*I also made an Introduction YouTube video
I decided to write this blog to provide a trade diary so I can review my mutual fund trades for my 401K and Roth accounts. I also wanted to educate others like my younger self about trading and market behavior. When I started to investigate trading, I read all the books from William O'Neal of Investor Business Daily, Nicholas Darvas, etc and subscribed to trading services like Dan Zanger. I traded stocks, options, wrote covered call options (basically renting out stocks), and traded mutual funds. Over last two decades, I slowly changed my focus to building wealth with my 401K and Roth portfolios rather than try to generate income like a job. This philosophy has simplified and optimized my trading based on my own risk tolerance, lack of time, and the need not to continuously monitor The Market. As I blog my trades, I will try to write in plain language. However, I will not explain fundamental trading terms and concepts like how to read candlesticks, chart patterns, and their merits. There are a lot of info on the web to familiarize the readers.
"I have made many trading mistakes in the past and will make new mistakes in the future."
The main reasons I traded mutual funds for my retirement accounts instead of holding them until my retirement are the infrequent market crashes and opportunity cost. The first reason will be evident to you if you review the lower chart. There was no market gain over 12.5 years from September 1996 to March 2009. Yes, there were significant gains before and after this period. If someone traded market based on chart patterns and behaviors, they would profited from this period. No, they would not have sold at the top or reenter at the bottom. But, they would have profited with the rebound noted in green arrows.
Trading based on chart patterns and behaviors definitely have its drawbacks as traders overtrade or inherent difficulties in volatile markets. It is not my intention to convince anyone the merit of trading based on chart patterns. This is simply my reason and strategy to fund my retirement. Lastly, if you can generate an annual return of 14.1%, you can double your account in 5 years. For 2016 year, my return is 9.6%
Above chart is my progress vs S&P500. The advantage of my trading strategy is the stability during market correction. I will exit all mutual funds if market condition is not favorable.
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