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Article Archive

Confessions of a Trader: Chapter 1

Posted by Tuesday, February 10, 2009, 07:00PM ET

Read 1542 times

Confessions of a Trader: Chapter 112.31.08
Confessions of a Trader

Chapter 1

I write of my experiences not for glory, ego or profits, but to describe the pain and pleasure in the life of a professional trader.

Most individuals in this world will never know the rush of adrenaline in being a day trader. Upon buying a large block of stock and knowing that every tick up or down in the next couple seconds will dictate a day at work. A day where you may either make more money than 99% of the worlds population or lose more money than 99% of that same population spends per month in bills. To describe the feeling to a non trader is like explaining love to someone who has never experienced it. They will never quite get it. They may nod and smile, but let's face it, they are just humoring you. How do you explain to someone that after a while it is a video game? That losing or making just $5,000 in a day is just another day at the office. I feel like half of them look at me and do not fully grasp that I can actually work for negative dollars. Think about that concept. Traders can go to work and can come home with less than they left the house with. Losses happen. You grow to accept them and move on. In fact, the great traders actually accept it and move on seconds after it happens. Granted, they cut their losses quickly. This enables them to move on to the next trade more easily.

The video game aspect fascinates me. Am I trading real money? God knows if I ever had to take out ten one-hundred dollar bills and hand them to someone it would literally depress me. But here I sit, taking or giving that every other day like it is no big deal. I wish to convey so many lessons, so many rules I have picked up throughout the years. I promise I will. These confessions will tell the tales of profits and losses and tricks of the trade. I intend to take you on a journey from the past to present as I learned how to trade profitably.

I once read about a study on day traders. This study found a commonality between those that were good day traders and those that were classified as psychotics. Years ago I found this amusing. Today perhaps more interesting and plausible. There is something to be said for an individual that can sit behind a computer, massive amounts of data streaming through and study charts, ticks, candlesticks, in order to jump in and out scalping pennies in seconds but making thousands. It is in reality almost comical to think about what a day trader does yet I would not change it for the world. The freedom, the passion the unknown. To never know what will happen tomorrow, whether or not you will make money or lose. To be able to literally trade for the first half hour of the market, hit a few trades dead on and walk away with a weeks pay. To sit all day doing nothing and then in a split second a trade pops up and snooze of a day turns out to be Christmas and New Years all rolled into one. Granted, it goes both ways and trust me when I tell you that I have experienced both. But is it really that crazy of a job? I love a quote from the movie Con Air for that exact reason. Steve Buscemi who plays Garland 'The Marietta Mangler' Greene says...

"What if I told you insane was working fifty hours a week in some office for fifty years at the end of which they tell you to &$#@!! off; ending up in some retirement village hoping to die before suffering the indignity of trying to make it to the toilet on time? Wouldn't you consider that to be insane?"

Sadly, in these woeful economic times this rings with more truth as the automotive industry, financial firms and world lay off people by the tens of thousands.

As I begin Chapter 1, I aim to tell you about some of my experiences along the road to becoming an accomplished trader. First off, let's be honest, the stats are not favorable to someone succeeding as a trader. Something like 5%-10% will make it. The rest will lose their money and go back into the monotony of the common work force. Whether or not you make it as a trader depends on so many variables it is almost impossible to count. These will be covered in depth in the coming weeks.

Trading seemed to have been ingrained in my psyche since I was in grade school. I collected everything I could. Baseball cards, basketball cards, coins. I had price guides for them all and followed the monthly prices like it was a ticker in a news paper.

As a young man I got interested in trading in high school. A classic case of joining the newly formed Investment Club. We played one of those news paper investment games and the seeds were planted. I had no clue what I was doing back then but it was fascinating to watch the markets and “guess” at the direction a stock would move. After joining the investment club, there was not one day I did not pick up the paper and look up and down the quotes page. Eying what went up and down, within months I knew every stock by the symbol in the paper. Someone could throw out two, three or four symbols and I could rattle the name off like it was my own name. I had no clue at the time what a day trader was but I did know whatever I ended up doing, it must involve stocks.

I continued to paper trade using the popular Yahoo! Investment Challenge during school/market hours. Having fun watching my fake $100,000 account as it went up and down each month. I found that even the fake dollars, as my account value increased was intoxicating and addicting. I must have looked suspicious and had this strange intense look on my face because more than once the teachers would check what I was doing, suspecting the website I was looking at so intensely was pornography.

College came quickly, my knowledge of stocks still limited to symbols and the idiotic basics of what the media and financial world made us believe was important in choosing an investment. The late 90s were upon us, my first trading account would be opened and I was about to get a unique phone call from the CEO of a publicly traded large pharmaceutical company...

Chapter 1: Words of Wisdom
No Trader Ever Went Broke Taking A Profit - Never let greed take over. Any profit is a good profit. Do not be afraid of what you will not make, instead be afraid of what you will lose.

By: Anonymous Trader
12-18-08's Chief Market Strategist Calls Financial Collapse in 2007!

Posted by Monday, February 09, 2009, 07:00PM ET

Read 1696 times's Chief Market Strategist Calls Financial Collapse in 2007!'s Chief Market Strategist Nick Santiago Calls The Financial Collapse in a radio interview on August 2007.

With the DOW near 14,000, the bulls on the run, our chief market strategist lost a few friends when he spoke of the issues plaguing the market back in 2007. Speaking specifically about the future of the market, how investors should be in cash .... not banks, sub prime, prime, auto industry, or even money markets. (August 25, 2007)

"Alex, glad to be here. Its, we formed this company earlier this year basically to give the small investor a chance. Because as you see what's going on out there, many, many people were looking at these headlines saying "Dow 14,000" and they had no idea what's about to come..." (Nick Santiago,

"You have a crisis, its not just sub-prime, its also prime, its also these collateralized debt obligations, these derivative products that were created. " (Nick Santiago,

"It doesn't look good for the us dollar. The outlook for the us dollar in the next 3-5 years is not very good, its very grim." (Nick Santiago,

"We do not say pull out of the stock market. We trade both sides of the market. As traders we are neither bull nor bear. We follow the money flow.  If we see the market about to make a move down as we did about a month ago we will alert our subscribers, guys lets get short this market lets play it to the downside and we all made a lot of money...." (Nick Santiago,

"Look at Country Wide Financial, look at Citi Bank these companies have big, big liabilities on their hands and I believe they are in a lot more trouble then is being led on to the public." (Nick Santiago,

"Right now I believe that most people should be basically in cash, trading very very lightly. Foreign assets is probably a better play the American assets at this time. I believe even that, you may have to be very careful because this is a global economy now. You've been hearing that story for quite a long time. Many of these markets are very very extended. Gold has out paced the Dow, gold is up 300 percent since basically 2003. So if that is not telling us something I don't know what is? I believe gold might fall a little more but you may want to get a hold and buy some gold if you see gold dipping here." (Nick Santiago,

"At this point I don't like anything in the market accept being in cash." (Nick Santiago,

"Even Money Markets are not even safe these days." (Nick Santiago,

"Look at our US car market, Japanese cars are kicking the butts of the American cars and frankly they make a better product..." (Nick Santiago,

"This country is very very leveraged we have a huge trade gap deficit with china..." (Nick Santiago,

Nick Santiago, (August 25, 2007) ( 33:40)








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