Michelle started popping up on various sites posting some of the most insightful comments on trading. It was clear from her comments that she was no beginner in the markets. She’s now posting some great articles like this gem. Here’s another great article that picks apart one of her trades.
Read on for more about how Michelle got started trading, her early trials and tribulations, and why she thinks there are so few female traders. Michelle has offered to answer questions in the comments of this post, so ask away!
(Also check out today’s episode of WallStrip on HOG.)
StockTickr: Tell us a little about yourself, Michelle.
Michelle: Recently, TraderMike contacted me after reading some of my comments at various trading blogs, and I took that opportunity to suggest the possibility of my contributing to his site, to which he very graciously agreed. I find writing posts and responding to comments very interesting, demanding, and fun.
I am presently living with my husband, a computer historian, in the southeast of France, and trading full time for a living. I am originally from New York City, and I worked as a bibliographic control technician at New York University Law School Library, as a potter, as a director for a small Historical Society in the Northwest, and as an administrator for two American software companies, one in the north of England, and then at another one near London. I have an undergraduate degree in Communications from New York University and took several courses in Library Science on the graduate level. I have also studied nursing with a fair amount of emphasis on psychiatry, and worked at various Manhattan doctors’ offices as a doctor’s assistant.
StockTickr: How did you get started trading stocks?
Michelle: Roughly around ten years ago, my British husband and I decided that he would accept a job in France. He suggested I consider actively trading instead of looking for a job since my French language skills were poor at that time. He told me the goal was to compound the account–make gains, plow those gains back, make more gains, and then plow those gains back, etc. Though I hardly knew any French, I knew absolutely nothing about the stock market. I thought a stock was something in which you boiled a chicken, some carrots, and a bay leaf.
StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?
Michelle: I allowed a long trade in BBH to decrease my account balance by 7% in one hour because I did not honor my stop loss. My account was halved following the September 11 attacks–one of my positions was a margined long in an airline parts supplier. But, the real horror was my account stayed flat for a very long time. I would make gains, give them right back, make them again, and then give them back, ad nauseam–not quite what my husband had in mind.
StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?
Michelle: I needed to read The Disciplined Trader by Mark Douglas until I understood it completely. I have just finished reading it for the tenth time, and since I still do not completely understand his approach, I will be reading it again down the road.
StockTickr: Describe your style of trading. How long do you typically hold stocks?
Michelle: I daytrade mostly, and usually hold positions no longer than a few hours. Sometimes I will hold an ETF position overnight or longer. A common focus in my trading style is to short buyer-exhausted stocks and to buy seller-exhausted stocks. These reversal trades have a very high probability of being profitable, but they require a fair amount of skill.
StockTickr: What’s your exit strategy for winning and losing trades?
Michelle: My stop loss is a certain percentage of my capital I am willing to risk, never exceeding 1%. If I have paper profits matching the amount I am willing to risk, I won’t give back more than 30%. Otherwise, I let my target be reached.
StockTickr: What 3 books do you recommend traders read?
- The Disciplined Trader by Mark Douglas
- How to read Charts by William L. Jiler
- The Reminiscences of a Stock Operator
StockTickr: What are your 3 favorite sites?
StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?
Michelle: I never risk more than 1% of my account balance.
StockTickr: What technical indicators could you not live without?
Michelle: The 20, 50, and 200 simple moving averages.
StockTickr: How do you think the market has changed over the last several years? How have you adapted?
Michelle: The market is still giving out clear supply and demand signals. During the low-volume summer months, I am more on guard for the skewing of these signals because of program trading. For that reason I tend to trade small cap, little known stocks that the big money doesn’t care about.
StockTickr: Do you backtest and if not, how do you instill a strong belief in your trading system?
Michelle: I do not backtest. I instill a strong belief in me, in my ability to perceive and execute opportunity according to my risk parameters by consistently doing it. I am always on guard to identify any emotionality on my part which can dangerously push the limits of my skill level. If it surfaces, I back off until I get it under control. One clue for emotionality getting the upper hand is my using the expression POS to describe the stock I am trading. Simply noting that, and then referring to the stock by its symbol usually puts a wrench in my emotional wheels.
StockTickr: What advice can you offer traders who are just starting out?
Michelle: To read The Disciplined Trader until you no longer get a headache from it, until the virtuously circular, redundant language rings clear as a bell.
StockTickr: What is the most common but easily correctable mistake you see traders make?
Michelle: Traders are often totally unaware of, or unwilling to control emotions, making it impossible to work at consciously channeling those controlled emotions into a focused edge. These traders, misguided and exhausted by such an emotional agenda, cannot identify, refine, and hone a methodology while consistently following a defined risk management approach. They are too wound up to let the market teach them. Their skill level remains poor, and they are no match for their competitors. The solution is to read The Disciplined Trader by Mark Douglas.
StockTickr: Why do you think there are so few female traders?
Michelle: Female traders are still pretty scarce on the trading floors and in investment banks because that was the way it was for a long time, and the inertia of that status quo still hangs heavily on Wall Street. As far as if there are less female online traders, that is hard to say. How do you count the people who trade from the privacy of their homes, and then break down that number according to gender? I, myself, have never been included in a survey.
Most traders cannot consistently accumulate profits. The successful ones are successful regardless of their gender. Online trading is the great equalizer for both genders, but especially for female traders as they do not have to put up with gender prejudices that are still practiced on Wall Street.
StockTickr: What do you like best about trading?
Michelle: It continually makes me a better person, calmer and more rational. You can’t say that for most jobs.
StockTickr: Thanks, Michelle!
Michelle: Sure, Dave.
Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.
Become a better trader by using the StockTickr Pro Trading Journal – figure out what’s working and not working in your trading.
- Elliot Dole
- Jon Tait, the Fickle Trader
- Bill Rempel
- Adam Warner
- Roger Nusbaum
- Dave Johnson
- J.C., the NYSE Scalper
- Brian Shannon, AlphaTrends
- Jamie, Wall St. Warrior
- Howard Lindzon
- Kernan of TRADEthemove.com
- Richard Todd
- Andy Swan
- Steve Nison of Candlestick Charts
- Dan Mirkin from Trade-Ideas
- Bruce Brotnov
- Eric Cahoon
- Ugly from Uglychart.com
- Alan Farley
- Declan Fallon
- Smita Sadana
- Bill Cara
- Van K. Tharp – Free autographed copies of Van’s book still available! Get yours now!
- Brett Steenbarger
- Eyal Maoz
- Gary B. Smith, the Chartman
- Nusair Bawla (alibawla on StockTickr)
- Dave Landry, Swing Trader
- Jeff White, the Stock Bandit
Do you have suggestions for other traders you’d like to see an interview with? Let us know!