Episode 119 -- @TAGRtrades (60:51)

"Alex"
Interested in trading in college, age 19 or 20
Waiting tables, summer job
Opened e*trade account with 2 or 3K savings
Dad suggested ag stocks
Retired Dad has CNBC on all the time
Grew up with Jim Cramer shouting on TV in background
Never thought about being a trader
Sounds like a Southerner, Texas maybe?
Worked in software
Used Yahoo Finance for research
Serious beginner's luck, made 20-30% on first trades
Solar stocks going nuts
Read message boards
Earthy guy all behind this solar thing
Put all his money in one small solar stock [doesn't say symbol]
Hands shaking, up 20K in one day
Frozen excited and scared
Told his wife he was quitting his job and going full time
Went 8 for 10 when he didn't know what he was doing
25 years old, had some savings, wife had nanny job, no downside
We're going to get rich quickly!
Selling parents and in-laws on day trading much harder
Plowed through dozens of trading books
Had a written trading plan from the start
Quickly realized he didn't know what he was doing
Google search: how to make money in small caps
He did have security of being able to go back to software job, but never has
Spent thousands on alert services, chat rooms, DVDs
Learned horrible habits: averaging down
Red months for first six months
Green months ever since (not huge green but green)
Wife working, one check coming in, cut expenses way down
No steak and champagne dinners with the occasional winner [or cigars]
He did have a dollar figure in mind where he'd quit
Tried trading options or futures -- whole 'nother world
Tried to short, didn't suit his personality
Learning experiences of what not to do
Talks a lot about trading with his wife [she must be an angel]
He didn't know what he didn't know, just made the leap
Wouldn't want his kids to trade -- the work is just too hard
Risked 2% in early trades, so he never blew up
Never once traded on margin, so he never blew up
You never hear from loser traders once they blow up, they disappear
First two years, profit curve: big spikes, big drops
Averaging down is still his biggest fault
Took a year to figure out averaging down is terrible thing to do
Good, knowledgeable chat guys are really helpful [but rare]
Nobody cares about how you manage a trade, or control your emotions
Track your progress, "journaling"
Must figure out what works for *you*
Get into the hot sector, you have a bid under you [a tailwind]
Chat with Traders podcasts were super useful to him
Constantly trying to evolve
Looks for specific set-ups, at specific times of day
3-4 stocks in play
Plays small cap garbage stocks that will eventually do an offering
Been trading for four years but considers himself new
Chart set-ups that work intraday also work on longer time frames
"Grade A" setup -- something going bananas, looks for sector sympathy plays
Scales in and scales out
Gotten good at controlling his emotions, seeing chart clearly
Favors longs over shorts due to his personality
Doesn't want 11 good years of trading, and then blow out with one trade
What if your computer turns off and you're in over your head?
Used to play off scanners or people's trade alerts, no more
Comes in with 3-4 stocks each day, sets stop levels where trade no longer makes sense
He will put a third of his account in a single trade
Knows where he's going to get out
Takes starter positions then builds position
Tries to go home green every day
Hard to let winners run, psychologically hard *not* to take profits
First trade is smallest then larger then larger, as soon as it works take part off
Size is based on your confidence
Spends $1000+ a month on scanners and charts
Microsoft OneNote for trading journal + Excel spreadsheet
Time consuming to enter each trade but worth it
Works from home, just talks to himself all day [thus wife's suggestion to join Twitter]
Final notes at end of day
EdgeWonk, enters detailed information, time of day -- useful tool -- coupon code "traders"
Can find one or two trades a day
Wants to slowly increase his size
Still has never traded with margin
Does zero swing or position trading
Journal tells him that he shouldn't trade stocks under a dollar
Figure out what you're comfortable doing, must fit your personality
Can't fit in somebody else's mold
Just grind, no margin
www.tagrtrades.com
Twitter: @TAGRtrades