Submitted February 26, 2003, 1:55 PM
During what years were you an active day trader?
November 1998 - June 1999
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How developed were your computer skills before you day traded? What software did you use to trade? Did day trading affect your use of computers for things other than personal finance?
I was fairly sophisticated with computers: proficient with most Microsoft applications, extensive financial modeling skills, knowledge of basic programming and web publishing. For my daily trading I used software based on RealTick platform that was further customized by my broker. Day trading did not significantly affect my use of PC. Although, since I was on-line for prolonged periods of time, I would read more news, compose more e-mails, and browse more web.
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What was your employment status before, and during the time you day traded?
When I began trading I was unemployed, but took a part time job later on in my trading career.
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Did you day trade at work, at home, or in a trading office? How many hours a day did you trade?
I traded mostly from home while financial markets were open. I did prep work about an hour before the opening bell. I also spent a significant amount of time analyzing charts and screening companies after markets had closed. Occasionally, I would travel to see my friends. In those instances I took my PC (not laptop) with me, ready to be connected to the internet from wherever I had access to the web.
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Where did you access information for your day trading? Online or offline? From chat groups, message boards, websites, or other sources?
My trading was mostly based on technical analysis. I read a number of books on how to analyze markets and identify profitable trades. I used technical tools available through the trading software to find securities that met my criteria. I also signed up for an on-line day trading course, which taught certain trading techniques that extended beyond pure technical analysis. Most trading rules anticipated to predict investor behavior and were designed to profit from inefficiencies of "crowd mentality". Such techniques were based on news events such as earnings and dividend announcements, stock splits, insider activity and other important stock-moving information. I received news in real time through my trading software (additional subscription required). At no time did I trade based on fundamental analysis, which is the traditional approach to long-term investing.
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What has been the result of your day trading? Were you financially successful? How has trading affected your professional and personal life? What are your thoughts about your experience?
My early trading results were catastrophic. I took large risks and had minimal protection. Often, I took overnight positions in highly volatile stocks. Eventually, I developed several strategies that limited not only my financial exposure but also the profit potential. Yet, the ratio of positive money making trades improved substantially. Unfortunately, by then, my trading capital had become relatively small and profits were insufficient to cover substantial commissions and various access fees (for NASDAQ Level II quotation system). As a result, I ceased to trade as a day trader. It has taken me years to earn back what I had lost trading. Please note that my original trading capital was FAF (friends-and-family) loan. Somehow I doubt that my trading experience improved their perception of my financial aptitude, although many of them realize that day trading could be a misleading phenomenon. It reminds me of a casino where the "house" always wins. In this case, the "house" represents the brokerage firms that collect trading commissions. Other than that, the money is simply transferred from one group of traders to a different group. I have realized that my chances of winning in this game are not in my favor, especially considering that I'm competing with professional traders who do this for a living. Any other amateur day trader who thinks differently must have a fairly large ego, or knows something that the rest of the market doesn't. Overall, great learning experience with many take-aways. I wish it were less costly...
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What is the highest level of education you have completed? (optional - will not be posted on the web)
Graduate Degree in Business with concentration in Finance
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