Getting From There to Here, Reprise

From kindergarten through 12th grade, and then from undergraduate through graduate school, not once did I ever sit back and think, "I'd like to become a trader." In fact, not only did it never enter my mind, I'm not sure I could even identify it as a profession. Which prompts the question, of course, how did I get here?

I'd like to say it was some sort of amazing journey, but it wasn't. Like most people, I just evolved into it. The beginning was fairly straightforward. When I got married many years ago, I had almost no money saved up. My wife did, however, with about $25,000 invested in an assortment of stocks. Mostly dogs, as I recall, which were doing nothing.

Coincidentally, I was spending a lot of time working on behalf of IBM (IBM Quote) with customers like Food Lion, Wal-Mart (WMT Quote) and Albertsons (ABS Quote), and I figured I could surely make more money investing in those companies than I could with Nancy's "pots and pans" portfolio.

Of course, this was the mid-'80s, so I'm not sure if it was a matter of good stocks or good timing. No matter, as the money I made in both Food Lion -- a go-go stock at the time -- and Wal-Mart convinced me I could make a decent buck in the market.

Note, though, that I was primarily a fundamental investor. I had read Peter Lynch's One Up on Wall Street, and I still recall reciting Warren Buffett's words back to my broker when I told him my holding period for Wal-Mart was forever. I figured I might as well copy the best.

Of course, few have done well in the market copying someone else (as so many Warren Buffett wannabees have discovered), and after seeing a sharp drawdown in my Wal-Mart position, I noticed that if I had sold when the stock closed below its 50-day moving average, my return would have been much higher than what I actually netted.

That one observation planted the seed for further investigation, and I specifically sought out William O'Neil's How to Make Money in Stocks, which became my bible for quite a while.

O'Neill, though, likes to mix fundamentals with technicals, and while that approach has many admirers, I figured just a raw TA-only angle could yield results just as good, with a lot less work. That thinking is pretty much where I am today, although I discovered a variety of nuances along the way that helped shape my current approach. More on that approach and my trading philosophy tomorrow.

Today, the Nasdaq Composite, Amazon.com (AMZN Quote), Power Integrations (POWI Quote), Silicon Laboratories (SLAB Quote), Gold Fields Ltd. (GFI Quote), and Apple Computer (AAPL Quote).

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Charts produced by TC2000, which is a registered trademark of Worden Brothers Inc.

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And that is the final word from Yankee Stadium, where I'll admit this is just about the time of year I start tuning into baseball. Can't do better, though, than kicking off my season with the Yanks taking the BoSox in five! And don't forget -- now is a great time to learn how to make bigger, faster profits with technical analysis and charting. Get a free trial of my newsletter, The Chartman's Top Stocks, and follow along with me.