I have taken about 1600 trades so far in 2009, which averages 160 or 80 round trip trades, per month. Back in 2007, I averaged 40-50 round trip trades per day. Yeah that is right because I was a scalper, whose average holding time was around 2-3 minutes. For some super scalpers, 100 round trip trades per day is not considered over trading. For others that like to milk every bit out of a position, 5 trades per day might be over trading. Therefore, we perhaps can not use that as a criterion to see if one is over trading or under trading. The number of trades a person takes might very well be just a matter of different trading styles.
My current trading style is like a holder or a “day investor”, who intends to hold onto a winner for as long as humanly possible. This strategy has been working nicely so far this year. However, I do under trade. Here is why. I have 75k sitting in my account. And TradeStation gives me 4 times leverage for day trading, which is 300k daily purchasing power. However, I have a hard time utilizing my 75k buying power to the fullest extent, not to mention the leverage. If you have been with me for a while, you know that I rarely have more than 30k worth positions open at one time. For example, I took one long trade in AIG in the morning today, which was worth about 7000 dollars. That was the only trade in the morning. Then there was another long trade in PNC in the afternoon, which was worth only 10000 dollars. After I closed my PNC trade, I took 2 shorts together, one SLG and one IOC, whose combined position size was slightly over 10000 dollars. It looks as if I only needed 30000 trading capital. Ha-ha, talking about under trading. And this is it.
Some friends asked me if I could trade their accounts. Now you see what problems I have with trading others money. I can not even take full advantage of my own capital. Anyway, here are 2 of the trades I took. I will spare you the 2 shorts which were basically flat.
2 pictures are worth 2 thousands words. I do not know what to explain. After so many trades, trading has become a subconscious activity for me. If you have questions, feel free to ask in the comment section.
Click on the image to have a better view
AIG
PNC
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