Trading the stockmarket (NO Referrals)

[mcast123]

This thread is for anyone curious about trying it...

Long story short, quit my IT job 2 years ago and began trading the markets from home.

I will categorically tell you now, you WILL lose more than you make for at least a year (even if the markets aren't as mad as they have been). Any websites that make you believe this is easy and they're making a fortune are probably run by Mr Madoff (ponzi scheme guy). I use 3 trading chat rooms on a daily basis and it's amazing the private messages you get vs the public ones. One guy admitted to me he lost his parents house and all his savings etc.

It took me 18 months of frustration (I've gone through 5 keyboards, seriously), research and bloody hard work to finally get it. I'm now making a very good return.

If you want to do it, I say go for it, but like anything in life it's not easy. Stay small (trade small amounts) and research obsessively, everything you need to know is on the net.

 

[mcast123]

Mr T, as Christo said, I couldn't care less if the DOW hit 1000 or 20000, I'm trading not investing.

Christo, as you say, to do it full time you'll need a minimum of around £20k ($25,000 is a legal requirement for the US which I trade). I won't go into specifics on what I do, but most "home traders" trades are usually from $2,000 (options) to $50,000 (stocks/etfs).

The more research the better your trades, simple as that. When you know the daily rate for a Panamax drybulk carrier going from Oz to China, the thermal efficiency of a solar cell and why virtual server technology is making money, you're getting there. You also have to understand the economy and the consequences of the UK/US printing cash will mean for various stocks etc, not too mention technical analysis (get your GSCE maths hat on).

2 years ago all I knew was, the interest rate going up means my mortgage goes up, now I don't have one.

 

[mcast123]

the economy is eventually going to pick up again, so recently i put a £100 into 10 different shares for the long term.

Considering the cheapest UK rate to buy shares is around £5 per trade, you've spent £50 on fees to buy £100 of shares. I'll assume you got the trades for free in a £100 or less broker signup or something, good luck to you either way.

Just to let you know, global stockmarkets are about to rise around 40-50% in the next 3 months, so any buy and hold investments should be fine. Be wary of when inflation caused by money printing kicks in, current theory is for new stockmarket lows next year.

 

[mcast123]

Just to let you know, global stockmarkets are about to rise around 40-50% in the next 3 months, so any buy and hold investments should be fine. Be wary of when inflation caused by money printing kicks in, current theory is for new stockmarket lows next year.

There you go... Another cast iron top - Quick, buy buy buy!

+10% since post, we're roughly 1/4 of the way through this move up. I haven't analysed the FTSE but my DOW target is 11200 within a year then we head down again. Quick translation gives about 5500 target for FTSE100.

Up 67% ytd, trading is easier when we're in a clear trend, in this case up.

 

[mcast123]

I've decided to start playing the stock market as well. I've done lots of research and have friends who are traders and brokers so believe I am in a comfortable position.

I'm 99% certain you will lose money, DO NOT invest any more than you can live without. My advice to anyone starting this is to pretend the money you invested is gone, you've lost it all, and anything you get back is a bonus. Most people here are throwing a few hundred non essential pounds into beaten down stocks, which is fine.

Here's some tips on how to lose less...

Make sure you fully understand the industry, sector and business of whatever you're intending to buy.

Simple TA (technical analysis)...
Start here for looking at an entry into a stock, forget the formula just read the simple stuff, use it as a rough guide.

Playing the stocks is a very difficult and dangerous thing to do and requires a lot of in depth knowledge of the system. I noticed that a lot of you are speculators and basic theory easily shows that high profit comes hand in hand with high variance (risk).

Do any of you use any specialised models or theory to base your calculations or is it all based on word of mouth, rumours and big nads?

Also I noticed that most of you purchase your assets on the spot. Has anyone ever used derivatives such as futures, forwards or even options? Or planned out trading strategies? (ie shorting an asset -> using funds to go long in a forward then selling the asset on delivery and buying back the original shorted asset?)

I use options daily, selling out the money puts on ETFs is a good way of exploiting the volatility, also options are a good way of hedging when buying stocks. I also short as much as I go long, after a while you forget the difference, one is for up the other for down. Most brokers will offer margin, you can use this to increase your weighting, get it wrong and say hello to life in a cardboard box.

There's a running joke on wall street "when your taxi driver starts giving stock tips, start shorting", heed that advice i.e. when the public are buying up stocks fearing they'll miss the rally, it's usually at the top.

 

[mcast123]

be careful with this stuff - a lot of it is pseudo scientific mumbo jumbo because it is incredibly easy to learn to use and requires very little effort - though not surprisingly most people lose money.

There's plenty of people I know making annual seven figure sums purely on TA. The problem is most people don't know how to use it properly and lose.

Other way round tbh... if you're regularly trading then you should be paying less not more....

Anyway maybe this will help:

http://www.interactivebrokers.co.uk/

Other way round tbh... if you're regularly trading then you should be paying less not more....

Anyway maybe this will help:

http://www.interactivebrokers.co.uk/

Exactly who I use, these guys are classified as "discount brokers" which is the trend. I'm not sure about the UK as I trade the US only (no stamp duty), but my average trade is $5. The user interface has a bit of a learning curve, but really handy when you get used to it.

These guys are good also, but I'm not sure if they cover the UK.

 

[mcast123]

There is the other more pressing problem in that a lot of it has no basis or evidence to back up the techniques.

Either way it is a fuzzy area - plenty of traders swear by it and there are plenty of others who will mock the use of it. FWIW the place I used to work at was a mixture - a couple of the top traders wouldn't have a chart in sight on their screens - just a bunch of TT price ladders. Some other guys would have 2-3 screens devoted to CQG charts.
There are plenty of people working on the floors in Chicago who seem to do OK to the tune of 7-8 figures without relying on pretty charts and indicators.

I use a few trading live chat rooms, some users post their trades live, not difficult to work out who's making money and who's not. There's certainly more losing that's for sure and that's what I've beebn stating again and again in this thread. "Plenty" is probably an overstatement. I've verified at least 6 making close to or above 7 figures. They could be lieing but after a couple of years it looks as though they aren't.

I'm in the same camp as you, mixture of both, in fact things are so messed up right now, I trade purely on news and macro data. Pick any stock, doesn't matter how bad the fundamentals or how overbought it is, you can make money. When the music stops though....

 

[mcast123]

Just to let you know, global stockmarkets are about to rise around 40-50% in the next 3 months, so any buy and hold investments should be fine. Be wary of when inflation caused by money printing kicks in, current theory is for new stockmarket lows next year.

This has to be the most optimistic bull market prediction I've ever seen. If you're so sure, I think a few index CFDs may well do you good sir. It's total rubbish, however. You simply have no idea how far off the fundamentals you are there.

A quick update....

The FTSE is 22% up since post, it's taking longer than I thought. We're about half way to the top. As we get close to 5500 start taking your cash out and wait for the dip into next year. The euphoria will fade within the next few months and the reality of world economies not growing fast will kick in, trade accordingly.

 

[mcast123]

You sure it was two years ago?
http://forums.overclockers.co.uk/showthread.php?t=17908040

Yup, if you read this post, I was losing money and faith in trading, for well over a year.

What's your strategy? Do you trade one particular stock or many? etc

I now trades mainly US futures, options and some ETFs. I keep away from stocks now as they're less predictable, require more captial and tend to have higher fees.

My Barclays I bought at 220 are looking good today.

Just fustrated I kept selling too early and taking profit. I did have a load at 76p once

It took me a long time to discipline myself and not do this. Human nature is to take profit early and let the losers run in the hope they will come back.

I now have very strcit rules which I never break. I would say the major part of being a good trader is getting rid of emotions. You only have to be right 51% of the time to make money, you just need to learn to ignore the 49% losers.

I still classify myself as an inexperienced newbie.

 

[mcast123]

I'm looking into stock market investment and I was hoping you could answer a quick question. I'm not looking to day-trade, I'd just like to purchase 10 stocks I've selected all at once and hold them for a year. The amount I have to invest is small (£1,000) but since I'm only planning on buying and selling once a year I did not think I would be swallowed by commissions as I would if I was actively trading.

I've applied to selftrade.co.uk, but my concern is that I'm not sure what they mean with regards to commission "per trade." I have the sinking feeling that it means if I buy my £1,000 of stocks in ten companies all in one go, they will count that as 10 different trades and charge me £100. Then if i sell them in a year that will be another £100, meaning I'd have to beat the market just to break even... I can't find a definition of what constitutes a "trade" - is it per company or the whole thing at once?

A trade is any separate trading entity, so depending on your broker you're probably looking at:

buy - 10 x £10 + £1000x0.05 (stamp duty) = £150
sell - 10 x £10 = £100
bid/ask spread £10ish
total - £260

You don't have to be a rocket scientist to see it would be a terrible way to invest £1000. A FTSE tracker fund would be a much better option. There are region and sector specific ones also, although my guess is you're going to randomly pick 10 uk listed stocks.

 

[mcast123]

Slightly unrelated here - but maybe someone can advise

Is there any benefit of keeping money on offshore account? I have offshore accounts for GBP, EUR and USD for less currency hassle when travelling - is there any benefit in keeping money on offshore accounts?

I assume you mean "offshore" as in tax avoidance? In relation to stock trading the answer is no. Switzerland/Cayman/Bermuda brokers within these tax havens charge insane trading fees. "offshore" these days isn't a good idea, almost all UK "offshore" accounts are now monitored by the UK gov. So you can forget RBS/Barclays/etc offshore accounts.

 

[mcast123]

Obama is just blowing smoke, the banks will go back up.

This just give you a chance to top up a little.

Not a wise idea, as I said, this year could get very nasty for the markets. I'm watching for a breach of the lows last year.

 

[mcast123]

Just to let you know, global stockmarkets are about to rise around 40-50% in the next 3 months, so any buy and hold investments should be fine. Be wary of when inflation caused by money printing kicks in, current theory is for new stockmarket lows next year.

+10% since post, we're roughly 1/4 of the way through this move up. I haven't analysed the FTSE but my DOW target is 11200 within a year then we head down again. Quick translation gives about 5500 target for FTSE100.

Up 67% ytd, trading is easier when we're in a clear trend, in this case up.

We hit 11309 on the DOW, so I was 109 points out in my 40-50% prediction last april. I stand by the same prediction, we will see new market lows from here.

I'm looking for a 50% drop from 11309 on the DOW (and the FTSE), within a year. I'm currently net short the market.

dyor etc etc

 

[mcast123]

Rough week ahead again I suspect - Sold FTSE 100 (using IGIndex) before start of trading, 5 mins after opening - banked 30% profit after FTSE plummeted on opening. Same with BP.

Stay short for the next 6 months-year, the true bottom isn't in yet.

We had a drop from DOW 14300 to 6700 (i trade the US only, no stamp duty) then back up to 11300, I believe this time round we will see DOW at 5000 or less (similar % drop for the FTSE).

I'll oversimplify...
We averted a major worldwide depression 1930s style by printing money. The global economies started growing again after this huge cash injection, so what we saw was "fake" GDP growth round the world. We are now seeing signs of the real state of the global economy, consequently stockmarkets are beginning to respond. We not only have to contend with the economic contraction, but we now have vast deficits by bailing out private banks with public money.

 

[mcast123]

What got me intereted in shares of late was the BP saga, their share price has obvioulsy slumped beyond belief,..This may take 5 -10 years plus but i see it as an investment...

"beyond belief" means nothing, you just perceive a 50% fall as a lot.

"May take 5-10 years" you're subconsciously fooling yourself into a no matter what I'll win mindset.

I saw these type of comments on the newbie trading forums (yahoo etc) during the demise of Northern Rock. The drop from 1200p to 600p drew in thousands of "bargain" hunters, the further drop from 600p to 200p drew in even more. We all know how that ended. The same thing happened with Royal Bank and a number of others.

As posted earlier, if you're in it for the "long term" why not invest in a FTSE tracker? I suspect many here are in BP for the short term expecting 50%-100% gains. The stockmarket does not behave in the way the general public can relate to and thus many lose money.

In regards to BP:
I don't believe they're about to go bankrupt, but you have simply no way of knowing what the longer term effects will be. BP Global assets are ~£100b, £35b of which are BP America (worst case scenario it's BP America that will BK, not BP global), potential lawsuits and clean up bill are currently in the £30b range. The unknowns are the damage to the brand, long term lawsuits and structural change if they are found to be negligent (read this as lower profits).

 

[mcast123]

This is the only thing that will move the markets today.

Like it or not, the UK stockmarket is driven by the US.

You lot are worrying me with your "it's not a loss until you sell" and "if it goes down I will hold longer". You do realise the only one you're fooling is yourself?

The critical factor in predicting where UK/US stockmarkets are headed is the unemployment rate. You also need to remember both the UK and US are currently employing a large number of people for the census, this is skewing the figures.

 

[mcast123]

it depends on the company and what they have in the pipeline.
i bought CHAR at 26p which then proceeded to fall to ~17p for a few months - had i sold and realised my loss i would have missed out on the rise - its now at 123p and will go much higher in the future imo.
other companies have gone down and not recovered - each case is different.

You're quoting a highly speculative oil&gas co. in which you probably had a small % of your total assets invested and got very lucky (or you had prior knowledge, if you did I'd stop posting about it now). It would be more interesting if you quoted every one of your stocks gain/loss position over a similar period.

My point was people should not be buying then saying "I will hold longer" as it falls, without continually reassessing why it is falling.

 

[mcast123]

Sitting on north of 2 million atm

very happy
Camper right now

If you bought at their lowest, that's £100k, brave man. The truth is most penny stocks will lure in retail and take their money, you are either very lucky or conservative with the truth.

 

[mcast123]

Think your putting decimal points in the wrong place. Kodal currently trading at 0.4p.
Sold 500k shares off yesterday for a whopping £2100

Yes, you're correct, I thought it seemed an awful lot of money.

 

[mcast123]

Long GBP/USD @ 1.165 target 1.4 by June 23