Reader Interview: My $10,000 Reader Paul Caruso Shares His Background

I am currently working for the Office of the Mayor. I am the Records Management Officer for the Mayor’s Record Center. I am also studying for the Series 7 and seeking sponsorship.

I received a small settlement from an accident case. The lawyer recommended when I turned 18 that my father should invest my money into a mutual fund.

I got involved in the stock market when I was 19 years old, solely as a long-term buy and hold investor at first.  I would say by mid-year of 1999 or so, I started to get more into the trading aspects of the stock market.

I trade chart patterns combined with a few favorite indicators.  I don’t use fundamentals at all.  I look for a pattern first,  say an Ascending Triangle, then wait, for the indicators to cross/turn positively before entering.  When we had a bull market, many patterns you were able to front run, before the break out with volume.  I tweaked my approach early January of this year.  I now wait for the breakout with above average volume, and if the indicators are all aligned, I buy.  This bear market is nothing to fool around with, so I take profits quickly within days or less depending on the circumstances.

I don’t feel trading is for everyone.  In my mind, you need to have some type of passion for the market and be willing to set time aside. I put aside a few hours on Saturday and during the week looking into the progress and the potential of particular positions.  My Watch lists are created each week, all year round, regardless of whether the stock market is running up to the new highs or down to the new lows.  Trading doesn’t get tossed to the side for great weather or a hot date either.

Too many people I have dealt with, on or off-line, want to learn about trading, but with this gambling mentality of fast money.   Also most of all them are not willing to put the time into the whole process,  looking up various topics, studying methods, books etc.

1. Sharing views on the markets or stocks with people all over the country.
2. Helping a few traders in my time from a bad trade before too late.  I never had a person I could go to so,  it’s a great feeling knowing you helped someone preserving their hard earned capital.
3. The feeling I get inside when I see that chart pattern, drown out all the other news noise, and make that profitable trade.

My best trade had to be my first year of trading. I bought PPRO “PurchasePro.com” at 27+ and sold at 115.  I recall back in the day, the B2B sector had a whole lot of hype and momentum.

My worse trade – I would say buying AOL as it was buying Time Warner. I owned AOL one or two times before and I did well.  I increased my position little by little until I had 100 shares, expecting a nice bounce back.  My trade turned into an investment as this merger became the worst of all time, and the price of AOL declined so rapidly I never could get out at a reasonable price. A lesson learned early on right there.