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Tools of the ‘Trade’ – How I Invest (2018 Edition)

Courtesy of Blain.

Each year I do a deep dive post into my trading results and the trading tools I use. See: 2017, 2016, 2015.

Before we get to the results, here’s a quick summary of what’s happened here at StockTrader.com over the past year.

StockTrader.com Year in Review

Our free weekly market recaps published on Sundays, written by staff writer Mark Hanna, wrapped up the year with 22,325 subscribers. If you are not signed up yet, you can do using the form on the sidebar on any page.

Recaps aside, the Trade Journal continues to be an excellent free tool for analyzing completed trades. In 2017 we updated the tool to v3.0, which included a variety of updates, the largest being a brand new design that is 100% mobile friendly. No annoying ads either, this tool is seriously free-to-use.

Trade Journal users log thousands of stock trades each month. Our audacious goal for 2018 is to upgrade Trade Journal to track options, futures, forex, and crypto as well. See: The 3 Phases of Trade Analysis & The Big Secret Few Know.

Last but not least, site traffic had another strong year as we wrapped up 2017 with 2,337,723 visits from 1,761,123 unique visitors, totaling 3,671,611 pageviews. Awesome.

Trading Computer Setup

I always start this section by reminding readers, do NOT get suckered into paying several thousand dollars for a trading computer from a day trading / professional trading website you’ve never heard of!

You will be ripped off.

Instead, you can spend around $1000, or less (building your own rig works, too), and buy a fine desktop that supports, at the least, dual monitors. Most mid-tier gaming rigs work great for trading because they have a dedicated graphics card. Here’s a pre-filtered list on Amazon.com.

My trading station setup at work and home are identical. Same UpLift standing desk, similar spec machines, same monitor stand, same monitors, mice, keyboard, etc. This makes it seamless if I ever trade from home or a part breaks. While my desktops are a bit older, built back in late 2012, they still get the job done just fine. Also note, I fully embrace the health benefits of standing during the day and currently stand around 80% of the day.

PC Specs (rig originally built in 2012) – Six ASUS 24″ LED Monitors, Intel Core i7-3770 Processor, 8 GB Corsair Vengeance DDR3 1600 MHz memory, 2 AMD Radeon HD 7770 video cards, and a 120 GB ADATA S510 SSD Hard Drive.

trading-station-021017

My Portfolio Holdings

My day job is running our portfolio of websites including StockTrader.com as well as StockBrokers.com, ForexBrokers.com, and newest addition investor.com. Because of this, I trade only when I have free time.

More specifically, trading is strictly a passion and hobby. I do not trade for a living anymore. My retirement savings are 100% passively invested in the S&P 500 alongside a target date fund in my 401k. See: How to Build a Warren Buffett Portfolio.

For my taxable (non-retirement) portfolio, I was 100 / 0 (100% equities, 0% fixed income) for the first half of the year, but as the year progressed and the market climbed higher, I started reducing risk. Currently, I trade primarily with Fidelity and Vanguard. Just last month I locked in more profits and moved to a formal 60/40 portfolio, playing defensive as recently recommended by Howard Marks in his latest memo and Vanguard’s 2018 market outlook report. Here’s a current screenshot of my taxable portfolio allocation from my Personal Capital account,

Primary holdings:

Given my age, my personal (taxable) portfolio being 60/40 is, arguably, overly conservative. My outlook for the market in 2018 is to play defensive, thus less market exposure. Also, given the vast majority of my wealth is tied to our company, I could easily be 50/50 or even 40/60 and still not offset the significant risk of running an online media company. Bottom line, your situation may be completely unique from the next person.  For myself, I enjoy managing my portfolio and navigating the markets.

Taxable portfolios aside, I always remind young investors your retirement investments (IRA, 401k) should be invested according to your age and not touched. My retirement is somewhere around ~98/2, thus long ~98% equities (mostly via the Vanguard S&P 500). Betterment and Wealthfront are two great robo-advisors for young investors to consider if they want to passively index for the long haul. For investors who use an advisory firm, I recommend looking up their Trust Score on investor.com. Here’s the profile for Fisher Investments,

After placing my first trade at age 14, I did try full-time trading when I was 19, however, despite some success, it ultimately ended in failure. My portfolio size was too small, and even with an impressive win streak, one bad trade nearly wiped me out. Now that I am 31 and have 17 years of market “wisdom” under my belt, and I’ve learned numerous valuable lessons. See: 10 Trading Secrets I Wish I Knew When I Got Started.

Trading Results

Following Jack Bogel’s, “funny money” principles, I allocate less than 10% of my taxable portfolio to “speculating”, i.e., trading. I ended 2017 with a realized portfolio return of +$49.98, trading with an average position size of just $7,300. Wild stuff. I did not have any commission spend for 2017 thanks to taking advantage of a free trades offer at Fidelity (read my Fidelity review on StockBrokers.com). Like thousands of other users here on the site, I manually enter my trades using the free StockTrader.com Trade Journal.

For those that read this post each year, you will quickly notice how little I traded last year; this was one of my big, multi-year goals. TRADE LESS. In 2014, I made a whopping 443 round trips. In 2015 I cut that number down to 45, 2016 I had 15 trades, and now in 2017, I set a personal best of only seven trades.

Cutting back on trade frequency was no easy task for me. For years I struggled with over-trading which not only leads to expensive mistakes but hefty commission charges as well. Here’s a summary of my 2017 trades,

The best success I’ve had, to date, has been trading stocks that see extreme volatility after significant news breaks. If you look closely at the above trades, my best trades resulted from just this. I shorted Shopify (SHOP) for a quick profit after Citron tweeted and released a cautious video on Shopify, calling for FTC to investigate. After the Equifax (EFX) hack was revealed and the stock tanked, I bought shares and rode the rebound back higher for a nice profit. My largest loser was Apple (AAPL) when I made the dumb decision to short the stock heading into earnings. A gamble I lost and an example of how I broke my own rules. Discipline is tough to master.

Looking at 2018, I am going to continue to designate a small portion of my capital to speculate in the stock market. Each trade I accumulate more experience; the life-long journey to market mastery continues.

Investment Sites, Services, Subscriptions

The below services and subscriptions are part of my investment routine. It should be noted that several of these services are provided for me at no cost since we occasionally include research from the products in our market recaps. That said, I use all of these services.

  • Trade Journal – Free – Inspired by my passion for post-trade analysis alongside a goal to bring my personal excel trade log to the web, the StockTrader.com Trade Journal was born. This is where I log all my trades, notes, chart images, and analyze performance.
  • Evernote.com – Free – I love Evernote. Evernote is a journaling and note-taking app. My “Stock Research” notebook within Evernote currently has over 350 entries. Journaling has been a critical part of my growth as a trader and overall human being.
  • Briefing.com – Subscriptions start at $50 per month – Briefing.com (read my full Briefing.com review) is a 24/7 research service that monitors the markets, social sphere, and beyond to deliver real-time news and a slew of research reports. I started using Briefing.com in 2014 and have loved the service since.
  • Bespoke Investment Research – ~$400 per year up to ~$2,000 per year –  Bespoke Premium produces institutional market research reports. If you want to make sense of historical data to help break down the noise of the market and bring clarity, then Bespoke will serve you well. The Bespoke blog is a good feeler for the content provided to paid subscribers.
  • StockCharts.com – Free and paid (basic package $14.95 p/m) – StockCharts.com is the site we use to produce all the stock charts for the weekly market recaps here on StockTrader.com. The primary reason we have the basic package is so we can have access to more than three years of chart data and save chart layouts. The free version is the same as any paid package less a handful of features. See: 5 Best Free Stock Chart Websites

Closing Thoughts

I see investing as a lifelong game. Every trade is another lesson to be learned, and even though I have over a decade of “experience”, I am still learning something new each day.

How was your 2017 in the stock market? What tools and services do you use for your trading? Feel free to email me, “blain (AT) stocktrader (DOT) com” and let me know!


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Click here to see some testimonials from our members!