We have a pretty unique situation which up until this point, I’m not sure we’ve encountered. I’m always up for a new experience and you better be too! Shawn is back with us again (chat room alias “Dimliwitti”) to update us on what has been going on in life and in trading. I mention “life” because this plays a role in his current situation. Not a bad situation by any stretch, but he decided to “pay himself” handsomely out of his trading account which has reduced him down to a smaller account than what he is used to trading with. How has this impacted him? What are the things he has discovered about a smaller account? What is his plan of attack? We cover this and much more.
Notes:
Today we reinterview community member Dimliwitti who has been featured in podcasts, articles and webinars. After a review of what we talked about on his last podcast, we see how he has been doing since.
Dim has found a true comfort with his brokerage and that is instrumental in preventing errors with your order entries/exits. While we don’t generally recommend some of these bigger brokerages since they charge more than others, with more competitive pricing it is pretty on-par in terms of cost.
He decided to reduce his account size to keep his risk in check. This led to drastic changes in his trading because he had essentially reduced his account size by almost 90%. He had to focus on some lower priced stocks to keep his risk at a comfortable level. This definitely led to adjustments in terms of his choices on what to trade.
Dim uses what we call the ‘fourth dimension’ where he uses some fundamental analysis in his top down analysis. While he looks at it, the time frame he ultimately chooses to trade will dictate how much weight he places behind that. On longer term swing trades, this information plays a key role. On shorter day trades, the chart will dictate the overall short term trend.
Considering Dim trades full time for income, he treats this like a business in many different ways. One way is a performance review. While we believe profit targets are a dangerous game, he’s looking at his performance averaged over weeks and months. He uses these metrics to make sure that this business is worth his time and it has been quite fruitful so far over the past 2 years.
Quotes:
I had some huge losses before I got educated. But after education, things really turned around and I had some major wins.
When you have a large account and subtract a zero from it, suddenly it’s not a very big account. Zeros matter.
The biggest frustration for me was the sizes and the limitations of it. Kudos to folks who start with next to nothing and build it up.
I’m looking at price and volume. If there is volatility in there, I’m really attracted to those.
The frustration creeps in and you break rules. What happens when you break rules? You suffer the consequences.
I did an analysis and found that my best hours were between 9:30 and 10:30. So lately, I just kind of disappear after 11AM.
