Beware Account Killers

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This article on investing money management had me thinking about how it applies in the field of options trading. Since I started trading options, I’ve become more conservative in my risk exposure. Right now, I’m trading several times a month; and I’m using 50% of my account to trade. So it’s about 50% cash.

https://www.timothysykes.com/blog/number-1-account-killer/

Timothy Sykes writes: Any trade that you feel the need to check on constantly and after hours. Trading is fun, but it shouldn’t consume your life.

  • Your losses exceed the maximum amount you allow on any given day.
  • The stock has gone beyond your stop loss.
  • Your typical trade size is hundreds of shares, and your current position is thousands.

His suggestions on controlling trading size, frequency, and losses will help you avoid your bad habits! But I like his ideas on keeping a journal. I thought InvestorBlogger might be that journal! But alas… it’s too sporadic!

I can certainly attest to #1 – trading RIOT and GPRO. I checked them too often. GPRO got me a loss of $200! I don’t trade like that anymore, though technically it would now be within my 5% rule. At the time it was a much higher percentage of my pf.

Even more volatile than GPRO was RIOT. Like its ticker, it turned into a riot. My loss was a lot smaller. But the chart is very volatile. That’s what kept me awake for these stocks. I’m lucky my education only cost $210.00!

I can also verify that my trades in DBX have gotten bigger than I’d like, and gone on way longer than I’d like. I have got 400 but it’s like double what I intended, since I tried to rescue an opening trade too early. Sigh!

How do you manage your money or do you let the trades manage you?

Apple vs PC

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For me, the priority in computing is perhaps familiarity, reliability, repairability and expandability.

So I have several PCs at home/work. If one breaks, I can get it repaired in my local shop pronto. All parts can be replaced. They’ll even replace or reinstall Windows for me. Apple can’t do that so fast.

With Apple, I’d need to have an extra machine lying around just in case it was away for several weeks or longer. For Win notebooks, this is more of an issue as well, but my current notebook is now out of warranty, so the PC store can maintain it without returning it to the store. Last time I updated the HD to an SSD, the PC store just handed me the drive from inside! New casing and it was good to go as an external. No fuss, no muss, and no reformatted drive! Like I said, I don’t think Apple can beat that for service.

All machines have reliability issues, some more than others. This is not unique to PC. But the machines I have run pretty smoothly most of the time. I know how to keep them running, and truthfully, Win 10 is a vast improvement in that respect over Win7/8.1/XP so much so that I’m quite happy to keep using it. When I run into software issues with Win 10, I typically can get it resolved myself… and I’m not a whiz by any means.

But for me, familiarity is probably the biggest advantage for staying in the Windows ecosystem. I know how it works, I know how to transition from one version to another because of the familiar approaches. Though Win8 was a dawg! I still don’t like that version. I think I could probably learn how to use a Mac interface, but seriously I don’t see any real need. Overall, I prefer the Windows experience because I can get things done quickly… I am sure many tasks would be just as quick on a Mac, though.

I also have an IPAD, my 2nd one. And I like that… though perhaps not as thrilling as the first one. The software on IPAD has improved immensely since version 5. But it is still a walled garden, and I find that frustrating at times. Things that should be easy to do aren’t. Or they’re impossible. Or Apple makes me run circles trying to do something. And the file manager is truly, truly pitiful even on IPADOS 14.x. Painful. Still I understand the paradigm is different. But it frustrates me endlessly.

As a result of owning an IPAD, I probably would never buy an Iphone. I have had three Androids and I find their philosophy and open design more useful to me. But I would never buy an Iphone: it tries to do in software a lot of things that should perhaps be left to hardware – like extra storage or a 2nd sim card. After wrangling with software niggles time & again, I can only say that I prefer hardware solutions because they tend to be more reliable for me. So give me an SD card slot so I can read my pictures onto my PC or pad… don’t make me connect wirelessly (it’s unreliable); give me an extra SIM card slot for a 2nd number; give me an onboard SD card on my phone so I can store more pix, don’t force me to upgrade at the huge Apple upsell price as well.

But I get it. Some people feel more comfortable using a Mac or IOS device. That’s their choice. For me, though… PC Yes. Android Yes. Ipad Pro Maybe or Yes. Mac Maybe. Iphone NO.