Friday, February 16, 2007

Questions from a Novice

On 2/11/07, JT wrote:
I don't quite remember how I surfed to your blog, probably as a result of looking for info on TMTT. Your blog seems to be well written and informative. If you have time to respond, I have a couple of questions about your experience.

My background:

I'm 46 year old surgeon in lower Alabama fighting the dueling demons of spiraling overhead costs and plummeting re-imbursements from Medicare and third party insurers. While my income level is satisfactory (for now), it requires ever increasing productivity on my part; more patients in clinic so that I can schedule more surgeries; longer hours in the office and at the hospital are the result. My satisfaction with my profession is diminishing. I would like to develop an alternative source of income that would allow me to return to a reasonable life in my chosen profession (orthopaedic surgery). There are several choices, one of which is stock trading. (others include real estate, business franchises, sending my wife out for a job, etc)

My question(s):

What sort of time investment (on my part) would be required to first, become proficient in stock trading (based on your experience) and second, what would the ongoing requirement (on a daily or weekly basis) be. I am willing to create time by adjusting my practice schedule but, I can't walk away from my practice as it provides the income for everything else I do (including trading stocks, if that's what I choose to pursue).

Finally, If I decide to pursue this avenue, I would like to gain some working knowledge of the "language" and principles of stock trading. Is there a book or group of books you would recommend for the absolute novice in this area?

Thanks in advance for any advice.

JT, MD
Daphne, AL

Hi John, quite a pleasure to hear from you and thank you for the nice comments about my blog. I'll be returning to regular postings as other pursuits wrap up. I've most recently found myself on a bit of a spiritual quest. I've hesitated to post to my trading blog recently because all the latest activities haven't had much to do with trading.

Trading does take time. About 2-4 hours each day. There is a lot of terminology that is specific to the domain, but it shouldn't be too difficult a stumbling block. I have recommended a few books on my blog which will help get you started. Just getting the " Trading for a Living" book alone will help you understand a bit more about what you will be getting into. It's truly not easy in the beginning. The best place to start is to learn your own style and what strategies appeal to your risk tolerance, time commitment, etc...

The truth about trading is that you only need to be really good at 1 strategy (though knowing other strategies will allow you to make money in a variety of market conditions). Something else to be aware of is that many professional traders only make 20-80% APY. Oh sure, an individual trade now and then will yield amazing returns, but the "expense" trades (losses) will average out to something more reasonable APY-wise. Even 20% APY is still pretty amazing, and certainly something you can't get consistently in other investments. Of course it is not exactly a passive investment strategy (depends somewhat on the strategy employed and time-frame).
Allow me to plug the trade journalling program that I have in the works. The preliminary name of this product is ScoreCard and I hate to refer to it as simply trade journalling software. After my development team gives the green light for beta testing, I'll extend a few offerings for some select people to help work out the final kinks. We're expecting to be ready for beta testing in just over a month. ScoreCard will be a tremendous aid to burgeoning Traders and veterans alike, as it includes simple and powerful features to help Traders get feedback about their trading style and the effectiveness of the various strategies, evaluation criteria, etc...

Mark

1 comment:

anthelone said...

Glad to see you're making progress on your journal software. I bought that book Trading for a Living from your store (because that is exactly what I want - and because it's leather bound! ;)) and am looking forward to reading it. I am thinking it will go nicely with all the TMTT material.

Take Care

Mike