A new portfolio

I'm going to start either one or two new portfolio. One will be based on price action and technical analysis and the other one will be fact based. Both of them will have pretty small accounts, say $5K each.

I've been working with my good ole trading friend for a short term trade and it's about time to go live. He has just so much passion on trading and he's a kind of person who never gives up. He can sit in front of computer for hours and hours until he finds something profitable. He is constantly looking for a way to increase his probability.

While I built my house, he kept asking me when I'd be back to trading. He doesn't mind sharing what he's been doing and how he's been making good money consistently. He's always encouraging me saying 'we' can do this. Simply a nice person who can't say no if I ask any.

Even if I still have a lot of things to finish around the house, I did let him know, I'd like to come back on trading. Over the past few days, he shared everything he does and I spent a few nights with him with live charts.

What I'll trade is euro currency (6E). Euros simply move a lot compared to ES. If ES moves 10 points (or 40 ticks), it's probably a good day to trade. For euro, it's not hard to see 100 pips up and down, which is equal to about 400 ticks. This will work pretty well because I can get up early and trade while I have to miss US market hours to trade ES anyway. What I'm looking forward is about 3 small winners: 1 fixed target and 1 runner.

Another method is completely fact-based. I'm a big fan of fact based trading. Options selling was certainly one of fact based trading methods. If I didn't spend too much money on construction, I would have been still selling options just like Nat gas and Lumber. Nat gas would have been a killer altho it's 20/20 now. This method is pretty simple. Looking at different markets, I'm trying to see if a particular day has been positive or negative. For example, everybody knows Dec has been a positive month. There's a backtest data that especially first day of Dec is particularly bullish. Buying ES at close of 11/30 was a setup. The target was 15pts although it moved a lot more. This is usually a full day trade, but it sometimes takes 2-3 days if things are profitable, to let them run a bit more. Trading instrument would be ES, EURUSD, USDJPY and EURJPY. I probably have one position at a time.

As for markets direction, I have no idea what's going to happen. I kind of hope markets would drop so that I can refinance, but what I hope has nothing to do with what's likely happen. As markets have been extended quite a bit, I don't want to buy a lot, but I've found a few stocks I'd like to accumulate over time due to strong fundamentals. Too many people are still worried about a double-dip, which means it's unlikely happen. All the crashes happened when no one (or 99% people didn't expect). Gov will keep pouring money because 1 million dollars in 2030 is nothing compared to one million in 2010.

Another thing is historically real estate has been always the key to wealth. Sure, real estate was killed in the last few years, but I still think many still believe once real estate takes off that will once again become a key to wealth. This will take a while to roll over, but if I slowly get positioned, it'll be paid off handsomely.

I'll not going to post trade-by-trade, but I'd like to update the end of balance each day until either I keep trading or blow up the account. It was nice to trade a big account, but it'll be interesting to make a new small account grow again.

Market

It has been a while since my last post here. I've been just super-busy building a house. It's not done yet and I don't know if this will ever be done. There are so many times when I thought I should have just kept renting.

As the house is getting close to be done, I reactivated my trading account and slowly started getting used markets again. What I found very interesting lately is the relation between bonds and stocks. There's an old market wisdom saying, 'Bonds always know something...'

Stocks are rallying but if you look at Bonds, it's almost at all time high. If everyone's taking risk, Bonds shouldn't be at this level. Sure, Bonds can be wrong, but we've seen so many times markets would rally in a very thin volume or with no apparent reason. It goes up so slowly, but when it starts selling, it drops very very quickly.

Nat gas is at an attractive level regardless of fundamentals. I missed good trading opportunities in grains.

Break

I have been pretty busy at work and, above all, home building. After I got out all of my long term trades, I've been taking a loooooong break from trading. I didn't mean to take this long, but boy, this home building is a very stressful task.

It takes just too much time, money, and effort. Everybody wants more money from me. At least in trading, you don't see opposite parties in front of your face, but these contractors keep coming back with troubles and ideas.

I, however, have been following markets somewhat. GS, APPL, commodities and markets in general. There are ups and downs everyday. When I first started trading, if I missed anything potential, I felt so bad that I wanted to participate in every market move as if I could have precisely caught everything. But then again as soon as I jump into the very news with my live account, markets did exactly the opposite of what I expected and I ended up losing.

This time at least I don't feel much. For example, I'm a big fan of Apple products. I own multiple products from computer to iPhone. I recommend Mac over PC in a heart beat. Was it Warren Buffet who said 'Invest in something you know'? If I have to pick one product that I know very well, that'd be from Apple. Last year, I traded AAPL quite a bit all to the long side. Unfortunately, I had to close that account because my lumber / nat gas positions were in danger. I think at once, AAPL dropped below $100. While my trading gut kept telling me I should buy at that price, I just chickened out. Anyhow, I missed this Apple's giant move yesterday, and I really felt they are doing really great. However I don't feel much about missing anything because there's always another opportunity.

Speaking of trading gut, I think that is a very important factor to become a successful trader. In theory you should trade by rules, but once you're experienced you know when to jump in. I'm still a wanna be trader, but I've seen good traders trade that way and make 10s-100sK quickly. If you played any kind of sports, and you practiced so much, what you need to do is embedded to your body. You don't have to think too much about everything. In trading, of course without money management, gut-trading will be quite costly.

I plan on coming back to trading with my own trading office at a new house. I'll start with a small account and I will record everything here with even videos. I'm hoping this Summer if not Fall.

TradeStation

Ever since I closed all of my long term trades: nat gas and lumber, I haven't done much other than having so many issues with TradeStation Client services regarding withdrawal.

This is just a lot of BS, so if you have other things to do, please do so. This is more of broker experience / review.

As some of you know TS changed their relationship with RJO Brien, a futures clearing form over the new year day weekend, I waited to request a withdrawal hoping everything is settled.

Tuesday:

I requested a check withdrawal on 1/2. The next day I checked my statement showing the requested amount was deducted correctly. So far so good! However, 2 days later, my phone started ringing showing it's from TS. I didn't answer because last time I requested a large amount, TS kept calling me to see if there's anything wrong etc. I didn't want to get bugged, so I ignored the calls.

But next day, my phone rang two more times while I was away. I was curious, so I called back. TS said the check withdrawal can't be completed because of issues with RJO. TS kindly offered a free (otherwise $25) wire transfer. Great! TS even said if I filled out the wire form by 10AM, I'd receive it in the same day. At this point, since it's treated as if it's a new withdrawal, I wanted to withdraw all of account. I made sure the amount I initially requested as well as what's remaining in my account would be wired. I filled out the form and rushed to the fax machine. Everything looked good.

Wednesday:

Now the disaster starts. I checked my TS statement and obviously the money didn't go out that night. So much for rushing. One day? Fine. I'll wait patiently.

Thursday:

Next day, I called TS and why money didn't go out. They said it'll go out that evening. After I got off the phone, I checked my withdrawal status online and found that only the remaining balance was approved. I called TS again. A rep told me don't worry. It's only showing on our front end program. You'll receive all the money. I trusted this, of course.

Friday:

Not to surprise, on Friday, I only received what was left in my account. On top of that, I was charged $25 for the wire fee. Why $25! Where is the money that was initially deducted for the check request? I called TS and I was able to talk to even a person from Cashiering department. She gave me her name and the money from the cancelled check would go out that day.

Close to 4pm, I suddenly realized that if the canceled money was deposited back to my account, all the money would have been sent find. Obviously whoever processed my wiring request, didn't see (or care about) notes on my account. Chances are it'll happen again, so I decided to have them the canceled amount back to my account asap. Instead of this ideal plan, I got a customer rep saying Cashiering depart is closed, so no one can do that right now. I even tried to talk to her supervisor, but she claims that no one's available, but she assured that the canceled money including the wire fee charged would be sent out today.

I hate when that kind of thing happens on Friday afternoon. There's nothing I can do until Monday morning. It's so annoying. Not to my surprise, on Friday night, I checked my statement, I found that the canceled money was credited back to my account. But there's no sign of wire-transfer. No sign of wire-transfer fee credit.

Monday:

I gave TS a call as soon as they opened. Every time I call TS, I had to explain the same thing over and over again. It was not an exception this time. A rep told me since it was requested on Friday, the wire should go out today. I made sure it better include the fee I was charged.

Of course, when I checked my statement, nothing happened. At this point, I have no plan going back to TS in the future at all. In addition, I'll discourage people to use TS as well.

Tuesday:

I called TS. A mono-tone lady answered a call as if this is some typical call. Instead of explaining the whole thing, I asked her to read my account notes since I had all the reps wrote down the conversation I had with them so far. She gave me an incident #, and again she will verify the transfer and call me.

I told her, 'I'm pretty sure the wire didn't go out and will not go out. Besides, I can't take a word from TS any more. I want the wire feel to be credited right now, send me a check for every penny I have with TS via overnight fedex delivery, of which fee is paid by TradeStation. She said first she'll verify the wire status and initiate a fedex delivery. Either way, she said she'd call.

Of course, no one called me other than one guy from TS asking 'why are you closing your account'. I explained what happened, so he was just reading his manual, 'if you come back... blah, blah, blah...' He didn't care about what caused the issue.

I know exactly what's going to happen. the check will not come tomorrow. It may come Thursday at best. Besides, I'm pretty sure it'll not include the wire fee I was charged. Sure the fee is not much, but it's just so annoying and I want it right.

The story doesn't end here. Maybe TS is not the only one fussing about withdrawal. When I wired money last week, I sent it to ThinkOrSwim. I tried their demo and I liked what I saw. But shortly after, I will probably leave only a portion of the money I wired in, so I initiated an ACH transfer on Friday. The requested amount was deducted right away, I mean , in real time. Since I wired, I thought the money was available asap.

Monday I checked my bank account, there's no sign of ACH from TOS. Tuesday, still no sign. Around lunch time, I receive 2 emails saying it can't be done because since the money is wired in, I have to wait for 10 business days. I got pretty upset because if that's the case why TOS even let me initiate the request. Why did they take the money right away and didn't want to find out what's wrong on that day or even Monday? They 'gladly' postponed my ACH request to 1/25, that is 13 days away while they are keeping my money not making it available. Of course, I called back and I want the money credited back to my account asap. Sucks, but I have no choice but waiting. I'm a software engineer, so it's not hard to write a program when someone wired the money and issue a flag in real time if they're trying to withdraw.

As many of you know, brokers enjoy interest earning from clients deposits. This is from one of former TS salesmen I keep in touch with. I believe that's exactly what TS and TOS are doing by not releasing money easily. It may not be so much, but I bet it'll be quite a bit from dime here dime there.