The Stock Market

[DarterBlue]

27 minutes ago, FootballGuy said:

Understood. Just like most people, I'm trying to invest for the long run, but for now, I'd like to invest for short term gains. I'm trying to build an empire over here. I am new to the game, but this is something that I'm trying to make more money off of. 

Here is the deal. Trading and investing are very different. Now if your investments are in a 401k or 403b that you add to biweekly or monthly and the investments after the initial selection of funds are left to the fund manager (passive management on your part), and your personal brokerage account is used for trading, that is probably okay and may work very well. But if you try and actively invest one account but trade another, it probably will not work. Why? The skill sets and temperament required for the one is starkly different from the other. So, my advice to a beginner is, first figure out who you are. Once you have done that, it should be obvious whether you are cut out for trading, investing or, perhaps neither. If  neither, stick to the 401k, or if you are wealthy, invest with a money manager (hedge fund or someone you give discretionary limited power of attorney over your account). 

The point I am trying to make is that a good investor is very, very seldom a good trader and vice versa, and that some individuals are not cut out to make their own decisions in financial markets. 

A couple of comments. Good investors are patient and analytical. They are willing to pour through SEC filings and must learn to separate the required legal fluff from what matters. Good traders tend to be analytical but impatient. Their personality does not suit them to invest as many great investments take years to fully work out. Trading involves analyzing charts (individual stock/bonds/futures contracts/options), as well as looking at and analyzing certain macro indicators. Investing involves pouring over documents and maybe familiarizing yourself with an industry or two. In investing, the trick is to unearth and recognize value or sustainable growth. In trading, the trick is to recognize price and volume patterns. Good trading may also involve some knowledge of the fundamentals, but it is not as critical as it is for investing successfully. With trading, you are looking for relatively quick results (days, weeks, months, depending on the kind of trader you are). With investing you are looking for results measured over many months and sometimes many years. For you to be successful (consistently make money), both require a lot of initial and ongoing work. 

If you have some of the above traits, figure out which are dominant to your personality and go forth and trade or invest. If you don't have the time or lack the interest or inherent skills to do the required work, stick with the 401k or delegate the task to a money manager (full disclosure, I am not a money manager and would not want the responsibility that goes along with doing it well).

[FootballGuy]

32 minutes ago, DarterBlue said:

Here is the deal. Trading and investing are very different. Now if your investments are in a 401k or 403b that you add to biweekly or monthly and the investments after the initial selection of funds are left to the fund manager (passive management on your part), and your personal brokerage account is used for trading, that is probably okay and may work very well. But if you try and actively invest one account but trade another, it probably will not work. Why? The skill sets and temperament required for the one is starkly different from the other. So, my advice to a beginner is, first figure out who you are. Once you have done that, it should be obvious whether you are cut out for trading, investing or, perhaps neither. If  neither, stick to the 401k, or if you are wealthy, invest with a money manager (hedge fund or someone you give discretionary limited power of attorney over your account). 

The point I am trying to make is that a good investor is very, very seldom a good trader and vice versa, and that some individuals are not cut out to make their own decisions in financial markets. 

A couple of comments. Good investors are patient and analytical. They are willing to pour through SEC filings and must learn to separate the required legal fluff from what matters. Good traders tend to be analytical but impatient. Their personality does not suit them to invest as many great investments take years to fully work out. Trading involves analyzing charts (individual stock/bonds/futures contracts/options), as well as looking at and analyzing certain macro indicators. Investing involves pouring over documents and maybe familiarizing yourself with an industry or two. In investing, the trick is to unearth and recognize value or sustainable growth. In trading, the trick is to recognize price and volume patterns. Good trading may also involve some knowledge of the fundamentals, but it is not as critical as it is for investing successfully. With trading, you are looking for relatively quick results (days, weeks, months, depending on the kind of trader you are). With investing you are looking for results measured over many months and sometimes many years. For you to be successful (consistently make money), both require a lot of initial and ongoing work. 

If you have some of the above traits, figure out which are dominant to your personality and go forth and trade or invest. If you don't have the time or lack the interest or inherent skills to do the required work, stick with the 401k or delegate the task to a money manager (full disclosure, I am not a money manager and would not want the responsibility that goes along with doing it well).

I'll definitely keep this in mind. Great explanation! 

[DarterBlue]

1 hour ago, FootballGuy said:

I'll definitely keep this in mind. Great explanation! 

You are welcome. I just gave the board $250,000 worth of value in that post. I am glad you found it useful. 

[FootballGuy]

20 minutes ago, DarterBlue said:

You are welcome. I just gave the board $250,000 worth of value in that post. I am glad you found it useful. 

Well let's hope I can get lucky and make $250,000 in liquid assets from investing......or trading. Fingers crossed! 

[DarterBlue]

4 hours ago, FootballGuy said:

Well let's hope I can get lucky and make $250,000 in liquid assets from investing......or trading. Fingers crossed! 

It is possible. Aside from putting in the hard work early in the process, a key ingredient is to always, as far as is humanly possible, remain emotionally detached from the trades or investments you make. If you are able to do that one thing, you will be well on your way. 

[DarterBlue]

Some keys to successful trading:

• Always do your homework. By following this tenant, you will be prepared for opportunities when they present themselves, and you will get flat quickly when the markets move in the opposite direction of your trades.
• Predetermine how much you are willing to lose on each trade. If the trade does not go in your favor, cut your losses quickly.
• When you have a winning trade, try and let your profits run. You can bat .500 and still make a hefty profit if your winners gain twice as much or more than your losers lose.
• Manage your overall portfolio risk. Nothing is more damaging to your wealth and confidence than a big, unbudgeted loss.
• Develop a trading system. A simple system can work. The system should include: 1. Portfolio risk management; 2. Tailored indicators which give - setups, triggers, and exit points; 3. A mental approach to the markets compatible with your own personality.
• Trade your own ideas, or at the very least if you trade a recommendation, run it through your own filters (see trading system above) to make sure this trade works for you.
• Don't let success or failure impact you psychologically. Pride goeth before a fall, and a bruised ego will contribute to mistakes.
• This one I got from Victor Sperandeo, don't let the markets interfere with the more important things in life. Connect with your significant other and your children. Don't neglect good friendships. At the end of the day, as Neal Diamond's song said, "Money talks, but it don't sing and dance ...           "
• If you have a series of bad trades, take a timeout, or at the very least reduce position size till you are back in gear. 
• From Tom Basso, "Enjoy the Ride."
• Read some good books on trading and investing. Make sure they are compatible with what you plan to do. You can get wisdom and inspiration from some of them for under $25 and for free if you use the local library. 
• Observe the market's action in real time, it gives you a sense of its rhythm which will, in the future, alert you to meaningful changes in its complexion.

 

[imaGoodBoyNow]

I would like to buy $500 stocks and then resell them by Friday for a profit 

 

@StockGods make it happen 

[FootballGuy]

3 hours ago, DarterBlue said:

Some keys to successful trading:

• Always do your homework. By following this tenant, you will be prepared for opportunities when they present themselves, and you will get flat quickly when the markets move in the opposite direction of your trades.
• Predetermine how much you are willing to lose on each trade. If the trade does not go in your favor, cut your losses quickly.
• When you have a winning trade, try and let your profits run. You can bat .500 and still make a hefty profit if your winners gain twice as much or more than your losers lose.
• Manage your overall portfolio risk. Nothing is more damaging to your wealth and confidence than a big, unbudgeted loss.
• Develop a trading system. A simple system can work. The system should include: 1. Portfolio risk management; 2. Tailored indicators which give - setups, triggers, and exit points; 3. A mental approach to the markets compatible with your own personality.
• Trade your own ideas, or at the very least if you trade a recommendation, run it through your own filters (see trading system above) to make sure this trade works for you.
• Don't let success or failure impact you psychologically. Pride goeth before a fall, and a bruised ego will contribute to mistakes.
• This one I got from Victor Sperandeo, don't let the markets interfere with the more important things in life. Connect with your significant other and your children. Don't neglect good friendships. At the end of the day, as Neal Diamond's song said, "Money talks, but it don't sing and dance ...           "
• If you have a series of bad trades, take a timeout, or at the very least reduce position size till you are back in gear. 
• From Tom Basso, "Enjoy the Ride."
• Read some good books on trading and investing. Make sure they are compatible with what you plan to do. You can get wisdom and inspiration from some of them for under $25 and for free if you use the local library. 
• Observe the market's action in real time, it gives you a sense of its rhythm which will, in the future, alert you to meaningful changes in its complexion.

 

Appreciate the info, sir! If you have any more info that you feel like will be valuable for me, shoot it to my inbox! 

[FootballGuy]

1 hour ago, imaGoodBoyNow said:

I would like to buy $500 stocks and then resell them by Friday for a profit 

 

@StockGods make it happen 

The brother in law has $30K invested in Amazon and Tesla. He has money invested in 1 more stock that I can't think of right now, but that mofo is trying to cash in! Lol. 

[DarterBlue]

2 minutes ago, FootballGuy said:

Appreciate the info, sir! If you have any more info that you feel like will be valuable for me, shoot it to my inbox! 

I am old, and know not how much longer I will be here. But if I do have other stuff, I will probably post it in this same thread. I plan on keeping this alive till I finish trading for this cycle which will probably be a few months down the road. 

[DarterBlue]

2 minutes ago, FootballGuy said:

The brother in law has $30K invested in Amazon and Tesla. He has money invested in 1 more stock that I can't think of right now, but that mofo is trying to cash in! Lol. 

If that money was put to work a while ago, he probably has some good profits out of those two positions. It's kind of funny, as one is run by a nut job and the other by a sociopath, but both have done well in the market. I suppose it may be a sign of the times. 

[FootballGuy]

13 minutes ago, DarterBlue said:

I am old, and know not how much longer I will be here. But if I do have other stuff, I will probably post it in this same thread. I plan on keeping this alive till I finish trading for this cycle which will probably be a few months down the road. 

Even better! Spread the wealth, my guy! 

[DarterBlue]

On 5/15/2020 at 9:56 AM, DarterBlue said:

Both orders filled. Outlay $24,846.55. We will see whether this was smart or not. 

Well, it seems pretty clear that this purchase was wrong. The first loss is the best loss. I will cover them sometime this morning unless the market has a huge downside reversal. 

[golfaddict1]

Moderna news spiking futures... with small caps especially (Russell 2000 +5.74 pct).  Dow up over 3 pct.  

[imaGoodBoyNow]

5 hours ago, golfaddict1 said:

Moderna news spiking futures... with small caps especially (Russell 2000 +5.74 pct).  Dow up over 3 pct.  

Must b a good day 

 

im up 10%

[DarterBlue]

32 minutes ago, imaGoodBoyNow said:

Must b a good day 

 

im up 10%

Congrats! I had my worst day of the year. It sucks to be short on a gap up!!@#$!

[DarterBlue]

Well I closed out my ill fated, ill conceived put positions at a loss of approximately $9k, $7.6k of which was incurred today. So, I am back to being on the sidelines. This was a very humbling trade. The right thing to do would be to reverse and go long, but it is hard to do so on the huge gap up!

[DarterBlue]

2 minutes ago, DarterBlue said:

Congrats! I had my worst day of the year. It sucks to be short on a gap up!!@#$!

It's all good. In trading the cost of doing business (cost of sales) are your losses. The trick is to keep these costs down. There was very little I could do to mitigate this one, as the market gaped up on the open. I kept waiting for the pullback to get a better price, but it never came. So, I finally threw the towel in and took the large loss about five minutes ago.

[golfaddict1]

2 hours ago, imaGoodBoyNow said:

Must b a good day 

 

im up 10%

How'd you finish up?  

[golfaddict1]

1 hour ago, DarterBlue said:

It's all good. In trading the cost of doing business (cost of sales) are your losses. The trick is to keep these costs down. There was very little I could do to mitigate this one, as the market gaped up on the open. I kept waiting for the pullback to get a better price, but it never came. So, I finally threw the towel in and took the large loss about five minutes ago.

You nailed a sweet return just last week, which more than covers this loss.   As the Terminator would say, "I'll be back".   

Many more at bats and rips to take and you'll do fine, I'm sure.  

[DarterBlue]

30 minutes ago, golfaddict1 said:

You nailed a sweet return just last week, which more than covers this loss.   As the Terminator would say, "I'll be back".   

Many more at bats and rips to take and you'll do fine, I'm sure.  

That's the intention. The aggressive play would have been to reverse course and go long before the close. However, I found that hard to do given the magnitude of today's gains. I have a list of potential buys. I will probably evaluate how they and the markets do tomorrow and possibly Wednesday before I enter any new trades.

[imaGoodBoyNow]

52 minutes ago, golfaddict1 said:

How'd you finish up?  

 

 

 

 

I should  cash out and take the $900 profit I made this week of this stock, but I’m greedy and I’m hoping the stock gains even more, ima follow it closely, if it starts to dip ima sell and move on to the next project 

[golfaddict1]

4 minutes ago, imaGoodBoyNow said:

 

 

Webistics play or Bluestar Airlines?   LOL.   Nice day sir.  

[DarterBlue]

Stocks closed broadly and decisively higher on higher volume after gapping up on the open. The day’s action was near perfect (I will explain why not totally so later), as stocks gapped up and then, for the most part wended their way slowly but decisively higher as the day progressed. At the close, the gains ranged from 1.96% on the NASDAQ 100 to 6.1% on the Russell 2000. Advancing stocks led by margins of 26-3 and 13-3 on the NYSE and NASDAQ, respectively. In short, breadth was very strong, so strong that it put the Oscillator I use back in positive territory, but it is not yet overbought. What did I find questionable about the day’s trade? In a word, leadership. The stocks with the largest gains, were from lagging industries and many of them were bouncing off 52-week lows scored as recently as last Thursday. On the other hand, the stocks that have led the rally up since the late March bottom did not participate to the same degree, and several high-profile ones actually lost ground on the day, despite the great breadth statistics. Now I have no beef with the current rally (the rally is still very much intact after today’s decisive action) broadening out. However, if the current leadership were to show clear signs of topping out this early and not participating going forward, I will get concerned. Still, this was a fairly minor fly, if one can call it that, and the day scores at least an A-. The media have attributed the gains to news of the effective initial testing of a vaccine by a US based company. More ignored, but probably of equal importance is the fact that this may well be the first Monday since late March when daily deaths may end up below 1,000. That as much as anything may account for why the lagging stocks came to life, as it fueled a belief that life as we have known it may return. At least for the summer.

 On a personal note, I have had my worst three day sequence since August 2018 in terms of under performance, and in the case of today, significant losses. But in August 2018 the cause was attributable to one stock, Floor & Decor (FND), which blew up on me. This time it was due to exiting my longs prematurely last Thursday, and then compounding the problem by going short Friday. While the market had showed some signs of topping last week, and even to a lesser degree, the week before, despite its stellar percentage performance then, going short was way too premature. I realized this by Friday’s close, and had planned to cover the shorts Monday. Little did I know that the market was going to gap up big time, and continue drifting upward the rest of the day. As a result, I lost approximately $7,600 on the day. Funnily, had I not covered the five longs on Thursday, you would think I would have had a banner day today given the big gains. However, this would have not been the case, as I would have been up a mere $1,400 on the day, reflecting the poor performance of leading stocks such as TEAM and ZM, which, along with TTD lost ground on the day. However, JD did very well and was up about 9% which is why I would have been in the black, albeit, very modestly. I am now in cash, as I closed out the puts between 2:45 and 2:50. In the near term, the market clearly wants to continue the existing uptrend. So, as a trend follower, I will need to be long even though I still have major doubts about the existing economic backdrop. The decision I have to make over the next 24 hours is whether I will buy individual issues (of which I have a short list), or whether I buy call options on the ETFs that mirror the major indices.

[FootballGuy]

Anybody investing in Apple?