stick.  I mean, I had dates, but they were not as numerous as you would assume.  This meant each one was special, however one in particular stands out.

I was very young, working as a bellman at the Sheraton Newport, and living with four guys down by the beach in Newport.  One night while at a local watering hole I spotted a beautiful girl who looked like she didn’t belong there.  Since I was already drunk, I ambled on over to her, ran my mouth, and for some reason ended up with a phone number and a date for the following night.

In the sober light of the next morning I panicked for a moment as I realized that this girl would expect something a little bit “higher class” on our date that evening. Unfortunately, I had about thirty dollars to my name until my next bell shift.

Let me be clear on this, not only thirty dollar in cash….thirty dollars to my name. There was no ATM card, no credit card, no parents to call on for extra funds, thirty bucks was it. Fortunately, I had a place just for situations like this; The Ocean View Bar & Grill.

The move with this place was that even though they served bar food (read: cheap food), this hidden gem was situated outside the back of the Hotel Laguna right on the sand, with one of the most picturesque views in all of Southern California.  Once your date saw the view as you emerged onto the patio, they could have served corn dogs and Twinkies and she would have still thought she was at the best five-star restaurant in town.

I figured I could easily bring the whole evening in, with drinks, for under twenty bucks (remember this was almost twenty-five years ago), so I headed out to pick her up in my 67′ Mustang, rocking my Member’s Only jacket, and blaring Flock of Seagulls from the speakers.  “This is going to be my night tonight,” I thought to myself.

We pulled up to the hotel, parked the car, and headed inside.  Being the gentleman I am, I let her go ahead of me down the hallway that led to the entrance for The Ocean View Bar & Grill, at the end, on the left.

The left.  It’s on the left.  Did I mention that the entrance to the Ocean View Bar & Grill was on the left? But not knowing where we were going, she went straight, instead of left.  Straight.  Straight into Claes……their fine dining restaurant.

You know how when you get that gap down before the open on unexpected news in that large position you have been massaging for weeks and a cold shiver goes down your spine?  You immediately think to yourself “can I pull myself out of this, or do I just cut the cord and bail?”  That was my thought at that exact moment.

But what was I going to do, try to wave her out and try to explain, in front of the maitre d’ and customers, that I didn’t have enough money for THAT restaurant?

Fortunately, she didn’t drink alcohol, and in order to not make her feel self conscious, I drank (free) water too.  She ordered the chicken, and I “having had a late lunch” chose the small house salad and the complimentary bread.  I got out of there for $29.50, including tip.  The valet got the other fifty cents and we ended up dating for two years until she moved to Canada.

At that point in my life, thirty bucks could sustain me fine, as long as there were no unexpected expenses, but nowadays that won’t even cover a Pokemon DSi game for my daughter.  I am at a different stage in my life.

I was reminded of this story by a question I got in response to my recent post “9 Reasons Everyone (Yes Even You) Should Learn To Trade.”  The question was, “how much money do you need to trade full-time?”

Even though my post was referring to part-time trading, it is a good question to ask. The answer however varies depending on what stage you are at in life.

There are considerations based on what time and financial stages you are at.  If you are a young person or with minimal expenses, you can afford to start with much less than if you are a forty-five years old, with a house, car payments, kids, etc.

You also have to factor in what psychological stage you are at when deciding how much of a grub stake you will need.  In periods of no profits, or horror of horrors, actual losses, how much money will you need in the bank so you don’t get nervous and rattled, something that will only hamper your trading success.

And what about your style?  What stage is that at?  Will you be day trading or swing trading?  If you are day trading you will get more leverage on your position which can theoretically make you more with less, but you will need at least 25K (or in reality 30K) to be classified a pattern day trader.

Swing trading requires less money to fund an account, but there will me more periods of “waiting” for a move where your money will not be working for you at all.

So here is my best starting place, which you should modify based upon your own personal stages in terms of time, finances, psychology, style, etc.

If you are somebody with little or no overhead I think you need to have enough money set aside to cover at least six months of your living expenses NOT INCLUDING YOUR TRADING MONEY.

If you have higher monthly expenses I suggest you have at least one year’s money set aside NOT INCLUDING YOUR TRADING MONEY, because you have a larger burden to support and there is more of a chance you will need that extra cushion.

As far as how much trading capital you will need, it will depend on your style and what you trade.  Sure you can day trade with only 25K but one loss and you will be below the minimum.  And what if you want to trade $AAPL or $GOOG?  25K is only going to get you 100K of buying power which is only about one hundred and thirty shares of $GOOG.

Ideally it would be best to have enough day trading capital to trade 250-500 shares of the most expensive stock you plan to trade.  If you are going to swing trade you will need more capital because you will only get 2x overnight buying power, and though you may get larger moves than in day trading, they will be fewer and will take a longer time to play out.

In the end you have to figure out how much money you need in the bank and how much money you need in your trading account to give you the piece of mind that will allow you to focus on your trading.  Then I would add another 20% to each.

You also need to determine what a “reasonable” annual return would be on your trading capital, and make sure your account equity is enough so that the return can not only sustain you, but grow your account balance.

Finally, I am a big believer that if you can’t trade well with a small account size, having a larger account size won’t help.  The best way to find out if you can trade well before you make the jump to “trading for a living” is to first successfully master trading part-time, over an extended period of time, in all different market conditions.  Then if your trading skills are proven out, the size of your account will be less important.