If you've followed my series this far, you're on the cusp of thinking like a trader. In fact, you're probably already trading, and if so, I encourage you to do two more things to make your trading a real business.
First, find a good CPA who knows how to handle traders. I suppose there are a few people out there who honestly enjoy filling out their own 1040s and dealing with the various local, state and federal agencies. I am not one of them. Instead, I pay a very nice fellow a fair amount of money each year to do all that.
My job is to trade and send him my results every January in a tidy spreadsheet. His job is to ensure that I have the appropriate corporate entity, that my taxes are paid on time, that all issues and concerns back and forth to the IRS are handled in a timely manner, and that I net as much as I can from my various sources of income. When I get a piece of mail from the IRS, my only job is to fax it to my CPA with a little note that says "Please handle." (While we're talking about the IRS, by the way, a little sidebar. I get asked what I do about wash-sales. My answer is that I don't worry about them. I treat every trade as a separate short-term gain or loss.)
Second, find a good broker. My search in this area was detailed many years ago: You can find Part 1 of the story
here and Part 2
The net is that you want someone not necessarily with the lowest price per trade, but someone who does the best job of enhancing your overall profitability. Once you make that your requirement, you then need a broker who makes few mistakes, can get access to a lot of stocks (to short), who is reliable, who gets very good fills, and always works on your behalf. (For those who ask, my longtime broker is Yamner & Co. They're not for everyone, but they're perfect for what I do.)
Finally, and a little off-topic, I occasionally am asked what I do about health insurance. For the better part of my trading career, my wife was employed, so it didn't matter. When she retired for a short time, though, I used CareFirst BC/BS of Maryland. Most states have independent plans, and it wasn't too expensive to do a "roll-your-own" arrangement.
Oh, and one more thing. I have printed out, and ready to go, a "just-in-case" document that details my trading account balances, account numbers, contacts, etc. It also has insurance contacts, and every other relevant piece of information should I unexpectedly ... umm ... vanish or croak! If I depart suddenly, my wife should be able to pick up exactly where I left off.
While I accompany my daughter to Boston for more college hunting in the coming days, we're going to continue the "all about me!" series with two "best of" columns from the past. They address the oft-asked questions of what to read and some key trading thoughts. I hope you find them useful. I'll be back in full swing on Tuesday!
Today, we have the
Dow Jones Industrial Average
American International Group
Wild Oats Markets
and the 10-year Treasury note.
Charts produced by TC2000, which is a registered trademark of
Worden Brothers Inc.
And that is the final word from the Charles River, where you can forget about the Yankees/Red Sox. The real action in Beantown this weekend is the
Head of the Charles. I'll be watching from the Weeks Bridge, always a good venue to see novice shells colliding! 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.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.
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.
Smith writes a daily technical analysis column for RealMoney.com and also produces a daily premium product for TheStreet.com called The Chartman's Top Stocks --
click here for a free two-week trial. While Gary cannot provide investment advice or recommendations, he invites you to send your feedback to