As a way of background, you may or may not know that around feb of 2005, I decided to learn more about the stock market and get actively involved. After a couple of not inexpensive seminars (max attended one of them) and reading a couple of books, in may of 2005 I decided to concentrate in only trading options. As a result I began to study the ins, out, wherefores, etc and after acquiring and ingesting dozens of books more on the subject (and NOT too insignificantly LOSING about 25k or more), on 10/5/2006 I finally started settling down with a system I'd written that utilizes both microsoft sql server and excel, intensively.

There was an immediate improvement with my trading results so that I ended the 4q06 with a respectable profit and managed to whittle my entire 2006 results to a more decent (but still, alas) a loss. Mind you, my system is not perfected by any means and, I still tweak and otherwise modify it frequently, at least it now gives me a dashboard, so to speak, with which I can better control and learn from my trading decisions as I continue along into 2007. but always keep in mind that NO system, mine or those of the billionaire hedge funds, can ever guarantee wins! All I am trying to do is to beat the overall market (the S & P 500 index in my case) on an ongoing basis. That's how the managers of mutual funds, hedge funds, and other financial managers are usually rated. And, incredibly enough, the stats I've read and heard about from many different sources say that 90% of the managers FAIL to beat the sp500 by year end. This means that all the expense loads you pay to these managers are for the most part wasted because they can't even beat what you could have gotten by investing your money in a SPY (the symbol for the s & p 500 index Exchange Traded Fund). And the internal load for SPY runs, I believe, less than 0.25%. That's less than a quarter of one percent for those of you who can trace their lineage back to an ancestor called nancy.

Why I'm excited about my system is that for the last quarter in 2006, that my system was utilized I beat the sp500 results by 30%. If a manager can BEAT the sp500 by 10% he's usually considered to be worth his weight in gold. But at 30% he's usually given awards and medals, not to mention the multi-million dollar year end bonuses that wall street is so famous for. Waal I'm not in the super-star status, yet, so no medal for me. I need to sustain a winning streak for at least a full year, if not more. But at least now I have something to shoot for. But as I said, no system can be considered fool-proof. Markets can, and have, gone down. But even in a down market, when the day (or year in this case) was done, the successful managers lost less (or even made a small profit) than the sp500. and there are still so many more ideas that I have for incorporating into my current system.

Anyhow, for the last couple of weeks, I've been sending reports to max, along with a little of my trading philosophy for three reasons:

1) I'm hoping that a little of my enthusiasm for trading for a living rubs off on him,
2) it helps me in that I am forced to reduce to writing a journal, as it were, outlining my reasons for doing what I did, reviewing my fortunate decisions as well as my mistakes. The latter assists me in taking steps to try to prevent these mistakes in the future. A little more on this shortly.

3) if I'm at all successful, I will have the basis to commercialize my system through semnars, webinars, articles and books. Before I consider this item, I need to see at least a modicum of success for 2007.

Now let's talk about my mistakes. Going into the new year, I had about 15% of my portfolio invested in two commodities: oil and copper. They tanked in the last two market sessions. That's usually good for the market (and consumers) in the short run but it played some havoc with my scores. Because of my system AND the reports I'd been sending max, I was immediately able to spot why I lost as much as I did on them and tweaked my system so that in the future, WHEN (not if) similar circumstances involving other picks I may have made happen, I will be able to bail out almost immediately, AUTOMATICALLY thereby minimizing any losses that my portfolio may have suffered. I might also add, that a good deal of the $25k I lost in my first year and a half were due to mistakes AND not getting out as quickly as I did with the oil and copper positions I held. This means that I lost an extra $500 or so this time, when in the past I lost anywhere from $1k to $4k on similar situations. My new tweaks, I'm hoping, will cut the "extra $500" down even more.

So here's what I propose: I'm going to send each of you my daily updates, same as I do for max. again, I'm doing it for the same three reasons I enumerated above. I encourage you to ask me questions or discuss what you see with each other. It would be nice if I were kept in the loop as it would help me as well. Note that at no time have I asked you to turn your funds over to me for management. I'm a long way off from that. It's one thing for me to lose MY money. I don't want the responsibility of losing other people's money, expecially those of whom I love. So I have no other motive than what I've told you. I think it'd be really great if one, or all of you, became infected with my enthusiasm so I could pass along my system to him/her.

I can't begin to tell you the independence one garners when one can trade and make a living at it. This means that he/she does not have to put up with clients, vendors, employees, landlords, etc. A successful trader can live anywhere in the world where there's broadband internet; can set his/her own hours (my active trading takes about an hour's prep before market open and trading activity during the first and last hours that the new york stock exchanges are open. A total of three hours per day on the computer, max. of course I spend many more daily hours reading and puttering with my system, but that's fun for me. I would be always reading something and puttering with something even if the subject weren't trading.

Anyhow, nuff for now. I'll begin sending you daily reports a la max as of today. If you don't want them, let me know. You're not going to hurt my feelings. As irs dehassler was my passion for almost 40 years, so trading for a living is my passion now. You've got different passions and I respect them.