Jul 29

Portfolio building for a full time trader

full time traderThere is no secret that I traded only a few counters as demonstrated from the trading logs I’ve posted so far. Being a full time trader, one should have his/her favourite set of stock portfolios for trading purpose.

For me, I started building my sets of portfolio during my early trading days when I was playing earnings announcements. Back then, there used to be a free stock screener tool, MSN Money Deluxe Stock Screener (now discontinued), that I often used during earnings announcement play. I would set the parameters in the stock screener and then have the counters who would be announcing their earnings keyed into the screener to validate their current ratings and signals. It was a useful tool but it has now discontinued and I have yet to find a good replacement for that MSN Money Deluxe Stock Screener. Sigh…

Anyway, it was that earnings play and that stock screener that I learnt about the stocks, their brands, their products, their operations, their financials, their stock price movement behaviours  and started building my favourite stock counters. Fast forward today, I use these sets of portfolio for my day trading purpose.  As a day trader, I am looking for counters that swing a lot during an active market, counters that have long candles (doesn’t matter if they were greens or reds), counters that are volatile.

I traded a lot on AAPL on my IB trades. AAPL has big intraday price movements, suitable for my IB trading style. For IB trades, the sooner I close the trades, the better. I once held a trade for less than a minute and closed it to make a profit USD300. The chart signals were all aligned and spot on.

For this past month, I tested the binary options trading using EZTrader platform. In my opinion, the trading method is totally different from my IB trading style. In IB, I look for stocks that are volatile with big day swings. I applied that trading system to binary option trading, I made quite a number of losing trades. I took a step back and reassessed my mistakes. For this binary options trading, I looked for pre-market market conditions that are not volatile, and movement consistently in one direction that is predictable from my charting parameters. NDX Futures fits that criteria and the index is something familiar, known to me (compared to currency pairs and commodities). If you have read my previous posts, almost 95% of my binary options trades are traded on NASDAQ 100 Futures.

Building up your portfolio takes time. One might need to consider his/her trading style and system for picking up counters to be listed in his/her favourite portfolio. As for me as a day trader, I would not care so much on the size and diversity of the set of portfolio I picked, I am not investing long-term anyway. As long as my portfolio is making money and can be used continuously to make money, even if it was just a one counter portfolio, it is good enough for me. In my mother tongue language, there is a saying, it doesn’t matter if your cat is black or white, the cat that catches the mouse is a good cat. Cheers!

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