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Pyc370 Week 1 Reflection

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After a fatiguing afternoon of assisting my grandparents with their errands, we were arriving at our final destination. My grandparents were meeting with their financial advisor, while I sat in the lounge watching pundits on television discuss the latest market action. I was 17 at the time; prior to that day I had heard others discuss the capital markets, but nothing had struck my interest to convince me to research any further. However, that was all about to change. I firmly remember the analyst forecasting lumber to break the highs it had made in early 2013. Although the financial diction exchanged between the two was obscure to me, the chart was a puzzle that I had to dissect further. That night I downloaded a paper trading iPhone application and began mapping out my portfolio, of course I had no clue what I was doing! Fast forwarding three months, after diligently studying trend following techniques and technical analysis, specifically Japanese candlesticks, I opened my portfolio trading my own money. For the next six months, I was moderately profitable. In August of 2015, I suffered my first catastrophic loss. To emphasize the gravity of the situation, I …show more content…

Additionally, I was overleveraged, trading more than my average position size, and I didn’t hedge my positions. Since confronting my trading problem, I have learned extensively on psychology, both market participants and that of my own. Furthermore, I have refined my risk management, position sizing, and correlation to the overall market. I have also began to program algorithms with a friend of mine to avoid the human component, which is prone to unconscious and conscious biases. Lastly, I have incorporated a top-down approach beginning with the macro-economy in my analysis, this limits the effects of volatility stopping me out a position while keeping my commissions

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