How 3 Retail Traders Built Their Portfolios

Benzinga recently had the chance to catch up with several traders on Peeptrade, a social network for investors that allows users to directly see how others manage their portfolios. We wanted to know about their trading strategy, how they started trading and what they are currently holding.

Rodrigo Santano

Santano, whose portfolio and trades are available here, has always wanted to “keep the money working.” He initially started investing in real estate in the Houston area, but when Hurricane Katrina hit in 2005, the housing he had been flipping went to victims of the storm.

Without a way to make his money work, he turned to the stock market. Eventually he learned about options and taught himself advanced strategies like iron condors, vertical spreads, strangles and straddles.

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In 2008, he started toptraderacademy.com to “teach people how to trade options, and to help my friends overseas trade options.”

For a while, he said, he was able to buy options because they were cheap. Today, he mostly sells them and trades “mostly wherever there’s volatility and liquidity.”

“Control your emotions,” said Santano, who’s still working through some of his open positions from the Brexit-induced volatility. “Be very mechanical about the whole thing. There’s times when there’s opportunity, and times when there’s not.”

Michael Mackenzie

Mackenzie, an IT project manager at a fixed-income asset management firm, started trading in July 2009 because he “thought of it as a good learning opportunity to explore equities and just start doing my own trading with a small account.” And, according to him, he got off to a great start.

“I think my very first trade was natural gas futures ETF for a few hundred bucks and it went up 6 percent the same day,” he said.

Today, Mackenzie trades ETFs and options, although he no longer trades commodities.

“I have learned to not trade commodities because I just don’t have that expertise, and those are the things you learn along the way — what you have a feel for and put some research behind.”

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Like many options trades, Mackenzie likes trading volatility and popular ETFs, like the Powershares QQQ Trust, Series 1 (ETF) QQQ. He also likes shorting some of the volatility ETFs like iPath S&P 500 VIX Short Term Futures TM ETN VXX, and ProShares Trust Ultra VIX Short Term Futures ETF UVXY.

The biggest lesson, he said, is handling the outliers — the events that you haven’t seen before.

“As you go through the first two years of trading, your range of events is very narrow. But as you experience other events where the market drops 10 percent, if you’re in very aggressive vehicles like options or working volatility etfs, I really didn't know how far those things would spike until I’d seen it.

“Some of your strategies can break down. And those are great experiences to have, especially starting early and having a small account. It’s much better to have those experiences early than to be too aggressive later and to have more dollar losses.”

You can view all of Michael’s trades and his full portfolio here.

Ard van der Pijl

Van der Pijl started trading when he was 16. He opened an account with 2,000 euros he’d earned simply because he didn’t know what else to do with it.

“I began trading European penny stocks, but I didn’t know what I was doing,” he said. “After a few trades I learned about spreads and bid/ask, and then I got into futures and forex. I wanted to try the bigger markets.”

Van der Pijl, who today works at Dutch brokerage TradersOnly, has two portfolios, one for trading ETFs with a simple momentum strategy and the other for algorithmic trading that he doesn’t touch at all.

“I grew up with computers, so I started out coding and it was just a natural progression,” he said of the algo.

His trades are available on Peeptrade here.

Right now, the algorithm only trades forex, specifically against the dollar. But even though his main portfolio is automated, van der Pijl, stressed always being aware of your risk.

“You have to know what your money is capable of, and what your risk is. My algorithm sometimes takes more risk than [I] want, but I know that it’s sticking to what I said. I know my max drawdown is 25 percent.”

“Sometimes the wrong trade will get you to the right station,” he added. “When you’re trading, you’ll never know up front whether you’re right or wrong. Sometimes the setup says you’re right and sometimes the setup says you’re wrong. But just by trying, you’re learning. If you do it a lot, you get more experience, you get better at trading.”

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