Any stock market traders here?

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littlebird

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Sorry if this is not the best category for this, but I was not able to find anything investment related on here.
If anyone knows of a financial , money or business category on CAF, please let me know.
Thank you !
 
Many years ago I did. The first one became d-listed and I lost the money, the second one I made money but not as much as I lost on the first one and the third one the LSE stopped trading with it so I guess it’s lost out there somewhere.

I did better in betting shops.
 
I have a wealth management business and have traded stocks for about 30 years.

Did you have a question?
 
Yes ! Is it possible to consistently make money while day trading ?

I have been out of the market for 20 years and it seems difficult now. It seems like all the good companies are 80% + institutionally owned. There is so much data and options available that it is overwhelming.
 
It is not impossible to make consistent money day trading; it’s just very unlikely.

Today, you would be competing with the “black box” institutional trading computers which all have data speeds/access FAR faster than you. Assuming that obstacle could be overcome, you’d still need to be a great chart technician, have unending patience, and total apathy towards your own money. Years of market observation wouldn’t hurt, either.

I have many clients who could be good investors but they learned the hard way that it’s difficult to treat their own money with indifference and, thus, create emotional distance from the results of their actions/inactions. That’s why they let me do it.
 
The other problem with day trading these days us the extent that individual stock prices move based on the market. With the prevelance of ETFs, this happens now more than ever. Daily/intra-day changes in prices are driven top down.

Read an article the other day on his high speed trading companies are even having trouble making miney consistently. They make the vast majority if the trades and are essentially trading between themselves. Day trading would be like jumping into a boxing ring in the middle of a fight between professionals and trying to land some good punches. The pain might be really bad.
 
Ok. Since making money consistently by daytrading is very unlikely , do you have any idea what the strategy with the highest success rate may be ?
 
I don’t understand what you mean .
What do you mean by “the market” when you say that stock prices move based on the market ? Do you mean the overall market, like if the nasdaq was way up, that the nasdaq stocks would go up ?

What does “driven top down” mean ?
 
Most of my client portfolios are built on growth stocks with a trend-following philosophy. In other words, I want stocks that have upside potential (think AAPL, AMZN, GOOG, etc) and I want to catch them in primary uptrends.

I will retreat to more dividend stocks when the market wants to go sideways and even add fixed income if necessary.

My primary directive is not to lose money. I’d rather miss an opportunity than lose money.
 
Yes, more than ever, individual stock prices move based on the market on any given day. While this has always been the case, in the past it was more of a traders’s behavior, ie bad news happens, people start selling in a herd.
Now, in addition to that, there us a mechanical cause built in to the market which assures this will be the case. ETFs are index funds which can be traded like stocks. Because of their internal structure dealing with the creation and destruction if shares based on demand (which works well as long as there is good market liquidity), as the ETF price rises it falls, they directly drive the price of the stocks they hold.
So on any given day, at an individual stock level, there us more likely to be a problem with the efficiency of the market.

This could be a good thing for traders working on a more long term basis. But for intra-day trades it will certainly make life more difficult.
 
Let me explain it a different way. There us a fundamental difference between trading and investing. You make money by investing because you are predicting the underlying value of something will increase over time. Traders try to make money because they believe the market is wrong at a given point in time in determining the underlying value (or r perhaps will be wrong in the future).
In other words, traders try to take advantage of market inefficiencies. Now inefficiencies can occur over various time frames. Apple may report a bad quarter, and it’s stock may fall, but you believe the drop is an over reaction, do you buy. Then you sell when you think the market has corrected itself.
Do inefficiencies come and go within a given day? Or at least correct themselves partially in a given day? Yes. Is it very hard to figure this out on such short time frames? Yes, very much so.
 
That is excellent advice ! I would rather miss an opportunity than to lose money.

I had an opportunity to buy AMZN under $20 about 20 years ago. Someone in a forum told me that it looked good. I asked " What do they do ?" …They said that it is a company that is selling books online. I said no thanks, I cant imagine that going anywhere. LOLOL
 
I agree that daytrading is very difficult now.
I am suspecting that contrarian strategies may be better now. I dont know. It seems like institutions hype a stock in an attempt to drive the price up because they want to sell and downgrade a stock because they want to buy it and at a cheaper price. Everything seems so crazy fast.
 
I’m an investor that has a buy and hold strategy, selling only when the fundamentals of a company have changed significantly. I have about a 50-50 equity/fixed income asset allocation not including real estate. I retired seven years ago at age 56, and my wife followed me a few years later. I’ve done best buying individual stocks, but also use some ETFs to help diversify. We live largely off of dividends and interest from our investments. My advice for novice folks is to learn about investing while you begin with low cost index ETFs or mutual funds. When you feel you understand risk, can read income statements, balance sheets, annual reports and calculate/understand important ratios and such, then research and buy a company that has a service product you understand and is profitable. Understand the business model of the company and how it makes money. If you’re unwilling to do that, stick to low cost index funds. Don’t gamble, but begin investing now, because time matters.

ETA: Don’t put all your money into retirement accounts. Keep an emergency fund and a taxable portfolio. It will help if you need the funds before you turn 59 1/2 and with managing your taxes later.
 
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