Gone Until January 8, 2007

...continued from yesterday

If you find errors in your Monthly Brokerage Statement, you have to send a written notice to your broker immediately. Usually, your Account Agreement with the broker contains a provison that after a certain number of days (usually 30 days but sometimes less), you lose any right to challenge any mistakes on the MBS. That provision works only if the error works against you. If the error is in your favor, that provision does not prevent your broker from correcting the error.

This year, 2006, I found errors totaling over $370.00 in my brokerage statements.

… back on January 8, 2007

Copyright 2006 Raymond T. Lee. All rights reserved.
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Superfluous Details in Your MBS

...continued from yesterday

Details in your Monthly Brokerage Statement other than the two mentioned in this week’s series of blogs are not vital. You can check them if you have nothing else to do. Or just skip them.

Some Useless, Misleading and Confusing Sections of a MBS include:
 Total Equity Summary
 Asset Summary
 Income & Distribution Summary
 Tax Information Summary
 Profit/Loss Summary
 Cash and Accruals
 Total Net Portfolio Value
 Summary of Your Investments
 Change in the Value of Your Account
 Your Account Performance
 Portfolio Summary – Book Value & Market Value

continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Accounting for Open Positions

...continued from yesterday

The next part of the monthly brokerage statement (“MBS”) you should check is the list of your open positions.

There is no uniformity in the title for that section of the MBS. Here are some possible names for it

-Portfolio Assets
-Your Investment Holdings
-Positions In Your Account
-Positions
-Details of Your Investments
-Portfolio

This information could be at the beginning, middle or end of the MBS. To ensure you don’t get bored, brokers from time to time change the location in which they put this information on your MBS!

When you find this information, compare the open positions listed in the MBS against your own records.

To facilitate review of your trading performance and to facilitate annual income tax filing, you should keep a record of closed positions including details such as:
-date position opened
-name of instrument and symbol
-quantity
-price when position opened
-price when position closed
-commissions
-other costs
-net profit/loss

Here's a time saving tip for this part of the MBS. As and when you open positions, record them first to a ledger that you set up for open positions. Don't record them immediately to the Cash Journal. Wait until you close the position to record the profit/loss into the Cash Journal. Then when you close the position, cut and paste the information about the position onto another ledger for closed positions.

If and when necessary, you can calculate the cash position in your account by deducting the original value of your open positions from the last balance amount in your Cash Journal to "update" it to the current date. If that doesn't work for you, then just revert to the "proper" way of recording open positions immediately into the Cash Journal and also recording the closing of that position to the Cash Journal as and when they occur. That's double the work compared to the shortcut method, done only as a pedantic exercise.

continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Statement of Transactions or Activity Section

...continued from yesterday

Your monthly brokerage statement generally has different sections. There is no uniformity from broker to broker as to what name to give the different sections or what different sections to include in the monthly statement.

The best place to start when checking your monthly brokerage statement is the list of transactions. Most brokers put that list in chronological order.

There is no uniformity in the title for that section of the brokerage statement. I believe the proper accounting title for that section of the statement is "General Journal" or "Cash Journal". Here are some possible names that brokers use for it:
-Transactions This Month
-Account Activity
-Your Activity This Month
-Transactions
-Activity In Your Account From … to ….
-Transactions During Period

What’s common among the various names is the word “Activity” or “Transactions”. So look for one of those two words and you’ll likely find the place to start checking the statement.

That section could be anywhere in the statement: the beginning, the middle, or the end.

After you locate it, compare it to your own records as to the activity in your account.

Usually, but not always, the transactions are listed on the brokerage statement in chronological order. If they are in some other order, such as alphabetic, you’ll need to tell your computer to sort your own record of the transactions, putting them in the same order as on the statement so you can check them. Restore your own records back to chronological order after comparing the brokerage statement to your own records if you had to sort them to put them into the same order as they appear on the brokerage statement.

A shortcut to checking the list of transactions is to merely look at the Closing Cash Balance. If it matches your own records, you can, for the time being, skip checking the entire list of transactions. You’ll have to come back to the list if the next step reveals any missing items.

continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Monthly Account Statement Frustration

Have you ever wondered if your broker intentionally sends you incomprehensible monthly account statements?

You’re not alone. Several people I asked recently have said that they don’t bother checking the monthly account statements they get from their broker because they find the statements incomprehensible.

Different brokers use different formats for monthly account statements. Worse, brokers from time to time change their statement format to ensure their customers are permanently confused.

This week’s series of articles will deal with how to decipher those statements nothwithstanding the sadistic bean counters' efforts to leave you permanently frustrated.

continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Identity Mantra

...continued from yesterday

Here’s a belief relevant to Identity that you surely must be familiar with.

“I can’t help myself. That’s just the way I am!”

Have you ever used that mantra to maintain any of the following habits?
-overeating
-procrastinating
-indulging in other bad habits

You can use the same mantra to reinforce and maintain good trading habits such as:
-always waiting for an entry as defined by your Trading Plan
-always trading within safe risk limits
-any other good trading habit you want to install in yourself

Anyway, today’s Friday and I’m taking the rest of the week off. I can’t help myself. That’s just the way I am!

Back on Monday ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Identity Beliefs of Consistently Profitable Traders

... continued from yesterday.

Here’s some ideas from trading coach Mark Douglas about the identity (beliefs about themselves) of consistently profitable traders. An easy way to adopt them is to read them during trading hours. They are from Mark Douglas’ book Trading In the Zone.

I am a person who always:
-follows his/her own system rules for entry and exit
-predefines the risk of every trade
-completely accepts the risk or else doesn’t do the trade
-acts on his/her edges without reservation or hesitation
-pays himself/herself as the market makes money available to him/her.
-continually monitors his/her susceptibility for making errors

Copyright 2006 Raymond T. Lee. All rights reserved.
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Pain-Free Identity Change

... continued from yesterday.

If you want to change the way you trade, then changing your identity (your beliefs about who you are) is one of the most powerful ways to do that. And doing so can be pain-free.

Here’s a quote from Tony Robbins’ book Awaken The Giant Within (p 428 - 436) describing how American POWs were persuaded, without torture, to turn against the US government.

“There were no marks on his body. The Chinese Communists had held him captive in a tiny room for more than twenty hours, but they hadn’t beaten or tortured him. … and as a result of their polite conversation, this GI now held a document in his own handwriting detailing the countless injustices and destructiveness of the American way of life—the capitalist society—and praising the superiority and ethical humanity of the communist system… he was directed down a path that caused him to literally shift his identity. He was now simply acting in accordance with his new image of himself.”

“Why is it that during the Korean War more American POWs informed on their fellow prisoners than in any other war in modern history? The answer is that the Chinese Communists, unlike their allies, the North Koreans, understood the power of identity to instantaneously change not only their long-held beliefs and values, but their actions, in an instant. Rather than brutalize the prisoners, they doggedly pursued their own ingenious form of psychological warfare designed not merely to extract information or create compliance, but rather to convert the American fighting man to their political philosophy.”

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Source of Identity

… continued from yesterday.

Who are you as a trader?
-scalper?
-micro-trend intra-day trader?
-swing trader?
-position trader?
-something else?

Where did you get your idea about your identity as a trader? Do you recall who put that idea in your mind? Did you do it yourself? Did some advertisement on the internet do it to you? Did some junk mail from your broker do it?

If you didn’t unilaterally come up with your own identity as a trader, you might want to take time off to consider what you would like your identity to be as a trader. Otherwise, you’ve abdicated your free will to an internet ad, broker junk mail, or whatever outside yourself put your identity as a trader into your mind.

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Effect of Identity on Trading Profits

This week’s articles will be about how your Identity affects your trading profits.

Your Identity is a belief. It's a belief about who you are. It's a belief that can either help you trade profitably or cause you to lose money trading.

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Cease Trading ... Until Monday

...continued from yesterday.

If I absolutely knew that in 12 months I would be abducted by aliens and taken to a far away galaxy, I would indulge myself in being happy enjoying the 12 months left on planet earth. I’ll start by ceasing trading for Friday, Saturday and Sunday.

... back on Monday, unless abducted by aliens...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Trading As If You're About To Be Abducted By Aliens

OK, so now you’ve got SMART goals, including goals for trading.

Wait a minute. How important is it to you to be trading?

What if you knew absolutely for sure that in 12 months you would be abducted by aliens and taken to another planet? Knowing that, would you spend any of your time on trading?

Whether the answer is yes or no (especially if it was “yes”), consider the following.

How much time would you put into trading each day? 8 hours? 1 hour? 5 minutes? None, just a few minutes a week or each month?

Who would you want to involve in your trading? No one because you like going solo? Your kids? Your spouse? Your talking parrot?

What markets would you trade? Electronic public markets? Open outcry pits? Real estate?

What time of day would you like to trade? Morning shift only? Afternoon shift only? Overnight only?

Where do you want to be when you trade? At home? In an office building? On a yacht? At the beach?

What time frame would you trade? Scalp? Swing? Position? The 12 month deadline precludes longer term investing!

Finally, why would you want to trade if you absolutely knew that in 12 months you would be abducted by aliens ? Because:

You enjoy it as much as(or more than) you might enjoy doing anything else?

You want to sharpen your trading skills so the aliens will change their mind about abducting you?

You've received telepathic messages that the aliens are corrupt and will accept Earth Currency as a bribe to pass you over in the abduction so you want to make enough Earth Currency by trading to pay off the aliens?

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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Smart Goals

While setting goals, you need to articulate them so that they are Smart to facilitate their attainment. That is:

Specific
Measurable
Attainable
Realistic
Tangible

For details about this acronym see
http://www.topachievement.com/smart.html

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
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Some Examples of Trading Goals

Here’s some ideas for coming up with your list of goals related to trading.

Review your Statement of Income & Expenses
-how much money would you like to make next year?
-are there any expenses you would like to reduce or eliminate?

Review your Trading Journal.
-What would you like to make consistent (i.e. continue doing more of)? Trading coaches often advise that performance goals are more helpful than outcome goals. For example, if your outcome goal is to make $500,000 next year in trading, then a relevant performance goal might be to always use the 20 day moving average as a trailing stop to exit open positions.
-What would you like to do less of or eliminate?
-Are there any toxic people you need to avoid? Refer to the article in this blog about toxic people’s ill effects on your trading (Tuesday, July 18, 2006 “Profit by Skipping Out, 6”).
-Are there any helpful supportive people you need to interact more often with?
-How much time do you want to spend on trading? Would you like to spend more time on it or less time on it?

Review your collection of books and courses on trading.
-What books would you like to read again?
-What course materials would you like to review?
-What would you like to avoid reading again?

Review your story about your ideal life and compare it to your current life situation.
-what do you need to eliminate from your life to get from your current life to your ideal life in the category of “trading for a living”
-what is missing and that you need to add to get your ideal life in the category of trading

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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Perspectives For Goals Setting

Goal setting was the topic of last week’s series of blogs.

This week, I want to chat some more about this important topic. With goals, you get to create your future as you choose it to be.

As a trader, what elements of your ideal life do you want to have come true over the next 12 months? Consider this question from two perspectives.

First, consider the question under the assumption that you can have your life any way you want it to be without regard to any limitation whatsoever. How would you like your life to be if you had all the resources (time, money, people, etc.) you needed without limit?

Second, consider the question under the assumption suggested in a book I recommended last week, How To Get Control of Your Time and Your Life. That assumption is that you only have another 12 months to live. Gruesome as that may feel, my experience is that it certainly focuses your attention on what’s important to you.

Continued tomorrow ...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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Manifesting Your Dream Life

…. continued from yesterday.

After you have identified your dream goals and have scheduled yourself to work towards them, is there anything else that will help make your dreams come true?

Yes, there’s powerful help.

1. See "The Secret", a movie. http://www.thesecret.tv/home.html It features some of the world's leading experts explaining how dream lives come true.

2. Or read Esther Hicks & Jerry Hicks' book Ask And It Is Given. These authors have a lot of free stuff at their website http://www.abraham-hicks.com/teachings_brief.php

I'll be back on Monday after the weekend ...

Copyright 2006 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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