Stocks

[steve38]

I think a tiny percentage can make it and you may be one of the few that does but i've read statistics from multiple sources stating about 90+ % of the day traders losing over the long run. The market has been on a upswing for a good 7 years now but i want to see people making it during the down years as well. Furthermore, if he was profitable for two years he would have kept at it.

To me atleast day trading is very difficult and the failure rate is so high that there is a better way to make money in the market in the long run which is also a lot easier as well. The power of compounding cant be duplicated by day trading.

The success rate is no different than any business. But I understand where you're coming from, because not everyone has a tolerance for risk....not everyone wants to be a business owner. Investors think traders are silly, and vice versa...much like medical doctors and chiropractors are at odds. Neither is right nor wrong. But if the market wasn't in full "bull mode" now, you might not be as confident with your "investing is better" assertions.

 

[grey poupon]

As one who makes a living by timing the market, I respectfully disagree. Short-term trading is no different than any business where the vast majority fail within 5 years. He said he was profitable, so he's on the right track...and probably not off by much. Likely some self-sabotage or other psych issues holding him back.

But you're right about the index ETF's (preferably the SPY) as being the safest, easiest, and least costly vehicle for newbies who just want to "buy and hope."

The psych issue is a big part. I have trouble letting my winners run and selling too early.

 

[steve38]

The psych issue is a big part. I have trouble letting my winners run and selling too early.

I had the same issue with longer-term trades, so I changed to shorter-term (less than an hour) and 1:1 Risk/reward. I just wait for good entry, set my brackets, and sometimes just walk away for a half hour. Either hits target, stop, or times out. Then move on to the next trade. This is trading e-mini's, either ES or NQ.

 

[Hotora86]

I've been working in the financial business / exchange coverage / fund admin for 5+ years now and trust me when I tell you it's a goddamn lottery (if you don't have enough assets to influence the market yourself).

 

[MMA IAN]

You're probably just better off getting born to rich parents


Seriously though, I dunno about MJ in the US. It's something that's just starting to come into effect here in Aus.

My old man is a big stock trader. My brother trades futures.

Personally I like crisis investing.

 

[Simian Raticus]

Index funds.

Most of what I buy is index funds and I play the long game. I set aside aside a small amount to speculate with just for fun, but for the most part - index funds.

Trying to beat the market is how you lose your money. There aren't even that many professionals that can do it consistently.

You should look at investing as a way to grow your wealth gradually, not a get rich quick.

 

[KBE6EKCTAH_CCP]

The success rate is no different than any business. But I understand where you're coming from, because not everyone has a tolerance for risk....not everyone wants to be a business owner. Investors think traders are silly, and vice versa...much like medical doctors and chiropractors are at odds. Neither is right nor wrong. But if the market wasn't in full "bull mode" now, you might not be as confident with your "investing is better" assertions.

I agree with him.

Short term volatility is random.

Fundamental research is based on facts.

Nobody can tell what the market is going to do, but hand me the financials of a company and I'll be able to tell you within a minute if this company is shit or likely good.

Then give me a day and I'll tell you without a doubt if this company is likely to be a good long term investment.

Looking at charts is rubbish. Trying to anticipate the market is rubbish. Why not concentrate instead on things we can truly understand like quality of earnings, balance sheet structure and cash generation of a business?

Investing does not equal speculating.

BMW's shares dropped like 30% since I bought them. No fucks given because the company's fundamentals improved during that period. I know I own something that is more valuable, even if the market currently doesn't think so. But as long as I don't sell, IDGAF.

 

[steve38]

To each his own, with regards to trading or investing, but there are certain market movements that happen over and over again, on various time frames. Market timing is a real thing, whether you guys want to believe it or not. Yes, it's gambling...but it's waiting until you're dealt two face cards in Blackjack, then placing your bet....or waiting for AA or KK to play, without losing your blinds.

I can see the value in investing long-term, whereas you investors are basically ignorant of short-term speculation and know nothing of that which you speak negatively. Happy investing, or trading, to all of you. Time for me to get to work.

 

[sub_thug]

Index funds.

Most of what I buy is index funds and I play the long game. I set aside aside a small amount to speculate with just for fun, but for the most part - index funds.

Trying to beat the market is how you lose your money. There aren't even that many professionals that can do it consistently.

You should look at investing as a way to grow your wealth gradually, not a get rich quick.

So many people lose their shirts instead of adhering to this simple idea. If you play hyper-aggressively, you can double your money in a year. You can also lose everything. I'm much more comfortable making $10-30k every year for the rest of my life.

TS, diversify yourself. Get into lots of different sectors of the economy. Tech, pharma, finances, and consumer products are all good places to invest. From there, you can continue to diversify through futures, indexes, purchasing real estate, bonds, and precious metals. But that's the big-boy stuff. Start with a few big players in sectors that you see doing well in the future. That's how you make money. Especially if you are starting off, look for stocks that are going to pay a dividend. From there, just jump in either during a volatile period (I made so much money in the 3 days after Brexit), or jump in on an upswing when a stock is taking off.

I strongly advise against getting into fashion/textiles. The market changes too much for my liking. People's tastes change too much. Brands like FUBU and JNCO come and go, and bigger brands like Under Armor and Nike are obviously not impervious to watching their stocks tank. I stay out of this altogether, so take that advice for what it's worth.

 

[indo80]

The success rate is no different than any business. But I understand where you're coming from, because not everyone has a tolerance for risk....not everyone wants to be a business owner. Investors think traders are silly, and vice versa...much like medical doctors and chiropractors are at odds. Neither is right nor wrong. But if the market wasn't in full "bull mode" now, you might not be as confident with your "investing is better" assertions.

Dont take it the wrong way as you are right different ideas work for different folks. I am sure there are some day traders that beat the market in the long run but one of the great things about index funds or dividend stocks is that your dividends automatically get reinvested and you accumulate more shares when the market is down. Compounding works wonders over the long run.

Have you done a comparative analysis to see if you would have made more money by just buying and holding a index fund like spy vs the gains you have made day trading?

 

[Tamriel Terror]

For me personally I want to take some risk while the rest of my portfolio is just steady and non as risky.

For example: If I had 100k, id put 75k in core stocks (companies that are always gonna rebound, be safe), mutual/index funds, maybe some bonds if i can find decent rates, etc. the Remaining 25k i would use as much more short term, and invest in more risky companies. Thats basically what I'm doing now.

I have my money all over the place (tech, oil, metals, then in companies like Disney, IBM, Apple, Google, mutual funds, etc.).

 

[ralphc1]

perhaps set up a meeting with a financial advisor?

A classic case of those who can do, those who can't advise.

 

[steve38]

Have you done a comparative analysis to see if you would have made more money by just buying and holding a index fund like spy vs the gains you have made day trading?

Yeah, it's not even close. I've just a small 5 figure account and need to earn 10% on that each month to pay the bills. Not really possible by investing, but not too difficult with short-term leveraged trading.

It would be nice to have 6 figures and lengthen my time frame out to weeks instead of hours, but I would still trade the same. Technical analysis works better for me than fundamentals. I'll post up a chart in a minute....

Here's the problem with buy and hold. Market is very extended, and due for a correction. It may happen and it might not, but regardless there's no guarantee the market will keep going up. Everyone is spoiled now for the past several years, just like in 1999, and you see the correction from that bull run and the next one in 2008. Nobody knew if the market would come back up, or when. It's easy to see in hindsight, but both times everyone was scared shitless watching their net worth half or worse. Just something to think about. If I was a potential investor, I certainly wouldn't be looking at equities now.

 

[indo80]

Yeah, it's not even close. I've just a small 5 figure account and need to earn 10% on that each month to pay the bills. Not really possible by investing, but not too difficult with short-term leveraged trading.

It would be nice to have 6 figures and lengthen my time frame out to weeks instead of hours, but I would still trade the same. Technical analysis works better for me than fundamentals. I'll post up a chart in a minute....

Here's the problem with buy and hold. Market is very extended, and due for a correction. It may happen and it might not, but regardless there's no guarantee the market will keep going up. Everyone is spoiled now for the past several years, just like in 1999, and you see the correction from that bull run and the next one in 2008. Nobody knew if the market would come back up, or when. It's easy to see in hindsight, but both times everyone was scared shitless watching their net worth half or worse. Just something to think about. If I was a potential investor, I certainly wouldn't be looking at equities now.

All the metrics state the market is expensive so i would not be chasing high flying stocks but even if the market drops 50% it would still be a double from the 2008 low. Will i be selling my equity ETF if the market drops 50%, heck no as i will get double the shares from dividends at lower prices. It is best to diversify thus keep a certain percentage in bonds and a certain percentage in stocks.

 

[steve38]

All the metrics state the market is expensive so i would not be chasing high flying stocks but even if the market drops 50% it would still be a double from the 2008 low. Will i be selling my equity ETF if the market drops 50%, heck no as i will get double the shares from dividends at lower prices. It is best to diversify thus keep a certain percentage in bonds and a certain percentage in stocks.

Hope it works you for you. As you can see, the market was range bound for 15 years....maybe that's why I never appreciated buy and hold strategies. Hopefully we can all make some money in the future. <cheer>

 

[RJ43]

My advice would be to just invest in ETF index funds until you know for sure you have enough passion to put in the work required to actively trade. Even then the odds are against you, but you have to enjoy doing the analysis to have a prayer, IMO.

 

[indo80]

Hope it works you for you. As you can see, the market was range bound for 15 years....maybe that's why I never appreciated buy and hold strategies. Hopefully we can all make some money in the future. <cheer>

I'll drink to that, make sure you stick to your system. Did you hear about the Canadian guy who lost 200k which was all of his savings on a bearish bet that AAPL would go down after the past earnings. Unfortunately for him aapl went up and he lost everything. I'm sure you have a system in place but guys like that trader should never be day trading.

 

[sub_thug]

I'll drink to that, make sure you stick to your system. Did you hear about the Canadian guy who lost 200k which was all of his savings on a bearish bet that AAPL would go down after the past earnings. Unfortunately for him aapl went up and he lost everything. I'm sure you have a system in place but guys like that trader should never be day trading.

Day trading is the best way to lose all your money. It's gambling.

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
-Warren Buffett

 

[Mr Mojo Lane]

I'll drink to that, make sure you stick to your system. Did you hear about the Canadian guy who lost 200k which was all of his savings on a bearish bet that AAPL would go down after the past earnings. Unfortunately for him aapl went up and he lost everything. I'm sure you have a system in place but guys like that trader should never be day trading.

If you are bearish and have that kind of money, you should sell calls or use option spreads.

I really didn't pay that much attention, but I think that was all of his money too which makes it dumber.

 

[steve38]

Day trading is the best way to lose all your money. It's gambling.

Who knew that MMA fans were so financially conservative and risk intolerant? Didn't expect that, here. This thread and the forum's aversion to short-term technical trading reminds me of a scene from Seinfeld where Jerry buys George some sunscreen:

GEORGE: 25? You don't have anything higher?

JERRY: What, are you on Mercury?

GEORGE: I need higher. This has paba in it, I need paba-free.

JERRY: You got a problem with paba?

GEORGE: Yes, I have a problem with paba.

JERRY: You don't even know what paba is.

GEORGE: I know enough to stay away from it.

lol....goodnight, Gentlemen