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Lil Ed
VIP Member
- Jul 15, 2011
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jp2code
Member
- Feb 10, 2018
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I started with Sharebuilder back in 2001 because they offer $4 trades. I learned that selling that stock costs $15 or so, and they did not have the tools that some better sites have. Today, I use E*Trade.
If you buy and sell too fast, you are going to spend too much money in trading fees (unless you are trading several thousand dollars worth at a time). And, unless you have some inside scoop, it's best to hang on to something you have bought for over 3 months. The amount of tax you will owe on your gains is less, and it keeps you from freaking out by watching stocks tick up and down every 15 minutes.
If you buy and sell too fast, you are going to spend too much money in trading fees (unless you are trading several thousand dollars worth at a time). And, unless you have some inside scoop, it's best to hang on to something you have bought for over 3 months. The amount of tax you will owe on your gains is less, and it keeps you from freaking out by watching stocks tick up and down every 15 minutes.
JR Ewing
MuscleHead
- Nov 9, 2012
- 1,329
- 420
I've been investing my own money for nearly a quarter a century, and investing for others for many years as well.
I agree that you're far more likely to do better if you're patient and aren't selling out of all positions daily (day trading) or within a day or two (swing trading). Transaction costs and short term capital gains taxes are likely to have a big impact on your nestegg with such high turnover - particularly if you are not starting off with much $. My best gains come from holding most positions weeks, months, or longer.
One of Buffett's best quotes refers to the fact that one of the market's general rules is that those who are patient usually take the money of those who are impatient. I'd read a few good books such as "The Intelligent Investor", "How To Make Money in Stocks", and "Beating the Street". Diversification, dollar cost averaging, and keeping your emotions in check will help a great deal. It's a good idea to add money to your account every payday, and to consider owning at least 1-2 stocks each from at least 5-6 different sectors at any given time.
I agree that you're far more likely to do better if you're patient and aren't selling out of all positions daily (day trading) or within a day or two (swing trading). Transaction costs and short term capital gains taxes are likely to have a big impact on your nestegg with such high turnover - particularly if you are not starting off with much $. My best gains come from holding most positions weeks, months, or longer.
One of Buffett's best quotes refers to the fact that one of the market's general rules is that those who are patient usually take the money of those who are impatient. I'd read a few good books such as "The Intelligent Investor", "How To Make Money in Stocks", and "Beating the Street". Diversification, dollar cost averaging, and keeping your emotions in check will help a great deal. It's a good idea to add money to your account every payday, and to consider owning at least 1-2 stocks each from at least 5-6 different sectors at any given time.
BLTC
VIP Member
- Dec 23, 2010
- 753
- 245
There are many excellent traders on FB and youtube that spend hours discussing their brand of technical analysis. You don't have to spend a dime to learn how to trade but you do have to invest time....A LOT of it researching if you really want to be successful. There is one way to avoid this and that's to get with a trader that sells his advice in the form of a paid subscription but you still need to invest A LOT of time to find one that isn't full of shit and has a winning record.
The biggest thing is to not trade emotionally which leads to trading impulsively. Establish/adopt a set of rules that you never/rarely deviate from. Realize that trading is a marathon and not a sprint. It's a lot like gaining muscle...slow and steady wins the race. The caveat to this is the occasional bull market explosion like what just happened in the MJ space and is about 3 weeks away from happening in the crypto/digital asset space. The MJ rally was short but powerful. If you were in early and sold on the long daily topping wicks you made out HUGE. Most however were buying at that time not remembering the phrase "buy the rumor and sell the news." MJ stocks will come back but not with the FOMO we just witnessed. Crypto on the other hand is an entirely new asset class the market makers are just now getting into. NOW is the time to lay the pipe in that space and load up. Yes, there will be run ups and pull backs and timing them will NOT be easy however if you have a good set of rules and stick to them it will keep you on the right side of the ball.
Another thing to keep in mind is the market makers jerk markets around based on the time of year. For instance, right now everyone is panicking about a market crash because of several different inputs. What they fail to realize is the markets ALWAYS pull back in October to set up for the Xmass rally which begins the week of black Friday and ends the week of Xmass. This phenomenon is as regular as a chicks monthly cycle. Instead of selling now like most sheep are one should be buying on those 100 pt down days on the S&P.
The biggest thing is to not trade emotionally which leads to trading impulsively. Establish/adopt a set of rules that you never/rarely deviate from. Realize that trading is a marathon and not a sprint. It's a lot like gaining muscle...slow and steady wins the race. The caveat to this is the occasional bull market explosion like what just happened in the MJ space and is about 3 weeks away from happening in the crypto/digital asset space. The MJ rally was short but powerful. If you were in early and sold on the long daily topping wicks you made out HUGE. Most however were buying at that time not remembering the phrase "buy the rumor and sell the news." MJ stocks will come back but not with the FOMO we just witnessed. Crypto on the other hand is an entirely new asset class the market makers are just now getting into. NOW is the time to lay the pipe in that space and load up. Yes, there will be run ups and pull backs and timing them will NOT be easy however if you have a good set of rules and stick to them it will keep you on the right side of the ball.
Another thing to keep in mind is the market makers jerk markets around based on the time of year. For instance, right now everyone is panicking about a market crash because of several different inputs. What they fail to realize is the markets ALWAYS pull back in October to set up for the Xmass rally which begins the week of black Friday and ends the week of Xmass. This phenomenon is as regular as a chicks monthly cycle. Instead of selling now like most sheep are one should be buying on those 100 pt down days on the S&P.
JR Ewing
MuscleHead
- Nov 9, 2012
- 1,329
- 420
I would generally avoid taking specific advice from people online such as "buy this or that stock (or other investment)" or "go to cash" or "short the market" or whatever. Most people online who are making a single recommendation are either doing so so that they can do the opposite (buy lower or sell higher than you will), or else they probably aren't otherwise the best person to take specific advice from. Investing is a highly individual thing, and you can be sure that no registered investment advisor will tell you to put everything into 1-2 ideas, or to otherwise give you a specific financial plan without knowing about your unique situation - time frames, risk tolerance, specific goals, amount of $ you have, etc.
It would have been great to buy bitcoin at $5-10k or lower, and to have sold most of it at $15-20k. It would have sucked to have bought it at $15-20k and to still be holding it. There's a good chance that those who are trying to encourage you to invest heavily in it are in the latter camp. The smartest and richest among the tech savvy guys in the world who aren't directly involved in trying to profit directly from the coins seem to all say that they invested 1-5% of their nestegg in it early on - and most say they've taken some profits on the way up. I have dabbled in investments related to the coins, but it is not something I'd invest heavily in. If you're going to invest heavily in any one idea, I'd suggest you really, really know what you're doing. And you'd better hope the time is right for that idea. And if that idea is highly volatile, it may be a very difficult idea to invest in.
If you're looking for someone to pay for advice, I think you'd probably be better off meeting with a local professional in person and giving them your $ than to roll the dice with paying a stranger online for trading tips or specific recommendations. If someone has some great system that beats the market and makes them huge returns with minimal risk, they aren't likely to sell it to a few small investors for a few bucks a month. They're either going to keep it secret and turn themselves into mega millionaires, or they're going to start a fund managing the money of super rich folks and turn themselves into a billionaire, charging a 2-5% management fee, and a 20-50% performance fee.
I would also be wary of assuming that just because something happened during a certain month last year and the year before that it is somehow guaranteed to happen this year and every year after. NOTHING happens the exact same way EVERY year, and even if it happens a certain way 90% of the time there's no guarantee it will happen the same way this year or next year.
Another thing to keep in mind when someone says that they made big returns this month or this year (even if they can verify it) is that they may be using lots of leverage, which is highly risky. If your one big idea this month is right and makes you 20% dollar for dollar over the next 30 days, your returns would have been 10 times higher if you had been juiced up $10 to $1. But if your idea was wrong and lost you 10%, you'd be wiped out.
About the only people who I listen to seriously or follow closely are the guys who have done the best - Buffett, Icahn, Peltz, Dalio, Cohen, and a few others. Buffett has averaged 20% a year for over 50 years without using leverage.
I've done very well investing a few bucks in the OPPOSITE of what Citron Research says. When Andrew left says he's short this or that stock, it tends to briefly sell off heavily. I often go in and buy it after it drops that same day. It almost always goes right back up. And if he says (rarely)he's long a particular stock, I may carefully make a short term bet against the stock after it has jumped up on his recommendation. I believe that he says publicly that he is short stocks that he wants to buy (cheaper), and that he is either dumping or shorting the occasional stock he says he's long.
Jim Simons's Renaissance Technologies Medallion Fund averaged something like 40% per year over a quarter of a century, but they were leveraged something like $17-18 to $1 - so dollar for dollar their returns were more like 2-2.5%... When Medallion made 160% shorting the market in 2008, their dollar for dollar returns were more like 9-10%. If anything, I am far more impressed by Medallion's lack of volatility and ability to time the market. Simons and DE Shaw were 2 of the early pioneers of automated high frequency trading - I'd leave the constant day trading up to those who have the many millions to spend on high powered computer systems (and high powered staffs of people to oversee it all), and many billions under management to absorb the high transaction costs and high taxes.
Almost no one can time the market successfully and consistently - most of the best investors are "bottom up" - they focus on finding the best investments, and worry little if any about what the broad markets may do. I may be buying on a day when the markets are down 1-2% or more, but if there are any stocks in my portfolio that may have happened to shoot up big on a bad market day, or if there is a sudden fundamental change in one of my holdings that makes it no longer such a good investment, I'm likely taking profits on such holdings. Steve Cohen has talked about a theory he learned in business school about a stock's performance being 40% market driven, 30% industry / sector driven, and 30% driven by the company itself. If you believe this theory to be accurate, it tells you that up to 60% of a stock's performance is independent of what the broad markets will do.
It would have been great to buy bitcoin at $5-10k or lower, and to have sold most of it at $15-20k. It would have sucked to have bought it at $15-20k and to still be holding it. There's a good chance that those who are trying to encourage you to invest heavily in it are in the latter camp. The smartest and richest among the tech savvy guys in the world who aren't directly involved in trying to profit directly from the coins seem to all say that they invested 1-5% of their nestegg in it early on - and most say they've taken some profits on the way up. I have dabbled in investments related to the coins, but it is not something I'd invest heavily in. If you're going to invest heavily in any one idea, I'd suggest you really, really know what you're doing. And you'd better hope the time is right for that idea. And if that idea is highly volatile, it may be a very difficult idea to invest in.
If you're looking for someone to pay for advice, I think you'd probably be better off meeting with a local professional in person and giving them your $ than to roll the dice with paying a stranger online for trading tips or specific recommendations. If someone has some great system that beats the market and makes them huge returns with minimal risk, they aren't likely to sell it to a few small investors for a few bucks a month. They're either going to keep it secret and turn themselves into mega millionaires, or they're going to start a fund managing the money of super rich folks and turn themselves into a billionaire, charging a 2-5% management fee, and a 20-50% performance fee.
I would also be wary of assuming that just because something happened during a certain month last year and the year before that it is somehow guaranteed to happen this year and every year after. NOTHING happens the exact same way EVERY year, and even if it happens a certain way 90% of the time there's no guarantee it will happen the same way this year or next year.
Another thing to keep in mind when someone says that they made big returns this month or this year (even if they can verify it) is that they may be using lots of leverage, which is highly risky. If your one big idea this month is right and makes you 20% dollar for dollar over the next 30 days, your returns would have been 10 times higher if you had been juiced up $10 to $1. But if your idea was wrong and lost you 10%, you'd be wiped out.
About the only people who I listen to seriously or follow closely are the guys who have done the best - Buffett, Icahn, Peltz, Dalio, Cohen, and a few others. Buffett has averaged 20% a year for over 50 years without using leverage.
I've done very well investing a few bucks in the OPPOSITE of what Citron Research says. When Andrew left says he's short this or that stock, it tends to briefly sell off heavily. I often go in and buy it after it drops that same day. It almost always goes right back up. And if he says (rarely)he's long a particular stock, I may carefully make a short term bet against the stock after it has jumped up on his recommendation. I believe that he says publicly that he is short stocks that he wants to buy (cheaper), and that he is either dumping or shorting the occasional stock he says he's long.
Jim Simons's Renaissance Technologies Medallion Fund averaged something like 40% per year over a quarter of a century, but they were leveraged something like $17-18 to $1 - so dollar for dollar their returns were more like 2-2.5%... When Medallion made 160% shorting the market in 2008, their dollar for dollar returns were more like 9-10%. If anything, I am far more impressed by Medallion's lack of volatility and ability to time the market. Simons and DE Shaw were 2 of the early pioneers of automated high frequency trading - I'd leave the constant day trading up to those who have the many millions to spend on high powered computer systems (and high powered staffs of people to oversee it all), and many billions under management to absorb the high transaction costs and high taxes.
Almost no one can time the market successfully and consistently - most of the best investors are "bottom up" - they focus on finding the best investments, and worry little if any about what the broad markets may do. I may be buying on a day when the markets are down 1-2% or more, but if there are any stocks in my portfolio that may have happened to shoot up big on a bad market day, or if there is a sudden fundamental change in one of my holdings that makes it no longer such a good investment, I'm likely taking profits on such holdings. Steve Cohen has talked about a theory he learned in business school about a stock's performance being 40% market driven, 30% industry / sector driven, and 30% driven by the company itself. If you believe this theory to be accurate, it tells you that up to 60% of a stock's performance is independent of what the broad markets will do.
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tommyguns2
Senior Moderators
Staff Member
- Dec 25, 2010
- 6,337
- 5,061
I don't try to time the market. Smarter people than me have failed attempting to do so. Have some been successful? Sure. In every Gaussian distribution, there are a few percent of the distribution that have fantastic results with respect to a particular event, but those same people rarely are at the same high point of the distribution year over year.
I have index mutual funds and I dollar cost average. It isn't sexy, but I'm the tortoise rather than the hare. Slow and steady wins the race.
I have index mutual funds and I dollar cost average. It isn't sexy, but I'm the tortoise rather than the hare. Slow and steady wins the race.
DungeonDweller
VIP Member
- Mar 21, 2017
- 1,534
- 1,335
I did day trading for a year or so, using Bollinger Bands, chart patterns, etc. Did okay until I forgot to set a stop loss on Monster.com one day and lost most my gains for the month. You can make money but it takes work.
My biggest gain ever was buying Amex when I heard Buffet said he bought a bunch because it was way undervalued.
My biggest gain ever was buying Amex when I heard Buffet said he bought a bunch because it was way undervalued.
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