[mandown]

Since my funds normally spent on bikes have been rerouted to medical bills, which have started to dwindle, I'm looking for a new place to piss away some ducats. I'm not a fan of Vegas or the ponies, so the stock market seems like a good place to unload my loot.

I've been reading up at The Motley Fool, and poking my nose in Google Finance to track some stocks I'm interested in. Now I'm here for some armchair quarterback advice on other research tools. I'm also looking for an online trading mechanism. I'm already with ING for savings, but not sure how they stack up against eTrade and the rest of the pack. What say you?

 

[gonefirefightin]

I burned alot of time swing trading pennys, never left anything in over night. did it about 3 months while I was in the hospital but the research was getting to exhaustive for me.

 

[stoney]

no. as an investing professional, day trading will only cause you to lose money. You need to take the amount you are trading, say $1000 and then back out the total round-trip trade cost. Assuming your trade cost is $7.95, you are looking at $16 for a round trip. You need a minimum of 1.6% gain on the day to be profitable, then factor in tax liability. 30% tax liability on gains. So assuming you've mad 5% on a day (which is a really, really good day), you are up $50. $50-$16 = $34 x .7 = $23.80 profit.
Are you willing to risk the downside on $1000 for $24?

 

[mandown]

no. as an investing professional, day trading will only cause you to lose money. You need to take the amount you are trading, say $1000 and then back out the total round-trip trade cost. Assuming your trade cost is $7.95, you are looking at $16 for a round trip. You need a minimum of 1.6% gain on the day to be profitable, then factor in tax liability. 30% tax liability on gains. So assuming you've mad 5% on a day (which is a really, really good day), you are up $50. $50-$16 = $34 x .7 = $23.80 profit.
Are you willing to risk the downside on $1000 for $24?

That is the rough conclusion that I've been coming to on my own based on the way my CPA brain works. I also know that CPA's are to Finance what Coroners are to Medicine.

 

[dante]

Buy mutual fund. Forget about mutual fund. Profit.

 

[TortugaTonta]

I like trading options and investing in stocks. Options require a certain level of attention. Say, when aapl or nflx are making a move buy a block of 10 or 20 contracts (either put or call depending on which way its moving) and immediately put in a limit order to sell. Sometimes you can make 20% in less than 1 hour.

Most important thing to learn when it comes to the market is that it doesn't matter how "right" you are, it can still go against you and as soon as it does get out and live to fight another day. I am allways right, sometimes I am just right too soon and thats no good

 

[OGRipper]

Buy mutual fund. Forget about mutual fund. Profit.

You forgot "...eventually, most likely."

 

[stoney]

I like trading options and investing in stocks. Options require a certain level of attention. Say, when aapl or nflx are making a move buy a block of 10 or 20 contracts (either put or call depending on which way its moving) and immediately put in a limit order to sell. Sometimes you can make 20% in less than 1 hour.

Most important thing to learn when it comes to the market is that it doesn't matter how "right" you are, it can still go against you and as soon as it does get out and live to fight another day. I am allways right, sometimes I am just right too soon and thats no good

For an inexperienced trader, options are about as risky as they can get. You have more than just price involved. You have volatility and duration to factor in as well.

 

[TortugaTonta]

For an inexperienced trader, options are about as risky as they can get. You have more than just price involved. You have volatility and duration to factor in as well.

I would say they can be risky even for a experienced traders, but they can also be somewhat safe. For example cash covered puts and covered calls are safe as long as you are comfortable with them being exercised.

But you are right, you need to do some homework before you jump in.

 

[ALEXIS_DH]

i have a 9% CD. its insured for up to 100%, in case of bank collapse.
my retirement fund has made 60% over the last 3 years (including a 22% dip so far this year.

take that bitches.

 

[mandown]

been watching a few stocks and meditating.

i'm sure not doing a damn thing until after August 2nd.

after that, i may throw some dough and watch it go.

 

[stoney]

"Trading" is just another way to describe momentum "investing", which can also be called hot potato "investing". Buy it and let in run, then hope you sell it before it turns. Try to find the bigger sucker "investing".

I cannot stress enough that trading vs. investing is throwing your money away. Remember that there is somebody selling the stock, currently on a run, to you. That means somebody else did the work regarding their investment and are taking gains by selling to the sucker that wants to jump on the train.

Trading is highly risky and volatile. If you want to make a quick $50 without putting you money at serious risk, go give somebody a handjob. The only way to make real money trading is by taking the spread (ie. being a sell-side market maker).

 

[ALEXIS_DH]

i love it how the only people guaranteed to make money in the stock market, are those who dont actually own the money at stake.....

 

[stoney]

i love it how the only people guaranteed to make money in the stock market, are those who dont actually own the money at stake.....

Not true. If you are a MM, you are required to have a bid/offer listed at all times. If someone hits your b/o you MUST take the other side, even if you don't have the position. You are then required to acquire the position within 13 days. If not, you take what you can get at whatever price then.

Even still, with spreads in half-cent levels, there is very little money to be made as a ss trader now. That's why there are less than half from just 5 years ago and they are servicing 10x more accounts.

 

[mandown]

I cannot stress enough that trading vs. investing is throwing your money away. Remember that there is somebody selling the stock, currently on a run, to you. That means somebody else did the work regarding their investment and are taking gains by selling to the sucker that wants to jump on the train.

Rest assured, the message has been heard. I should have been clearer that I'm intending to take an investment oriented approach. I have been eyeing stocks of companies I believe in and like, and checking their general trends. The next step is to look for funds that hold those stocks and consider industry trends and economic environment factors that could be indicative of trends for the funds I find.

Regardless, I'm not placing my bet on the wheel until the government makes a decision.

 

[mandown]

Been eyeballing ETFs as an avenue, but I don't know much about them. Joker, what is your opinion of the ETF market, and is it worth considering? Any suggested reading material?

 

[stoney]

ETF's are the best place to invest to get 'market performance' type of investing. They can be best described as mutual funds for dummies. They give you the ability to take a long/short position on a specific market, country or sector, while not taking company specific risk. You also see far lower fees than you would from a mutual fund.

A good example would be if you want to get exposure to the BRIC nations. You can buy an ETF that tracks the BRIC countries major companies or indices.

I personally do not have many ETF's as I am primarily in company specific investments, but I do have an ETF for gold. Namely because I wanted to put the position into my IRA, and I would lose tax benefit by taking physical delivery.

Just know that you should look at ETF's like any other investment. Look long regarding duration, as any short-term position puts you into the same type of risks as day-trading.

 

[MTB_Rob_NC]

no. as an investing professional, day trading will only cause you to lose money. You need to take the amount you are trading, say $1000 and then back out the total round-trip trade cost. Assuming your trade cost is $7.95, you are looking at $16 for a round trip. You need a minimum of 1.6% gain on the day to be profitable, then factor in tax liability. 30% tax liability on gains. So assuming you've mad 5% on a day (which is a really, really good day), you are up $50. $50-$16 = $34 x .7 = $23.80 profit.
Are you willing to risk the downside on $1000 for $24?

That is the rough conclusion that I've been coming to on my own based on the way my CPA brain works. I also know that CPA's are to Finance what Coroners are to Medicine.

Dont be a wuss. Do you have good credit? Lever up and make some money.

 

[Krzr3000]

I day/swing trade. Learn a strategy and stick to it. I day trade stocks $1-5 that run at the open and am usually out within minutes. Also using a strategy that focuses on a few repeatable chart patterns that i swing for a few days at the most.

Check out www.investimonials.com for reviews and reconciliations of all things trading. Its good to listen to words of caution. But Don't be scared away by the mainstream financial sites that say day trading is too risky and dangerous. I almost was, but stuck with it and it paid off.

 

[SkaredShtles]

<snip> But do be scared away by the mainstream financial sites that say day trading is too risky and dangerous. I almost was, but stuck with it and fvckin' lost my shirt.

Fixed for most people.

 

[Brian HCM#1]

i have a 9% CD. its insured for up to 100%, in case of bank collapse.
my retirement fund has made 60% over the last 3 years (including a 22% dip so far this year.

take that bitches.

9% that's amazing!!! Our CDs barely reach 1%

 

[stoney]

9% that's amazing!!! Our CDs barely reach 1%

I have a daily cash access savings account at .9% and was ecstatic when I found it.

 

[mandown]

OK, I'm in the game. Apple, Google, Starbucks, and Hansen Natural (Monster Energy) are now in the portfolio. Let the good times roll

 

[stoney]

Just remember, buy low and sell high. Oh, and have you done individual company research? You are invested in three consumer discretionary companies and a tech company that is 100% dependent on advertising of consumer discretionary products. I'm just saying.

 

[stevew]

Hansen Natural (Monster Energy)

do you get a complimentary flat bill hat?

 

[ALEXIS_DH]

9% that's amazing!!! Our CDs barely reach 1%

returns are so high because finantial services are extraordinarily profitable, banks charge and arm and a leg, credit is really expensive too.

a "good" mortgage rate is around 10%, a "good" credit card rate is around 17%... some credit cards charge up to 4-5% A MONTH

 

[stoney]

returns are so high because finantial services are extraordinarily profitable, banks charge and arm and a leg, credit is really expensive too.

a "good" mortgage rate is around 10%, a "good" credit card rate is around 17%... some credit cards charge up to 4-5% A MONTH

This is how things should be here. High credit rates to keep credit in the hands of those who can pay it back. For the most part, banks outside of the US are on the hook for their loans. Hence they charge appropriate rates and limit lent credit.

 

[mandown]

Just remember, buy low and sell high. Oh, and have you done individual company research? You are invested in three consumer discretionary companies and a tech company that is 100% dependent on advertising of consumer discretionary products. I'm just saying.

In general, recent events things have shaken the market down a few pegs, so I'm betting that prices are low right now but going to trend back up.

I'm buying based on products I use. I have looked at some historic trends and recent news. I'm expecting Apple to jump when they do their next iPhone release, which will trigger me to sell if it is big enough. Google has been steady growth of market with Android and is targeting Moto so they can expand the patent holdings. Hansen has been on my radar since last year and doubled in value, primarily driven by Monster related growth. I drink Starbucks regularly, so it must be good.

do you get a complimentary flat bill hat?

yes. dividends are in hats.

 

[stoney]

In general, recent events things have shaken the market down a few pegs, so I'm betting that prices are low right now but going to trend back up.

So you are momentum trading, just want to make sure you are clear on this. Not investing, trading.

I'm buying based on products I use.

Which is not uncommon, but the non-discretionary are the best places to make safe money in consumer. The PG, JNJ, GE, etc where purchases are not discretionary.

I have looked at some historic trends and recent news. I'm expecting Apple to jump when they do their next iPhone release, which will trigger me to sell if it is big enough. Google has been steady growth of market with Android and is targeting Moto so they can expand the patent holdings. Hansen has been on my radar since last year and doubled in value, primarily driven by Monster related growth. I drink Starbucks regularly, so it must be good.

Reiteration of momentum trading / chart reading; again, not investing.

yes. dividends are in hats.

Apple:
P/E - 14
Dividend/Yield - $0 / 0%

Google:
P/E - 18
Dividend/Yield - $0 / 0%

Starbucks:
P/E - 23
Dividend - $.13 / 1.48%

Hansen:
P/E - 29
Dividend/Yield - $0 / 0%

Those are all really high P/E with low dividend ratios...

 

[mandown]

fair enough. i think i see the distinction.

 

[mandown]

Already down $52.70 in one day! Feel the rush

 

[stoney]

look at %, not $. Being up 15% in a short time frame is huge, despite what your $$ tells you.

 

[ridiculous]

OK, I'm in the game. Apple, Google, Starbucks, and Hansen Natural (Monster Energy) are now in the portfolio. Let the good times roll

This is interesting to me. What was your entry trigger to get into these stocks today? Clearly you aren't playing around with a trivial amount buying aapl and goog.


FWIW, I am for the most part a momentum trader and mainly an options trader. I don't totally agree with all of the things The Joker has mentioned in this thread but he's very right on most of them especially if you don't have the discipline, time and understanding of the stock market. Until you have a proper understanding of the greeks that go along with options stay away! If you don't have time or the skills to identify trends and support and resistance you will get burned.


We need a good stock discussion thread.

 

[mandown]

This is interesting to me. What was your entry trigger to get into these stocks today? Clearly you aren't playing around with a trivial amount buying aapl and goog.

We need a good stock discussion thread.

Today was based on the urge to get in the game and I needed to start somewhere. I had some cash and thought the market was down and bound to turn back up. I had been watching these as part of a theoretical portfolio I had been tracking on Google Finance. I probably could have made a more educated entry, but I tend to get analysis paralysis, so I forced myself to pull the trigger. I've got a few others on the radar list like Proctor and Gamble and General Mills. Also going to look into oil companies and maybe Cat. I'm expecting to get schooled the hard way a time or two, but I don't think I've made any horrifying decisions, like buying AIG a few years back around the time of the constant falls and reverse splits.

 

[ridiculous]

I really only bring it up because I guess you are currently learning how to play golf in a hurricane. The market has been ridiculously volatile over the last 3 weeks, downtrends have been confirmed, capitulation has started to show and let's not even get started on market manipulation as of late. Though, despite all of this, the market is showing some signs of bullish divergence from all of this...be careful! Be light & be nimble. Enjoy those gains today!

Well I can tell you from experience is that my first year trading was an exercise in controlling my emotions eg. getting rid of thoughts like "it's gonna go back up!", "I have a hunch this will do ______" and more importantly not making decisions to get in or out of things based on P/L for the day.

You should get a simulator account that will allow you to learn charting and use studies for what you are doing. Learn technical analysis, your portfolio will thank you for it. Meet other retail traders you can bounce ideas off of, meet people in the industry, but get good enough to always have and trust your own opinions. Open that simulator account and push every button, make mistakes, use the internal searches, learn the greeks and analyze tools but most importantly constantly trade! Also, go ahead and turn off CNBC nothing but trash.

 

[mandown]

Any suggestions on a simulator account location?

Starbucks is pulling me down so far, but today I'm up overall with a very small % in the green.

Looks like there has been speculation that The Fed is going to do "something" in the near term to "help" the markets. Any SWAG on what it will be?

 

[ridiculous]

I have a simulator account through my brokerage at thinkorswim that I love. It's a full fledged platform geared mainly towards active/option traders. Investopedia also has a stock/option simulator that is all web based that isn't bad but i don't think you can do any charting there. barcharts.com is another great resource for free charting and simulations.


RE: The Fed. They have a couple tools left at their desperate disposal to manipulate the market with. The great ben bernank, will be making a statement this Friday with more info. It's going to be an interesting ride until then. Regardless of what he or any public figure says, you trade whats on the chart in front of you, not their hot air.

Currently there are just as many indicators suggesting the market will rally up (short term) as there are suggesting it will go down further. Again, BE CAREFUL! It's not uncommon to wake up to a market down 400 points or a market that covers a 700 point spread in a single day. It's a total hurricane right now and its very easy to get destroyed in. You've bought some stocks that will move and have significant institution money behind them, be sure to trade with both price targets and stop losses to keep you afloat. Cash is a position man, Ive had several months in my career that I would love to trade better safe than sorry 0% ROI for.

I was going to write up a blog post with some thoughts on the markets tonight. If I actually get around to it I'll send you the link.

 

[dante]

I avoid momentum trading because you have to be right twice: You have to buy at the right price, and also SELL at the right price.

 

[ridiculous]

Isn't that particularly true with any trade?

 

[Krzr3000]

http://www.isthisthebottom.com/

Any suggestions on a simulator account location?

Speedtrader or thinkorswim. You can actually get real time l2 with speedtrader demo account.

I avoid momentum trading because you have to be right twice: You have to buy at the right price, and also SELL at the right price.

Opposed to?