Some very interesting comments..

Recently I asked a senior of mine from undergrad school, who now works in the finance industry for some comments. He writes and I quote:

"
After looking at your weblog, this is what I think:

- Making notes of your daily trades and keeping records of the reasons why you entered into those trades is a really great habit. It will definitely help you in the long run. Keep on doing this even when the number of securities in your portfolio increases significantly.

- I liked the fact that most of the time, you support your technicalanalysis with some fundamental analysis about the company and overall macroeconomic analysis. keep on doing that. sometimes technical and fundamental indicators will show you different results. never get into a trade where the two indicators dont agree. in other words, dont try to give yourself a fundamental reason based on what the technical indicators are saying.

- Are you maintaining a P&L sheet also? Make sure that you maintain a record of P&L of every trade and keep a record of the txn cost also. Try to mark-to-market on a fortnightly or monthly basis. I notice that almost 80% of your trades are individual equity trades. Based on my experience, a typical individual investor pays a whole lot of money in txn costs. I'd encourage you to do your P&L from day 1 when you started trading and then see how much did you pay in txn cost.

- One important thing that I notice is that most of your investments are in equities or equity derivatives. Do you invest in other asset classes like bonds, mutual funds, index funds etc too? One should also take care of asset allocation (dividing up the portfolio into various asset classes) before doing individual security selection. In the present environment, a lot of people are getting into non-equity investments.

- I noticed that you wanted to get into currency trading and were looking for some sites. I haven't done short term currency trading but heard that oanda.com provides that. check that out.

- check out tradesports.com and hedgestreet.com. These two sites give you option to trade on certain macroeconomic trends like housing prices, fed futures rates etc.

- One suggestion is to look at index funds from firms like Barclays Global (ishares.com) or state street. They can give you an exposure to foreign markets, currencies, commodities etc. Even for US equities, its sometime better to invest in a whole sector/industry rather than investing in
individual stocks. index funds can give you that flexibility.

- most of the trades that you are doing are short term trades. try looking into some longer term trades too e.g. somebody who bought an index fund following Russell 2k at the start of this year might have made around 15% on their investment. Compare that with the net returns that you are making in short term trades and see which one is better for you.

- nearly all of your trades are expecting that a particular security will either go up or down. have you looked at the various option strategies (e.g.strangle, straddle etc)? They can help you make money even in flat markets.

you must have noticed that i am not giving you fundaes on your individual trades but more on your overall portfolio. The reason is bcoz most of the investors forget about the overall return picture and get too carried away with their individual trades. always keep an eye on what your portfolio is making after paying all the costs. thats what matters in the end and not the number of correct bets that you had.
"