Objectives - May 2010 - Review

In this post I will review my performance from the past month, determining what was accomplished, what was not accomplished and why. Below is a summary of the objectives I set for myself during the month of May:

• Read 60 pages per week (Finish) - Data Analysis with Excel
• Read 40 pages per week - Statistical Analysis with Excel
• Read 1 chapter per week - Schaum's Outlines of Statistics
• Post 1 Lessons Learned per week
• Determine at least one trading strategy to begin simulating trades
• Document daily study activities on blog (pages read, blogs read, trades, tasks, etc.)
• Update market breadth indicators spreadsheet daily
• Monitor StockTwits feed daily
• Monitor intraday performance of SPY and IWM daily
• Read 20 pages per week - Option Volatility and Pricing
• Archive 50 blog posts per week
• Review market breadth indicators and remove ones that do not add value
• Perform 1 backtest research study per week
• Create post summarizing backtest results for breakout new high analysis
• Summarize momentum stock performance for momentum over 10, 15, and 20 days and the 5 day return for each

The items in green of the objectives that I completed during the month. The items in yellow are objectives that were partially completed during the month. The items in red are objectives that were not completed during the month. Below is the list of items that I accomplished in May:

• Read 1030 trading blog posts
• Archived 141 blog posts in email
• Posted 4 Lessons Learned
• Posted 0 backtest research studies
• Read 58 pages - Option Volatility and Pricing - Natenberg
• Read 20 pages - Daily Trading Coach - Steenbarger
• Read 85 pages - Excel 2007 Data Analysis for Dummies - Nelson (completed book)
• Read 174 pages - Statistical Analysis with Excel for Dummies - Schmuller
• Read 136 pages - Schaum's Outlines of Statistics - Spiegel
• Completed 159 problems - Schaum's Outline of Statistics - Spiegel
• 58.0 hours of backtesting with StockFinder 5.0
• Updated market breadth indicators spreadsheet on 20 days
• Monitored intraday SPY and IWM activity for 19 days
• Monitored daily StockTwits feed for 19 days
• Recorded simulated trades in journal on 9 days
• Morning cardio on 19 days
• Ran 27.0 miles
• 20.0 hours of martial arts

This blog has served as an excellent resource to record my daily accomplishments throughout the month.  It is motivating to read through the list of the completed items.  Sometimes the significance of even the smallest daily accomplishments can be lost in the day-to-day shuffle, but the personal growth from these small tasks compounds quickly over the course of a month.

I have also improved my daily routine.  Once again I stayed on top of updating my market breadth indicators, although I wasn't able to update/remove any indicators.  I did do some preliminary research on the topic and I made of list of potential future additions to the spreadsheet.  I monitored the StockTwits feed and the SPY/IWM activity virtually everyday this past month.  The only day I missed was a vacation day.  I was able to successfully integrate the StockTwits feed into my daily routine.  I still need to determine a list of posters whose trading style resonates with me, but that will come in time.

I read through 1030 trading blog posts last month. I consider this an important task at my current stage of development. The posts expose me to many different trading philosophies and ideas pertaining to strategies, backtesting, indicators, development, psychology, etc. It is as if I have an entire trading firm working for me that includes quantitative researchers, behavioral psychologists, and traders of various strategies.

I was able to archive 141 blog posts in my email account this month, which was short of my goal of 200 archived blog posts.  I made this an objective because I wanted a personal data bank of the trading blog posts I thought were memorable in case the owners blog went down, or google reader crashes, etc. So far I have collected a total of 411 blog posts.  This is a great way to search any type of information such as systems, indicators, strategies, etc. If I ever need any new ideas I can quickly do a search in the archive for stops, mean reversion, exits, volatility, psychology, etc.  I will add that with the closure of Dr. Brett Steenbarger's TraderFeed blog, the number of posts that I archive daily has decreased somewhat. His blog offered exceptional content. I will begin going through his older posts from earlier years and archiving that content as well.

I accomplished almost all of my reading assignments. I read 85 pages of "Excel 2007 Data Analysis for Dummies", completing the book. In its place I began reading "Statistical Analysis with Excel for Dummies" and I read 174 pages.  This book is pairing well with "Schaum's Outlines of Statistics".  There is plenty of redundancy between the two books, but I like the fact I am repeatedly exposed to the same material from two different instructional perspectives.  I read 136 pages and completed 159 problems in the Statistics book.  I seem to be grasping statistics and probability fairly easily.  I find the two subjects incredibly fascinating and I am hoping to begin adding some statistical studies to my backtest research.

I also read 58 pages of "Option Volatility and Pricing", which fell short of my goal of 80 pages. I am not as worried about this reading assignment because the objective is to introduce me to the world of options, and is not currently applicable to my stock trading methodology.  I am sure I will reread this book several times in the coming years.  I also managed to squeeze in 20 pages of "The Daily Trading Coach" during Memorial Day weekend.  20 pages doesn't sound like a lot, but the book is separated into many short lessons for traders.  It is a good read.  All total I read 473 pages during May, which is pretty good by my standards.

I spent 58 hours backtesting. I have come to realize that it is more important for me to identify a trading edge than it is to read because I need to begin virtual trading and journaling. Before I can simulate trading, I need to determine a trading edge. I am not looking for something revolutionary, but I do need something that could potentially produce a small profit because I would like to evaluate slippage and commissions on the profit.

Even though I spent a great deal of time backtesting, I did not post any of my results on the blog.  I have a tendency to race though the actual backtesting, and then sit on the data for awhile before creating a summary post. In order to address this, I am going to simplify and shorten my backtest posts.  I have spent a lot of time researching general stock market momentum behavior and returns over short periods of time (1, 5, and 10 days).  In June, I plan on making many small posts with a similar formats to present the results.  Once the small posts are completed, I will then create a summary post of each grouping of backtests.  This should make the task of presenting results easier for me.

I added a new physical goal to my daily agenda in May.  Since I moved I now have a gym in my apartment building.  I decided I should start working out in the mornings before work to take advantage of the gym access.  I began doing 15-20 minutes of light cardio each morning before work.  This should help me train for my next half-marathon as well as benefit my martial arts conditioning.  Thus far, it has been a great addition that I plan on maintaining for foreseeable future.  In addition to my morning cardio, I was able to maintain my mileage (27 miles) and attend martial arts frequently (20 hours).  I completed a few 4 mile runs last month as well as my first 7 miler in preparation for the Chicago Half-Marathon this August.  I only have two more months of training for the half-marathon.  I will try and get my long run up to 10 miles during June.

I am still pleased with my development in the past month. I am looking forward to improving on the areas I mentioned above during the next month.