Tools of the 'Trade' – How I Invest (2015 Edition) – Stock Trading To Go
The new year has arrived and with it comes another edition of Tools of the Trade. This is the fifth edition (see 2014, 2013, 2012, 2011).
2014 was a great year for StockTradingToGo and our parent company Reink Media which owns and operates multiple financial sites: StockBrokers.com, StockTradingToGo.com, InvestingTeacher.com, and most recently Ticker.tv which is a free broadcasting network for traders and investors.
As far as StockTradingToGo is concerned, there were two big stories in 2014. The first was the launch of the STTG Trade Log v2.0. The other was the acquisition of StockTrader.com which will be the new home for STTG come Spring time.
Trading Results
On my Ticker.tv channel StockJunkie, one of the recent broadcasts I had went over my full 2014 portfolios results. Watch the video.
My full-time job is running our portfolio of websites. As a result, I only trade when I have free time.
To keep stress low and trading a casual affair, I purposely keep my personal trading portfolio small, usually around $50,000. By the end of 2014 after multiple miscellaneous deposits and withdrawals, my year end average balance allocated to trading was $60,000. This is the number I use to calculate my performance returns against the S&P 500 below.
Below are my actual portfolio returns for 2014 from the StockTradingToGo Trade Log. Commissions are not factored in. Specifically, this is because I am purposely trading a much smaller portfolio and my current goal is accruing experience. That said, if you did factor in commissions for 2014, I would have been flat on the year. I also break this down in my results video.
Computer Setup
Back in October 2012 I worked with iBuyPower to build the ultimate budget trading computer. Every time I see one of the trading computer sites advertising $2,000 – $3,000+ rigs that can be built for under $1,500 it bothers me. Such a waste of money.
Below are my current PC specs. I run a nearly identical setup at home, same six monitors, monitor stand, etc for redundancy purposes. In the latter half of 2014 I upgraded my desk to an Uplift Desk and absolutely love it. The health benefits of standing versus sitting are vast, and I now stand around 75% of the day.
PC Specs – Six ASUS 24″ LED Monitors running off iBuyPower Professional Series P300 rig with an Intel Core i7-3770 Processor (today I’d go with atleast a Haswell 4th gen Intel Core i7), 16 GB high performance memory, 2 AMD Radeon HD 7770 video cards, and a 120 GB ADATA S510 SSD Hard Drive.
Online Brokers
Because I head research at our sister site StockBrokers.com, I have money spread across over a dozen online brokers. While there are a lot of great online brokers out there, finding the right one depends on your specific needs as an investor.
In 2014 I traded predominately through TD Ameritrade, OptionsHouse, and Interactive Brokers.
If you are looking for a new broker or are considering a switch, I welcome you to read my online broker guide here on the site, or better yet use the best broker lists and comparison tool on StockBrokers.com.
Investment Sites, Services, Subscriptions
I use a variety of different services to help me research and monitor the market. Once again thanks to Ticker.tv, I streamed a broadcast going over all the below services, sites, subscriptions, and how I use them. Watch the video.
The below services and subscriptions are a part of my daily routine. It should be noted that some of these services are provided for me at no cost since we occasionally use the research in our daily market recaps.
StockTradingToGo Trade Log – $10 per month – Inspired by my new found passion for post trade analysis alongside a goal to bring my personal excel trade log to the web, the StockTradingToGo Trade Log was born. This is where I log all my trades, notes, chart images, and analyze performance.
ChartPattern.com – $125 per month – ChartPattern.com is home to Dan Zanger (read my full Dan Zanger review) who is the world record holder for the largest portfolio return in one year. His claim to fame is turning $11,000 into $42 million during the late 90s. Dan sends out a nightly newsletter several times a week with technical analysis and personal notes. He also has a chat room for subscribers. Overall if you enjoy our easy to read charts, you’ll really like Dan’s newsletter.
MarketSmith – MarketSmith ($999 per year) + Pattern Recognition add on ($14.95 p/m) – MarketSmith is a browser based charting software provider powered by Investors.com CANSLIM data. Besides the easy to read charts and auto pattern recognition, the real value drivers are the IBD metrics that display with each chart.
MarketSmith ScreenshotBespoke Investment Research – $365 per year up to $2,500 per year – Bespoke Premium offers a slew of research via newsletters, research reports, data, and the like. Three tiers of paid service are offered; I use Bespoke Premium ($750 per year). Daily newsletters range from trades of the day to market summaries and ETF reports. Research reports cover anything and everything, leveraging historical data to help breakdown the noise of the market and bring clarity. The Bespoke blog is a good feeler for the content provided to paid subscribers.
Evernote.com – Free – I am a huge Evernote fan. Evernote is a service for journaling and note taking. You download the software to your computer and it syncs with the web so you can view your notes on any device, at any time. My “Stock Research” notebook within evernote has 296 entries as of this post and has been a critical part of my growth as a trader.
Briefing.com – Subscriptions start at $50 per month – Briefing.com (read my full Briefing.com review) is a 24/7 research service that monitors the markets, social sphere, and beyond to deliver real-time news and a slew of research reports. I started using Briefing.com earlier in 2014 and I now can’t operate without it.
StockCharts.com – Free and paid (basic package $14.95 p/m) – StockCharts.com is the site we use to produce all the stock charts for the nightly market recaps here on StockTradingToGo. The primary reason we have the basic package is so we can have access to more than three years of chart data and save chart layouts. The free version is the exact same as any paid package less a handful of features.
TradingView.com – Free and paid – TradingView is another web based charting software. What I like is the flexibility of the charts since they are HTML5 driven and the overall ease of use. I disable the community ideas to clear the clutter and stick to clean charts (see also my post on the best free stock chart websites).
FINVIZ Stock Screener – Free – FINVIZ’s stock screener is the best free stock screener available on the web. Period.
Investment Philosophy
I am a CANSLIM investor at heart and have learned to respect both fundamental and technical analysis. I rely on my own passion for technical analysis to drive my trading and leave the fundamental research to the Marketsmith / Will O’Neil (IBD) and Briefing.com teams.
The first strategy I employ is focused on CANSLIM entirely. This means going long when the market is moving up and buying the absolute best stocks (fundamentally and technically), adding to positions as they prove themselves correct. Buys come off breakouts from chart patterns like the Cup & Handle. With biotechs being such a hot industry group in 2013 and 2014, this is where a lot of my focus has been.
My second strategy is centered around day trading monster movers. These are stocks that post massive news and gap higher 20%, 30%, 40%, or more and trade with massive volume and volatility. Small companies and small floats can lead to big winners and some wild short squeezes. If you aren’t careful you’ll get smoked; however, money can be made if you know what you are doing.
When I am investing, I always use stop losses and typically shoot for a profit to loss ratio of 1:3. This means I can be wrong three times in a row, have one winner, and still be profitable.
Closing Thoughts
I see investing as a life long game. Every trade is another lesson to be learned and even though I have over a decade of “experience”, I am still learning from each and every one.
So that’s that. Please feel free to share your thoughts and email me. I’d love to hear from you. Stay frosty (sharp) out there and I hope 2015 brings all of your portfolios great success.
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Tools of the 'Trade' – How I Invest (2015 Edition) – Stock Trading To Go
