What I’m Trading: Alex the Intern
Industry: Learning stuff
Salary: $20k from tutoring, coaching and interning
What do you invest for?
Obviously, the returns are a big part of it but not the only part. An extra $100 in my trading account doesn’t translate to any difference in my day to day life. If I did it only for the money, I would be better off working behind a bar.
Natural consequences of being part of the market range from the thrill of being right to the character test it provides. I think having so much skin in the game puts your decision making and emotionality to the test more than most voluntary activities.
How much of your income do you put into the market?
After expenses, my money goes either towards travel, the market or the university pub. I have no trips coming up so I am trying to put 50% of my income into the market.
How much time do you spend on your investments each week?
45–60 minutes before each trading session is strictly devoted to trading. So around 4 hours each week. Since I trade the US market, I sleep through live hours. That’s why most of my planning is before the market opens.
What’s in your portfolio right now?
Stocks that are going up! I’ll expand on what I look for further down but I’m not one to try and buy “cheap” stocks falling in price. I’m not patient enough to wait for them to turn around.
These have all been in my portfolio over the last month but right now I’m mainly cash.
How are your returns?
I was up 18% in August.
They say “everyone is an expert in a bull market” though.
Over the year I haven’t replicated that success every month. I made a couple of big mistakes especially around the 10% correction in February.
What do you love about being in the 🇺🇸 market?
This may sound cheesy but it’s the way it goes.
I’m ultra-competitive. If I could be anything it would be a pro-athlete. I don’t even care what discipline; I just love the idea of being with the best. The US market is the major league of investing and trading.
Every day you are in the same arena as Buffet, Dalio, Minervini, Tiaan Stals, and every day you’re chasing the same thing. The fact that I can have a better day or week or month than Buffett is pretty f*cking cool.
Mark Minervini, who wrote Trade Like a Stock Market Wizard, was US Investing Champion in 1997 with around 1100% return. While everyone else traded futures, options, used advanced hedging techniques, he stuck to what he was good at and traded his way to the top in stocks.
The idea that one day I can do that keeps me going.
What are you watching?
- Tandem Diabetes Care (TNDM)
- Square (SQ)
- Atlassian (TEAM)
They were all in my portfolio last week but I sold as the market got a bit shaky. I would rather lose 3% than risk losing 10% if the downturn had any momentum so I got out. The market seems to have rebounded just fine so I am watching to see if I can get back into these stocks.
Do you have a trading strategy?
100%. But first: this strategy isn’t for everyone…or anyone if you’re smart enough not to follow me.
To keep it simple, I like stocks with an upwards price movement with big volume, breaking above resistance. There are some nuances I incorporate (for better or worse) but it’s stuff I’m just trying out. I am not trading today to make money, I am trading to learn lessons and strategy. In 15 years time when I have a bigger account, these lessons will turn into real gains. A good day today buys me a new pair of shoes. A good day tomorrow will buy me a villa in Greece.
What’s the best trade you’ve ever made?
I tell this story every chance I get! I got on the crypto wagon in late 2016 and bagged a 2000% return on the tiny bit of money I had in NEO (then called Antshares). I didn’t sell at the peak but made nice gains on the way up.
In the stock market, I haven’t got anywhere as large but have had a few sweet 30–50% returns in a few weeks… Whiting Petrol Co (WLL), Square (SQ), iQiyi (IQ), Tandem Diabetes Care (TNDM).
And the dumbest?
Easy. Selling bitcoin too early after getting in at under $1000.
It still hurts.
Also, I tried playing with inverse ETFs in March. I won’t say trading or investing, it really was just playing.
The biggest thing I learned is to confirm a trend before jumping in.
In March, The SP500 was constantly hitting support and if it broke through I thought the market could fall lower. I bought SPXU before it broke through. For every 1% the market gains, SPXU falls 3%. The market had a brief rally and I lost.
I learned my lesson. I am happy to make every mistake once…as long as it really is just once.
Is there anything you’re trying to improve about your strategy?
Discipline. Especially around managing my exit out of positions. I know what I have to do I just don’t do it enough. I am learning though. It relates to managing stop losses and recognising turn around patterns.
It’s like when I play golf. I can routinely smack my drives 240 yards but will get outscored on every hole by the 75-year-old with arthritis. Not every hole has to be a birdie! Not every stock will be the next TNDM. Managing my positions better will result in better results just like playing smart golf will lower your scores.
Who do you lean on for advice with trading?
I don’t really get advice. Everyone has a different strategy. If I take 100% credit for my wins, I have to be 200% responsible for my losses.
I do ask Matt or Marc in the office for what they think sometimes.
Kris, the German intern, and I have made a bit of a routine of talking before the market opens every night for 45 minutes. While we have a similar strategy, we have different portfolios and talking lets us properly express our ideas, especially since we don’t always agree on everything.
One of Ray Dalio’s most prominent principles is to “appreciate the art of thoughtful disagreement”. Kris and I can openly critique each other’s trade ideas. I’ve talked myself into and out of a lot of trades within the 15 minutes before open and it’s for the better almost every time.
Do you remember the first stock you bought?
I think it was Scorpio Tankers (STNG). I read an article about how they were expanding their fleet and thought I knew something no-one else did. I made no money on it… obviously.
I would watch my portfolio for hours as it would fluctuate by a few dollars and feel sick with every downturn. If there’s one thing the crypto market taught me it is how to stomach a loss, although I am working towards eliminating any significant losses. This relates to better management of my positions: setting a stop loss based on Average True Range or support/resistance levels and constantly updating.
What was your first trade on Stake?
CBOE. It was on a tear. I didn’t know much back then but was ecstatic with my 8% return in a month. I’m sure my finance lecturers would be over the moon by 8% in a year.
Any lessons you’d give to someone who’s never invested or traded before?
I don’t think I have the experience to be giving anyone advice so I will let someone else do it on my behalf.
“You will never fully convince someone he is wrong, only reality can”.
One of my favourite writers, Nassim Taleb, wrote this in Skin in the Game. I 100% think it’s true.
What does it mean? You may know something from being told, but you won’t understand it until you’ve done it. So start trading! I have been forced to learn things for myself.
The best place to start is reading. Stan Weinstein’s Secrets to Profiting in Bull and Bear Markets is a bible.
UPDATE: Ok one piece of my own advice, I can’t help myself…DON’T BUY A STOCK BASED ON WHAT YOU READ IN AN ARTICLE. We’re at the bottom of the food chain. By the time you know the pros have already bought it, rode it, and sold it.
If you were to buy a US stock or ETF right now…
Unisys Corp. (UIS)
It’s breaking into recent highs on the back of good volume. The volume over the last few days was up to 20x the recent daily average. I especially like that it had a good day when the rest of the market had a downturn last week.
Of course, I could wake up tomorrow and it’s down 15% so don’t take anything I say as gospel or advice. Remember, I’m a student both at uni and trading.
ICYMI: make your own decisions
This is not investment advice, just my opinion. Do your own research. The only thing I know is that I know nothing.