Hoosier4Life,
Day trading can be a fun hobby and there are probably a few people that actually make a living doing it, but in my opinion it is largely a fad. Whether you want to be involved in the stock market or the real estate market, I would strongly recommend that you pursue something that is a real business, not a fad. There were hundreds of thousands of day traders in the late 90’s before the dot-com bust and they are now all but gone.
Mike
Buy and hold…I mean…Buy and hope?
I don’t think so…
-Mike
I can see how Day Trading could be likened to gambling. I ran across a retired military guy in Japan a couple months ago who started talking to me about his Day Trading. He had lost tens of thousands of dollars once before doing this. He was telling me how he was taking out max. cash advances on credit cards just to trade. He managed to get out of the mess somehow and then said, “yeah, my wife is gonna let me start doing it again.” Is it any surprise lots of people just stay poor?
Its not fad. I know 3 people personally that are making a KILLING day trading every week. Just the other day a guy I talk to made $376,000 in just one day. Hes been making money day trading since the 80’s.
He said " Tell you what Josh, if you really care about making money, save up $30,000 to show me that your serious, and ill show you everything" so I have that going for me.
Now it is true that like 4/5 of people who Day Trade lose money… But I wouldnt say its a fad.
Day Trading is just another word for speculation…Speculation can be grouped into the word gambling…But I’m bias toward the equity markets vs gambling…Horses,Sports,casinos etc…Average investor is down %40+ right now…I’m now up %4 on the year…Am I day trader no , I don’t consider myself to be one…Timing the market is an art,understanding the market is an art that takes years to grasp…Most great traders lose money before they understand what they are doing…What I lost trading my first year I made on friday in 18 minutes…Its all relevant and if you are playing with scared money you will never be a great trader…Doesnt matter if you have 30k or 3mill…And it also helps to have deep pockets to be a trader…And I mean deep…You cant value money like the guy who needs the money to pay his mortgage,kids college,day to day bills etc…Then you will trade scared and trading with emotion is a recipe for disaster…Trading is only useful for quick thinkers who can react on the fly…Trading is not for the weak minded with no conviction…When I talk about possible scenarios happening days in advance I know that my opinion has a very high degree of happening…I have experience and this is my career…The only way to become a great trader is trade and trade with real money…Forget that mental/paper trading bs…No one loses money when they are using hypothetical trades…Yes %90 of day traders end up failing because once they learn how to trade they are broke because they were underfunded to begin with…All the same I highly recommend that NO ONE HERE TAKES UP TRADING…Enjoy the banter here and thats it…You need deep pockets,nerves of steel and a willingness to learn…A good candidate to become a trader is someone who has significant income from elsewhere coming in,have substantial amount of savings,has years of equity market knowledge and filter through tons of information on the fly while executing multiple orders on selected equities simultaneously…But if you do learn this I can promise you there is nothing more rewarding but at the same time nothing more stressful…Like I said most people please…DO NOT TRADE…
less we get drastic intervention prior…russell 2000 is gonna get thrashed at the opening.
-Mike
NO PROBLEM!!! It’s so nice to hear somebody experienced with trading tell the real truth behind trading. I’ll stick to cleaning the roach sh&t off the walls of my low income rental homes. Thanks again!
I think that this week will tell the whole story (10/14/2008). If we show more downside and continued deterioration in consumer confidence we could be down another 1000-1500 points. I am hoping that we at least stabilize cause I know alot of real estate investors are taking a wait and see in the last couple of weeks.
we could be down another 1000-1500 points
We bet the other side of that trade on Friday…Futures and foreign markets are squeezing to the tune of %10 gains…The Hang Seng snapped back %10 the FTSE is up %5 and the American equity futures are running for the hills…Shorts are going to get their b**** squeezed hard this morning…Let’s see if it holds…
I think the tide has already turned. and at about 10k i will getting some of the kiddies outta the pool and picking the best swimmers to go through the rough seas ahead.
rookie your again right about trading its very stressful, especially recently.
the market moved any way it wanted without reason almost.
This is what my plan is: stocks for now, make a few dollars, winter is coming ( better deals). pull some money outta those stocks and buy some properties cheaper.
Real estate is low and will be a great investment at this point. i want to start buying some properties now and see what else pops up as we go. I got 1 property so far, plan on living in it still renovating it at the moment. theres deals out there to be had.
Is anyone ready for another massive sell off? Wow, +1000 points today.
But if you do learn this I can promise you there is nothing more rewarding but at the same time nothing more stressful
It’s the compounding that interests me.
Hypothetical:
A base of $10,000
An average of 1.5% gain per trade
200 Trades
Would that be $40,000? (200 trades x $150 plus the base of $10,000?)
No…not with compounded reinvestment:
$190,000 Pre-Tax
-Mike
Hypothetical:A base of $10,000
An average of 1.5% gain per trade
200 Trades
Would that be $40,000?
200 trades x $150 plus the base of $10,000?
No.
With compounded reinvestment:
$190,000 Pre-Tax
That sounds good, but it’s the same as saying cash flow = rent minus the mortgage payment. It’s not real. In reality, some of those trades will be winners, some will be losers and all will have trading commissions on both ends. The brokerage is a guaranteed winner.
Also, in the real world, I hope that you wouldn’t put all your trading capital on a single trade. That is very risky. Another thing that happens from time to time is that you buy a stock and you’re feeling good when suddenly the news on CNBC is that YOUR stock has been halted. After a few hours, you read the news that the company CEO and CFO are being charged with falsifying the financial reports. When the stock reopens, it’s down 60% and drops more every day.
Stock trading is just like real estate or any other business. It has ups and it has downs. NOTHING IS EVER EASY!
Mike
I think the 1.5% average is a very achievable figure…now if I had said 3% then I’d agree with the assessment of it being “guru” kool-aid.
Winners…loosers…at a 1.5% mean.
Half a penny per share on commissions.
All trading capital on a single trade? No way.
Don’t like individual stocks…much better investment vehicles out there.
When the stock reopens? No…in and out intra-day. Preferably under 30 minutes.
Never said it would be easy.
-Mike
Also, in the real world, I hope that you wouldn’t put all your trading capital on a single trade. That is very risky. Another thing that happens from time to time is that you buy a stock and you’re feeling good when suddenly the news on CNBC is that YOUR stock has been halted. After a few hours, you read the news that the company CEO and CFO are being charged with falsifying the financial reports. When the stock reopens, it’s down 60% and drops more every day.
I guess someone remembers EMLX…What a story behind that one that I dont feel like getting into…In short it traded $130 a share and I believe some punk kid who worked at the PR Newswire was short the stock and getting mauled on it…So he created a false statement that the CEO was stepping down and restating earnings for the last 4 quarters etc…LOL…The stock went from $130 to $30 in minutes and then they halted it with millions of traders short from a very low level only to reopen it at $135 essentially bankrupting every trader who was short the stock…I literally saw grown men crying at their desks…they were wiped out instantly…Trading individual companies especially when its a news driven play can have big consequences…But lets be for real halting a stock is rare if its not news driven…Thats why I always tell people who are hell bent on trading to trade ETF’s only…Never get halted,always track the market,good liquidity,incredible basket of diversification…IMHO there is no point trading anything else…But I truly stand by my earlier statements that I feel no one here should start trading…Even if you make money its a s*** way to make a living…The stress is unreal,the headaches are everyday (making money or not),the pressure to make money,the time you lose outdoors because you are plastered to that screens ALL DAY…Real Estate is a pain also but keep in mind that its nothing compared to trading…Seriously all please dont start trading…
I agree with Rookie. I can’t even IMAGINE what trading for a living involves.
BUT…
Trading and INVESTING are two totally different beasts.
The SMARTEST way for guys like us to make money investing is to simply WAIT…Wait for those points were things get so out of balance, so over sold, that stepping in and buying THE OTHER SIDE of that move ends up being a very high percentage play.
Look no further than GM and Ford last week. Their up almost 100%.
My original plan was to buy Ford Options and hold them until I saw a light at the end of the tunnel. As you all know I purchased the Jan 2010 $7.50 calls at prices from .80 to 1.00. My plan was to convert those options to shares at $7.50…That went out the window last week…When Ford hit $1.80/share (it went even lower) I backed up the truck. My original plan was to own 20,000 to 30,000 shares of Ford at a cost of $150,000 to $200,000. When the stock dropped to UNDER $2.00 I bought 30,000 shares for less than $55K!! I STILL own those January 2010 $7.50 calls. They closed at .80 yesterday, at some point as this market keeps moving up, I’ll simply unload them and get all my money back and a nice profit.
So…by NOT freaking out last week, the investment that I THOUGHT would cost me over $150K ended up being ON SALE for 300% OFF!!
Now…It’s a waiting game…This is what I KNOW…
The economy is going to slow to a point were job loses will rise DRAMATICALLY. This will hurt the car companies even more, BUT…as those job loses CLIMB our GOVERMENT will be under BIG TIME pressure to stop those loses. Letting a HUGE Company like Ford to go out of business in that type of enviroment WILL NOT HAPPEN… about this time the car makers will be hitting a point where they can’t take it anymore…At some point our GOVERMENT will extend a loan program MUCH BIGGER than the current $25 Billion…We will eventually come out of the slowdown and people (as always) will go back to doing the same stupid sh*t they always do. Watch what happens once gas prices get to $2.50/gallon and STAY THERE!!! All of a sudden TRUCKS and SUV’s will start selling again. Don’t get me wrong here…They are not going back to $2.00/ gallon gas levels, but THEY WILL go HIGHER than the current CAN’T GIVE THEM AWAY sales levels.
Anyone with any doubts about this needs to look at a chart of Ford going back to the 1970’s. The stock was actually .75 cents at that point. It would not surprise me to see Ford drop to those levels again. At some point you just have to buy in and not worry about hitting the bottom. Picking bottoms is LUCK, not investing.
Out of ALL the American car companies FORD is set up BETTER than the other two. They HAVE the products (in Europe) and just need the TIME to get set up in the U.S. to build those cars. TIME is what they are working against, BUT…THE U.S. GOVERMENT is holding the WATCH.
If time does run out…Uncle Sam WILL reset that watch…This has ALL happened BEFORE.
Markets came too far too fast…Historically we should gain back %42 of what we lost then a slow gind over the next 2 years losing an astonishing %86…Depression markets are hard,and bear market rallies sucker many…Why would anyone want their money invested in something that can lose or gain %10-%12 in ONE DAY…I can understand from a traders point,volatility is our friend…But to have size money tied into this market day in and day out it has to be nauseating…In all honesty I was waiting for a terrorist attack to occur during the market selling…Thats what is on alot of traders minds now…Hopefully I’m wrong but I feel these lowlifes are plotting on us with the election being so close…Either way up days are better than down…Let’s see where this all goes,but i think the rubber band became quickly stretched in the other direction…Markets need stability not one day wonder rallies that only brings in more suckers into the pyramid scheme…Yesterday was just a band aid for an investor…
So IF, and remember I said IF…you were the type of investor that LOVES being on the other side of the herd…buying out of the money, long duration, QQQQ puts, COULD (I’ll repeat that) COULD set up a very profitable trade, at a very low entry price, should that band snap back???
Anyone not understanding what Rookie is talking about needs to look at charts of the HISTORIC crashes the markets have had in the past. Without exception, they ALL did EXACTLY what we’re seeing today…THEY RALLIED!!! BIG!!! Then REALITY set in regarding the underlying MESS that created the initial CRASH. That’s the long, slow MASSIVE grind DOWN.
This morning’s reality:
Under the plan, the US government would take $250 billion in preferred stock in Bank of America [BAC 25.74 2.95 (+12.94%)], Wells Fargo [WFC 32.67 2.27 (+7.47%)], Citigroup [C 17.50 1.75 (+11.11%)], JPMorgan Chase [JPM 40.69 -1.30 (-3.1%)], Goldman Sachs [GS 118.92 7.92 (+7.14%)], Morgan Stanley [MS 22.10 4.00 (+22.1%)] and Bank of New York [BK 33.07 2.39 (+7.79%)].
Good for a +5% gain after a 10 minute hold of UYG…even after a pre-market gap up of 12.8%.
-Mike<1.5% mean
In all honesty I was waiting for a terrorist attack to occur during the market selling..Thats what is on alot of traders minds now..Hopefully I'm wrong but I feel these lowlifes are plotting on us with the election being so close.
You’re right about that!!! We’re sitting on a powder keg and hoping that there’s not a spark. In addition, a worldwide depression will absolutely KILL our enemies with depressed oil prices. What could bring oil prices back up? A crisis in any oil producing country. From the radicals point of view, attacking Israel would be a double coup. They would get rid of one of their enemies and they would ensure that oil prices would spike. In addition Russia is once again on the prowl and would like to retake their position as a superpower as we lose our position as the world’s only superpower.
Historically, when there’s been a depression, how is it fixed? By removing millions (maybe billions in the next war) of people from the planet. Could a major war be the end result?
Historically we should gain back %42 of what we lost then a slow gind over the next 2 years losing an astonishing %86...Depression markets are hard,and bear market rallies sucker many
If the stock market loses 86% of it’s value over the next two years, millions of people will have essentially lost their retirement. Couple that with the huge job losses that FDJake is talking about and civil unrest might become an understatement.
Things could get quite interesting!
Mike