Investing in Oil?

[C T J]

If you are investing in a risky company, something to do for insurance is to put a trailing stop on it.

.

what happens when your trailing stop gets hit but your reason/conditions for entry are still valid?

 

[Dex]

I personally think oil is trying to hold around $50 right now. I know all the smarty pants in Wall Street say it's going lower but we have all the reasons in the world to be lower and we aren't. I think we'll see oil try and stabilize above $50 like we are seeing now.

ROYT is a good stock that pays a nice dividend. To expand on what JR said, STTX is low risk. Even if you risk $500 you can buy yourself 8k shares. If it goes up a buck you just made $7500. Not all penny stocks are potential winners. STTX actually has reserves and some production.

If you don't know oil stay away from futures. You need 5k per contract to hold overnight and with how volatile is it right now I wouldn't hold oil. I wouldn't be able to sleep at night. You could get into a ETF like USO but it's limited. If oil goes back up and stabilizes the companies bringing on new production and reserves will move the stock price.

 

[Turbolag]

what happens when your trailing stop gets hit but your reason/conditions for entry are still valid?

Personally, as long as I made some money from the stock, then Im fine walking away. I was given a tip that you should accept the gains you can get and don't get greedy. Take small amounts and walk away and don't think twice. I wouldn't put the stop on until it's a decent amount above what bought in for.

I might get out at $18 a share, but if I had waited I might have gotten $25 a share, but on the flip side, it could take a big hit and go down to $5 a share. If I bought in at say $10, Im fine selling at 18$-20.

That's just me though.

 

[C T J]

Personally, as long as I made some money from the stock, then Im fine walking away. I was given a tip that you should accept the gains you can get and don't get greedy. Take small amounts and walk away and don't think twice. I wouldn't put the stop on until it's a decent amount above what bought in for.

I might get out at $18 a share, but if I had waited I might have gotten $25 a share, but on the flip side, it could take a big hit and go down to $5 a share. If I bought in at say $10, Im fine selling at 18$-20.

That's just me though.

Maximizing gains and being greedy are two different things though. In a zero sum game, maximizing results is a must to keep your profit factor above 0.
Because you're going to have losers...are you going to be able to cut your losers as quickly as you cut your gains? Psychologically, most investors/traders
have a real issue with this. We are not wired that way. The cliche is cut your losers, let your winners run.
As simple as that sounds, it's very true. I see a trailing stop as an attempt to let your winner run but it also stops my trade based on a monetary/arbitrary amount, and not what is actually occurring in the market.

 

[Turbolag]

Maximizing gains and being greedy are two different things though. In a zero sum game, maximizing results is a must to keep your profit factor above 0.
Because you're going to have losers...are you going to be able to cut your losers as quickly as you cut your gains? Psychologically, most investors/traders
have a real issue with this. We are not wired that way. The cliche is cut your losers, let your winners run.
As simple as that sounds, it's very true. I see a trailing stop as an attempt to let your winner run but it also stops my trade based on a monetary/arbitrary amount, and not what is actually occurring in the market.

I think I see where you're coming from. If the stock is at for example, $18, and you put a $1 dollar stop on it, and let's say the company has a bad following week and dips down to $15. Then you're out. But, let's say the following week they release a new product, and their price goes up to $25. Then you've lost out on some profit.

So how do you minimize this? Just follow the stock daily, and try to be on top of the companies actions?

If I remember right, didn't you say you were a trader or investor?

 

[Dex]

Maximizing gains and being greedy are two different things though. In a zero sum game, maximizing results is a must to keep your profit factor above 0.
Because you're going to have losers...are you going to be able to cut your losers as quickly as you cut your gains? Psychologically, most investors/traders
have a real issue with this. We are not wired that way. The cliche is cut your losers, let your winners run.
As simple as that sounds, it's very true. I see a trailing stop as an attempt to let your winner run but it also stops my trade based on a monetary/arbitrary amount, and not what is actually occurring in the market.

This is one of the things I have struggled with as a day trader and every other trader out there. Letting winners run is harder than the non-trader understands. Same with cuttings losses. You can have a bullet proof trading plan and people will still manage to **** it up. Dealing with the emotions of putting your money on the line is harder than you think. Trading is the only job where when you have a bad day you actually lose money.

You have 1000 shares and XYZ company goes up a buck, you're now up $1000. Now what do you do? Ok sell it, it's $1,000 right? You sell it and right after that it breaks out and runs 5 bucks. You just missed out on $4,000!

Same scenario but this time you don't sell. You watch it come back a little...up $800... A little more... Then you think to yourself, ok...I won't lose more than $500. Keep comin down and then you move your stop cause it's BOUND TO GO BACK UP. Then walaaaa you're even or losing money.

People who want to get into the stock market have success at first and then almost always lose their money. They have no plan and no way of analyzing charts or even financials for a long term investment. Investing or trading leads to a life of constant REGRET. If you stick to a plan and execute it exactly how you plan on doing it you can eliminate some of that. There will always be money left on the table. If you have money to invest be prepared to lose it because if you're investing thinking you'll be the next Warren Buffet save your money. If you're serious about it spend a year or two studying and paper trading. Or give it to a company you can trust to invest it wisely.

 

[C T J]

I think I see where you're coming from. If the stock is at for example, $18, and you put a $1 dollar stop on it, and let's say the company has a bad following week and dips down to $15. Then you're out. But, let's say the following week they release a new product, and their price goes up to $25. Then you've lost out on some profit.

So how do you minimize this? Just follow the stock daily, and try to be on top of the companies actions?

If I remember right, didn't you say you were a trader or investor?

There are some things you just can't avoid. Better to just take the loss and regroup...or you can go in lighter and have a wider stop to allow for volatility.
Let the trade go your way and add to the winner. I never add to a loser.
You just never know what's going to happen....
Yes, I trade and consult traders regarding strategy development and psychological risk.

 

[graniteman]

Maximizing gains and being greedy are two different things though. In a zero sum game, maximizing results is a must to keep your profit factor above 0.
Because you're going to have losers...are you going to be able to cut your losers as quickly as you cut your gains? Psychologically, most investors/traders
have a real issue with this. We are not wired that way. The cliche is cut your losers, let your winners run.
As simple as that sounds, it's very true. I see a trailing stop as an attempt to let your winner run but it also stops my trade based on a monetary/arbitrary amount, and not what is actually occurring in the market.

''GREED..is Good''

 

[graniteman]

Jr laying down some Knowledge.

If you are investing in a risky company, something to do for insurance is to put a trailing stop on it.

WWE stock is going up right now, and once or if it gets to the number I'm waiting on, I'm going to put a trailing stop of $1 or $2 on it.

Not trying to sound like an authority, its just a suggestion.

Putting money in a ''risky company isn't investing it's a gamble. Only put in what you can afford to lose. Trailing stops are fine BUT..a risky stock can hit the floor before your stop activates, you also have to watch the after hours trading Turbo. Most companies you have to re-new your after hours stops every day.
Stick with earners unless you have the cash to play with

This is one of the things I have struggled with as a day trader and every other trader out there. Letting winners run is harder than the non-trader understands. Same with cuttings losses. You can have a bullet proof trading plan and people will still manage to **** it up. Dealing with the emotions of putting your money on the line is harder than you think. Trading is the only job where when you have a bad day you actually lose money.

You have 1000 shares and XYZ company goes up a buck, you're now up $1000. Now what do you do? Ok sell it, it's $1,000 right? You sell it and right after that it breaks out and runs 5 bucks. You just missed out on $4,000!

Same scenario but this time you don't sell. You watch it come back a little...up $800... A little more... Then you think to yourself, ok...I won't lose more than $500. Keep comin down and then you move your stop cause it's BOUND TO GO BACK UP. Then walaaaa you're even or losing money.

People who want to get into the stock market have success at first and then almost always lose their money. They have no plan and no way of analyzing charts or even financials for a long term investment. Investing or trading leads to a life of constant REGRET. If you stick to a plan and execute it exactly how you plan on doing it you can eliminate some of that. There will always be money left on the table. If you have money to invest be prepared to lose it because if you're investing thinking you'll be the next Warren Buffet save your money. If you're serious about it spend a year or two studying and paper trading. Or give it to a company you can trust to invest it wisely.

Very True!! Sooo many regrets but they are also learning tools. Don't mean to sound harsh but the examples you gave sound like a lack of research on the company , product and financials. 9x's out of 10 the type of company you are talking about above is a shell of a comapny , a shell company. If there is no serious backers\partners or a strong balance sheet , it IS a gamble. If the big boys are gambling their mopney on it , it's probably a good investment.
There's usually a time period that you expect to see the stock move.
Good example, Mannkind, 1st inhaled insulin product to be approved Afrezza I believe. Mannkind was shot down 3 x's if I remember right and was expected to be approved. The FDA had given them a good report and it looked all but certain they would be approved. In fact they were! BUT had no cash or infrastructure to get it to market. I stayed in for the ride up til approval and bailed. Nice lil profit...
I'm just saying research is the key, knowing the companies balance sheet, investors and if the product is really a winner. Everything else is pure gambling


For the record...PAY..Verifone is on the move. 2015 is going to be their braekout year...

 

[fixxer]

I personally think oil is trying to hold around $50 right now. I know all the smarty pants in Wall Street say it's going lower but we have all the reasons in the world to be lower and we aren't. I think we'll see oil try and stabilize above $50 like we are seeing now.

ROYT is a good stock that pays a nice dividend. To expand on what JR said, STTX is low risk. Even if you risk $500 you can buy yourself 8k shares. If it goes up a buck you just made $7500. Not all penny stocks are potential winners. STTX actually has reserves and some production.

I think the oil play is mostly about picking the right company. All the fracking companies are hurting very badly right now. Pick the one best suited to survive and come out on the other side of this in first place.

JR didn't say STTX is low risk, he said the polar opposite. You can go all over the stock market investing money here and there with the mentality "oh well if it goes up a buck..." and just be regularly throwing away money. That's what he's saying.

 

[JR Ewing]

I noticed a couple of errors in my post from yesterday (long week)...

Regarding buying STTX, I made a typo when I said $10-20k from 8 cents to $80.... I meant from 8 cents to eight bucks - the zero was a mistake... VERY unlikely an 8 cent stock will go to $80. 8 dollars is a stretch.

The point with something like that is to play it lightly. Like 0.1% of your nestegg or less. As a general rule, I tend to buy lightly any company that I can write a check to buy out entirely.

I rarely go above 5% on any one company for any length of time, and most positions are smaller.


Also, just to clarify in my example - I'd probably put $1-2k EACH into several different onshore drillers, along with the other positions I mentioned. That may not have been clear from the way I typed it yesterday.

And as far as using a big integrated company as a pretty good sized position as a hedge against volatility, I actually like Chevron better than Exxon personally. I've owned Chevron in the not-too-distant past. Of course Buffett owns some Exxon.


Turbo, I've had longrange puts (short options) on WWE since it was north of $18. I increased that yesterday.

 

[JR Ewing]

As for commodities, I'm personally not big on futures. Some may disagree, but I prefer to use good, solid ETFs for exposure to gold, oil, nat gas, silver, ag, platinum & palladium on occasion, etc. GLD, SLV, OIL, etc.

I avoid those that borrow heavily.