Daily Journal Update 1/12/13: A New Journey
Today I finally decided to make my private trading/life journal public after a few people bugged me with constant requests on how I do what I do. Maybe some of you will enjoy it, maybe some of you guys will think its pointless, but hopefully I can impact someone. If I can just improve one person whether it be in trading, or in life, then all these posts will be worth it. This will all be free of course, and will just re-cap how the day went. Once I get going, I would love to get some feedback to see if any of this is actually making a difference. Maybe I will just be talking to myself, but hopefully someone can relate.
The importance of a trading journal is extremely undervalued. I have kept mine private for quite some time now, but I want to REALLY stress the importance having one. I recommend it to each and every trader, even if you are not full-time. Trading is one of the most stressful career choices a person can make. In fact, finance has one of the highest suicide rates among any profession. 90% of ALL traders fail, only 1 out of every 10 survive to make any money at all. The psychological agony of handling your own money can drive even the strong-minded insane, and even worse if you trade with OPM (other people’s money) like I do. Yet, we love it. But why?
Is it the path to riches that we seek? Maybe it’s financial independence, or the freedom to work from anywhere in the world. Whatever it is, we love it.
Anyways, it’s all psychological. Winning, losing, stress, etc.. it’s all mental. If you want some great points on the psychological standpoints, read this FIRST post I wrote. If you like it, move on to the SECOND.
Now in order to see where I am going with this, you have to understand where I started from. I am a kid, and I am only 17 years old. I have a lot to learn still even with the success I have had so far. I am blessed and thankful for what I have, but I want it all, and I don’t plan on stopping until I make it there. Recently, I talked to a kid named Ben Banks who contacted me through twitter. He is also a young 17-year-old trader like me, but he focuses on technical analysis and macro movements in large cap stocks. Recently, he blogged about how he started trading, and his life before it. I swear when I read it, I felt like I had typed up the post myself. It was kinda scary how similar our personalities were, and the timeline in which our trading lives evolved. Although he is into more of technical analysis, and I am into biotech’s, I’m sure you will enjoy this post below. Here is to the start of an epic blog series. Cheers!
“It all began a long time ago when I was just a toddler. All throughout my life I always wanted to find a way to make money. I had lemonade stands, “festivals” in the front yard (which was nothing more than foosball table which I would charge kids to use), Lawn mowing services, babysitting, leaf raking, gumball machines, a YouTube channel, a blog, and finally eBen (a “I Sold it on eBay” type of company). Each one of these childish ideas made me money, but I was not satisfied. I knew I was cable of more; I ignored the stereotype “kids can’t be as successful as adults”. I believed in this because when I was around 11 years old and had spoken with many adults, and saw many of them I often times I thought to myself “What do they do for a living?” or “How did they end up like this?”, I can do better. Often times I found myself doing math and creating a budget for myself as well always thinking of the next business I could start. My parents knew this was unusual, and often asked me why I did what I did, I responded saying “Because I want to earn money” or “Because I like to”. There was hardly a time in the week where I would not be thinking about what’s next, and how can I profit from it.
I do not remember exactly how it all unfolded but It was one day in 2008 (I was 13 years old) when I told my dad “I want to invest, and buy stocks”. I said this, of course, to make money. I knew from the TV and other people that it was possible to make millions in the stock market. Therefore I thought to myself “this is perfect, I finally have the chance to make money, develop a skill, and do something some adults do not do.” Along with my small amount of money I had earned from all the miscellaneous companies I started, and my strong desire to succeed – I opened a custodial account with my dad. My dad and I both knew nothing about how to choose investments so we did what we thought was the best idea; we choose a couple companies in which I knew what they did, and I “liked”. Some of the first stocks I ever bought were Target, Nike, Nucor, and the SPY (SP 500 ETF). I let them sit in there for a couple years, and luckily I had bought after the market started to go down. I logged in every now and then to see if I were up or down, most of the time I was down though. Eventually I got bored of this and realized I must be do something wrong because all I have done is break even after all this years. At this point, I started doing real research. I started with Google searches that sounded something like this “how to make money in stocks” or “How to choose something to invest in”. These searches landed me in places in which you would imagine, websites that do not tell you anything the whole world doesn’t already know. But, eventually I did find something that grabbed my attention, and Wikipedia page that mentioned Technical Analysis.
At this point I knew what I wanted to do, and I knew this was it. I knew I was a visual person so technical analysis was the thing for me. I started to research, and I read many websites before really finding out what it was all about. I learned it was much more complicated that I had thought, and I believed it was much more confusing than it really was because of the complexity of some of the charts I ran across. I thought to myself in this process “How will I learn all of this? There are so many indicators!”. At the time I thought that all the charts had to be identical and everyone was looking at the same thing. This was obviously a huge misconception on my part. I soon found out that it is much more an art than a science, being able to read charts. I needed to create my own charts, and develop my own techniques. I was never a good art student so this scared me a little bit but I got through it, and the more I read about all the different types of candles and indicators the more I understand which ones would be best for me. During the learning process I found a website called T3 Live – an education website with real traders – I learned almost everything from them. This is what I based my charts off of. After I had determined I had learned enough for the time being, it was time to close the Sharebuilder account down and move to a real trading account. At this time I was around 15 years old.
Once I had opened my new account I was very hesitant to start trading, I was not yet confident in my skills. But soon enough, I began. It has been a bumpy ride, and I have not mastered it by any means but I have met many cool people, and my chart reading ability improves exponentially every day. I am now 17 years of age, and that is my trading journey – So far.” -Ben Banks (http://thebagelshop.weebly.com/index.html)