Trading with the Bulls
I have always wanted to find an easy, quick gain, low risk – high reward entry into the stock market. Until recently that seemed impossible, but now I think I might have found it…
I am a self-confessed geek (hence the nick-name ‘Techboy’ – which Steve Bush at Barclays Bank PLC originally gave me). Before that I used the nickname ‘Mercenary’ as I have always worked hard for money, plus I played (still play!) First Person Shooter games so that name fit me well. So in short, I am a geek with a love of money (spending it as well as accumulating it).
These 2 traits led me to research share dealing online – various websites, communities, chat rooms, twitter feeds, Podcasts, Vodcasts, etc. In June last year I came across 2 companies that I wanted to try. Both were based in America and both had very different attributes:
- Davian Letter BlackBoxx-4: A black-box (automated) solution. You give them your money and their computer does all the trading for you. It sends a buy, hold or sell order (up to 4 stocks at a time) on a daily basis to an intermediate broker (which can be set up for auto-trading).
- Bulls On Wall Street (BOWS): A real-time chat room that is active during trading hours, with at least 1 member of the BOWS company active in the chat-room during trading times. They also produce blogs (showing the market positions) on a daily basis. People here mainly do day-trading (trades within a day) and swing-trading (trades that may last a few days).
Both sounded good and I wanted to try each of them, but I had a problem – I am a British resident and live in the UK. Both companies were not set up for customers from the UK.
For the BlackBoxx-4 auto-trade system, I needed a broker who would allow me to trade in USA companies (of all sizes, including small-caps) on an auto-trade basis. I spoke with Anthony Davian directly via twitter and also once (at around 01:00 UK time) in a chat-room while he was hosting a live video teleconference based interview with another trader. He was really helpful and wanted to get me on-board (obviously helping me out would help him understand and possibly get other traders from the UK and Europe).
After a few months, he got his system set up on a US based broker called tradeMonster. I could use the BlackBoxx-4 system via them, so it was good for me. I signed up, deposited $14k with them and got started. As I was new to it, I made an error at the start my allocating 100% of my equity to the account – this only allowed the system to purchase 1 stock out of the 4. I then spoke with Anthony Davian and also the tradeMonster support team who told me that I should allocate 12.5% (as it is a margined account) and that will then allow the system to use 100% of my pot.
Since the BlackBoxx-4 account went live on 3rd December 2010, its value has gone up and down by just a few hundred dollars. Last week it ‘jumped’ up to $14,600 which is very little, so I am considering cancelling the account in a few weeks if it does not improve.
The Bulls on Wall Street account was more of a struggle to set up. Well actually that’s not quite true – the BOWS account was very easy to set up, I was just having real problems finding a broker that would let me trade USA small-cap companies. All of the UK brokers I asked were useless, I couldn’t find a UK based broker that would let me trade USA small-cap companies. The best I could find was Charles Schwab, which is a mainly USA based broker with a European arm. I registered with them and tried to trade with BOWS, but the BOWS team kept picking companies that were too small for me to trade on, even with the Charles Schwab account. Luckily, I had kept in touch with Kunal Desai who is one of the founders of BOWS. He is pretty good at keeping in touch with people, especially at introducing new people to the system and helping them out. He knew I was having problems so in November 2010 he introduced me to a new BOWS service, whereby they use the broker Lake Street Trading (LST). LST are cheaper than Charles Schwab on a transaction basis, accept clients from the UK and allow the trading of any size USA based company – which is great! I have had a lot of issues with their trading platforms (PC and Internet based), but after a lot of complaining from me, it has gotten a lot better. LST do seem like a bit of a small, cowboy company; but at least I am now up and running and most importantly – making money!
In order to get set up with LST, I deposited $6,000 into them. After which I began trading with BOWS. So far this has been fairly successful, with me usually making around $150 – $250 per day. Some days I have ended up just above $0, but I haven’t been below $0 yet. I’m not saying that it is easy, but trading with BOWS has been far easier and far less risky than doing it by myself; plus I have learned a lot in a very short space of time. So last week I put in another $6,000, which means that I can have double the amount invested, which should (in theory!) mean double the profit (or more, as I would be able to invest in more companies, so more chance of catching stocks on breakout).
The question on my mind now is – ‘could I make a living from it?’ If I could ‘guarantee’ making as much money from share-dealing as I do from my current job as a SAB BASIS Administrator, then I would be seriously tempted. Although the hours are 2.30pm – 9pm UK time, Monday – Friday; it would be great if I didn’t have to work in an office environment (where I am now is seriously depressing, no ‘fun’ at all!) and I could work from any location in the world, all I would need is a laptop and an Internet connection (3G would be ok). Plus it would give me more flexibility to work on other things (like GetMeCooking), I wouldn’t have to do any on-call (I am currently on-call every 3rd week) and have to work some weekends. Another disadvantage of the share-dealing that I am doing is that it is all US based, therefore all of my money is invested in US accounts – which means that I have to be mindful of the UK/USA exchange rates.
So in short:
- I am now at a position where the share-dealing is going okay, but there are some drawbacks (like not being able to trade effectively from the office, so I do most of my trading from home 6pm – 9pm)
- It would be much nicer (safer) if all of my money was based in the UK instead of over in the USA
- I know where I want to ‘be’ (i.e. trading shares full-time and working on developing GetMeCooking into becoming a profitable business), but making that step is too risky right now
It will be interesting to see how things progress over the next few months!