PDA

View Full Version : Anybody into day trading stocks?



Chopstick
01-04-2006, 10:16 AM
I am starting to get the bug again. Once up a time I made a big pile of cash doing it. I lost it all back in 2000. I am seriously thinking about giving it another go. Besides, talking about making money is a lot better than whining about Bush. /ccboard/images/graemlins/laugh.gif

Sid_Vicious
01-04-2006, 03:32 PM
I forecast that with any significant redeplpoyment form Iraq, that the market would swing around nicely for a day trader. I've considered a stock or two to play with myself even though I've never done it except for a 401k account I had for a while with easy moves between stock and money market funds. Your timing might be right on target Chopstick, at least for some practice accounts for fun.

I'll ask a player I know if he's gotten back into it again and let you know..sid

SpiderMan
01-04-2006, 04:20 PM
Be careful, in the late '90s everyone made "a pile of cash" - long-term investors, day traders, even bums like me. Many of the day traders thought they were talented, but in reality when the market is moving almost monotonically upward you can make random buy/sell choices and still profit. It makes you think you know something, but in reality we were just jumping from horse to horse as the whole herd moved in the same general direction.

Only the ones that got out with their cash were truly talented - around here that seems to be about 10% of individual investors (I wasn't one of them). Look at the brokerages that were the first to start issuing "sell" recommendations - what are those same guys saying now?

SpiderMan

<blockquote><font class="small">Quote Chopstick:</font><hr> I am starting to get the bug again. Once up a time I made a big pile of cash doing it. I lost it all back in 2000. I am seriously thinking about giving it another go. Besides, talking about making money is a lot better than whining about Bush. /ccboard/images/graemlins/laugh.gif <hr /></blockquote>

SnakebyteXX
01-04-2006, 04:36 PM
<blockquote><font class="small">Quote SpiderMan:</font><hr> Be careful, in the late '90s everyone made "a pile of cash" - long-term investors, day traders, even bums like me. Many of the day traders thought they were talented, but in reality when the market is moving almost monotonically upward you can make random buy/sell choices and still profit. It makes you think you know something, but in reality we were just jumping from horse to horse as the whole herd moved in the same general direction.

Only the ones that got out with their cash were truly talented - around here that seems to be about 10% of individual investors (I wasn't one of them). <hr /></blockquote>

Right on the money! My favorite t-shirt logo from that time was: "Never confuse brains with a Bull Market".

Lots of people did and lots of people paid a pretty penny by the time the blood bath was over. In those days you could throw a dart at the stock page and the odds were that it would come up a winner (at least in the short term).

Consider this before you 'jump back in': The stock market is not unlike a high stakes poker game being played by top notch professionals. What are the chances that a novice could sit down with the big boys and out-bluff - out-play - out card-count the pros? Some where between slim and none would be my guess.

With the advent of online trading the broker/adviser was taken out of the loop. That opened the door for every Tom, Dick and Harry with an online account to start buying and selling stock. We used to call those newbies 'easy money' - because that's what they were.

During the hayday of the last Bull market there were gazillions of new shareholders who had learned to hit a few keys on their PC keyboards and buy shares. In many cases the price of the stock they bought went up soon after. The trouble was that they never quite figured out what to do if and when the price went down.

Knowing when to sell (whether the stock has gone up or down in value) and having the discipline to cut your losses when the time calls for it is the key. Too bad so many people couldn't find that key when they needed it the most.

Snake &lt;--- been there done that.

Sid_Vicious
01-04-2006, 04:58 PM
The problem most, including myself during the bubble was falling in love with certain stocks, and did not take a conservative profit when it was there, i.e. looked for the proverbial pot of gold at the end of the rainbow. Seems to me though that a good dinasoar stock could be charted for it's swing factor, bought low to the standards of todays market, then set with a profit limit for sale of say 15%, repurchase(automatic) at the first dip afterwards of 20%, and start over again with the same methodology. If at any time there is an immediate 10% drop after purchase, automatically bail out and ride a different horse for a while. Being conservative is where most everyone I know went wrong...sid

Chopstick
01-05-2006, 07:07 AM
I don't think playing the market is quite the same as playing poker against professionals. 85% of all brokers don't even outperform the S&amp;P 500. My loss in 2000 was the direct result of a broker talking me out of closing a position and putting a stop order in place to lock in my profits. I broke one of the fundamental rules of trading.

1) Never let anyone tell you what to do with your money.

Oh well, I'll never let that happen again. I knew the discipline but never practiced it seriously. It's not that complicated.

2) Never enter any position without an exit strategy.

That means when you buy in, you already set your selling price and have a stop limit in place. For example, you buy a stock and say I want a 2 dollar profit and at most a 1 dollar loss. Don't buy a stock and say I'll just hang on for a while if it goes up. That's how I got nailed, more than once. The discipline is to stick with the plan. If it goes up 2 dollars sell, take the profit you planned on and move on to the next plan. If it goes down the stop order will execute and you will be out. So what if you get whipsawed, it happens.

I was never good at making connections with world events. An example is an earthquake hit Taiwan, I think. The news report said several major factories suffered major damage. Some of them were major suppliers of Drams. The price of ram worldwide jumped up and suddenly all of the stocks for computer manufacturers went crazy. If I had just made the connection I could have cleaned up.

Sid_Vicious
01-05-2006, 07:19 AM
"If I had just made the connection I could have cleaned up."

Same here. I sat and suggested to others that a defense company here locally would be good to get into following the beginning of this terrorism hunt, and that stock doubled in less than two months. Saying and doing are two different things...sid

Fran Crimi
01-05-2006, 10:01 AM
I broke a major rule, too. I did it for two years and did really well day trading the volitile stocks. My mistake was in taking most of the profits and putting them into the blue chips which I thought were secure. I thought at the time I was diversifying. Wrong. LOL. I should have converted some of those profits into cash vehicles. The blue chips plummeted along with the tech stocks and now all I can do is sit on those shares and wait 5 years (or more) for them to recover.

For me, the fun part was doing the research and detecting the trends. I'm thinking about jumping back in again.

Fran

Chopstick
01-05-2006, 01:58 PM
<blockquote><font class="small">Quote Fran Crimi:</font><hr>

For me, the fun part was doing the research and detecting the trends. I'm thinking about jumping back in again.

Fran <hr /></blockquote>

I never learned to do the research well. I mostly stuck with technology companies related to my field. I want to set a paper trading system and run it for a while before I commit any money. I just need to find the tools to do it.

Fran Crimi
01-06-2006, 12:21 AM
<blockquote><font class="small">Quote Chopstick:</font><hr>
I never learned to do the research well. I mostly stuck with technology companies related to my field. I want to set a paper trading system and run it for a while before I commit any money. I just need to find the tools to do it. <hr /></blockquote>

One thing I learned about doing research is to not get bogged down trying to analyze the financial data. It's easy enough to leave that part to the analysts and just factor in 4 or 5 opinions. Unfortunately, most of the people whose opinions I used to read, tragically perished on 9-11. The analysts over at Cantor Fitzgerald were top notch, and now they're all gone.

Once you've found your financial analysts, then you can do the fun stuff. Reading about world events, watching television commercials (believe it or not), etc. I once picked a winner just because I liked their ad campaigns. I felt they would be successful.

I just saw a TV commercial tonight that made me laugh. A teenage girl asked her dad for $80 to buy a pair of jeans because everyone was wearing these particular jeans. The father's ears perked up. "What brand of jeans?" She told him and he went over to his laptop and bought 100 shares of stock in the company. LOL

That's about what it comes down to in the end....my friend who made his fortune trading once told me that in the end it all comes down to what your gut tells you.

Fran

Chopstick
01-06-2006, 06:20 AM
<blockquote><font class="small">Quote Fran Crimi:</font><hr> ...in the end it all comes down to what your gut tells you.

Fran
<hr /></blockquote>

I have one of those. /ccboard/images/graemlins/laugh.gif
I guess if that's true then Deeman must be an outright genious! /ccboard/images/graemlins/blush.gif /ccboard/images/graemlins/laugh.gif

nAz
01-06-2006, 10:05 AM
From the other thread....

<blockquote><font class="small">Quote Chopstick:</font><hr> <blockquote><font class="small">Quote nAz:</font><hr>
THink I'll go and invest in Tungsten... the market is almost right for it... and i want to be filthy rich /ccboard/images/graemlins/smile.gif <hr /></blockquote>

Hmmm, that might not be a bad idea. Tungsten is a very interesting material. Aside from being the primary component in light bulbs it has another use. Rail gun projectiles. We are going to be seeing a lot of those flying around in the next ten years. <hr /></blockquote>


Ya i think it is time to get into it, aside from Rail gun projectiles I understand that the US may stop using led in their ammo and use this metal instead. hey if the military top brass is buying up shares maybe i should too. /ccboard/images/graemlins/smile.gif

Eric.
01-06-2006, 10:42 AM
I think waht Spidey and Snakebyte said is good advice. Daytrading, which is a very different strategy than other ways of playing equities, IS very much like a high stakes poker game. Unless you have good capitalization, you are not gonna compete well against Institutions. In effect, you are the "short stack" at the table. In order to prfit at daytrading, you are looking for minute movements in the stock. .03 cents on a $10 stock in considered "movement". In order to profit with a "short stack", you need to be highly leveraged. That's where the risk to the individual investor comes in. Leverage can cut in both ways. As much as you can profit, is as much as you can lose. Multiplied by, say, 20x. Also, the average investor is not competing with the same tools. If you are trying to daytrade(true daytrading vs. buying&amp; holding and selling that day or the next depending...) with just an online brokerage account with level II quotes, you are not "seeing" the entire market. There are trade done on "level 4", which is for Intitution trades or crosses that can have an impact on the waya particular stock trades.

All I'm saying Charlie, with all due respect, is taht based on listening to you discuss it tells me you are inexperienced. Trading companies, whose product you are familiar with, doesn't give you an edge when daytrading. Also, never trade on your gut instinct. That is the equivalent of shooting a shot in Pool without lining up the shot. That is the worst mistake most investors made during the last Bull market. That's why most 401k's are now 4.01k's.


Eric

Eric.
01-06-2006, 10:59 AM
Just a post script...

I was discussing true daytrading vs. short term buying/selling. Short term buying/selling is much less risky than daytrading but is still no easy thing.


Eric

Fran Crimi
01-06-2006, 11:46 AM
You're right, Eric. I misused the term Day trading. I should have been more specific. I didn't trade every day in order to make my income for the day. But I did hours worth of research every single day for two years and kept up with each and every bit of news regarding the companies I was holding as well as their industries.

I would't exactly compare that to shooting a pool shot without lining it up.

I understand that when you trade by formula you aren't using your gut. The formulas are making your decisions for you.

But with all due respect to the professionals in the field, there's no way I would agree that you can't be successful if you use your gut after you've done the research. I was taught by someone who is one of the best in the business. He's a risk manager and yes, he operates by formulas because that's his job. However, he taught me how to do the research, he taught me how to stay informed and he taught me how to use my gut.

Fran

Eric.
01-06-2006, 12:42 PM
Heya Fran,

I hope I didn't come across as too abrasive, I'm not the final authority on this topic. This just happens to be the only area in life that I have a little knowledge about...

Part of what I was referring to is that true daytrading is mostly based on technical analysis or trading patterns. There is a little more to it, but that is the nuts and bolts. Long or short term buying/selling is based more on company fundamentals. This involves company financials, researching the company's business model, etc. The daytrader rarely cares about things like what was the company's last earnings report, what's their refvenue growth, etc. Even with all the trading tools that the professionals use, daytrading is still a bit of a crap shoot. Of all the money managers I talk to (the one's that are still in the business after the Tech stock crash), nobody did ok with the market crash. There are some that benefitted from the decling market (short sellers) but overall, they are still running negative results due to the extended Bull market.

In my humble opinion, having good gut instincts is a good thing WITH good information. I tend to fall back to gut instincts when I need to make a decision between two companies that are fairly equal, in a competitive market or in the case of, say, Enron, when things just don't add up but you can't put your finger on it. Gut instinct is more of a "street smart" or "Spider sense" type of thing rather than reading tea leaves or making decisions based on emotion.

I hope you didn't feel like I was directing my comments to you, personally, I was only addressing certian points that were brought up.


Eric

Chopstick
01-06-2006, 01:01 PM
These are all valid points. I do recognize my lack of education in these areas as something that needs to be corrected. That's one of the reasons I started this thread. Day trading is a very different strategy. I am not sure I will ever reach that level. I am curious to learn about it though.

For the past year I have been successful as a position trader. I sat down the other day to figure out how long, given my current strategies, it would take for me to make a million dollars. 30 years. Well, that doesn't quite work for me. /ccboard/images/graemlins/laugh.gif

I am interested to learn about ways I can shorten that time period to say ...next week /ccboard/images/graemlins/laugh.gif /ccboard/images/graemlins/laugh.gif

Eric.
01-06-2006, 01:05 PM
<blockquote><font class="small">Quote Chopstick:</font><hr> how long, given my current strategies, it would take for me to make a million dollars.

I am interested to learn about ways I can shorten that time period to say ...next week /ccboard/images/graemlins/laugh.gif /ccboard/images/graemlins/laugh.gif <hr /></blockquote>

A "Mega Millions" lottery ticket.


Eric &gt;buys lottery tickets

Fran Crimi
01-06-2006, 01:35 PM
[ QUOTE ]
I hope I didn't come across as too abrasive, I'm not the final authority on this topic. This just happens to be the only area in life that I have a little knowledge about...
<hr /></blockquote>

Baloney...you're a damn good pool player.

Nah...no offense taken. I just realized my symantics error and didn't want to be misleading.


Fran