Trading the stockmarket (NO Referrals)

[sniffy]

After following dowie's advice I started a demo account on the forex. I'm hooked; I absolutely love it. The whole environment and learning process is brilliant.

I don't trade particular pairs, I just watch each market for an opportunity to arise (usually with the 4H charts). I essentially buy at the lowest low, sell at the highest high and follow the trend. There's also other indicators such as if the currency is deemed to be overbought or undersold which can help support a decision. The dollar index against the pair index seems to have some bearing but it's impossible to say for sure this early in. Hopefully in ten years or so I should have a good idea about what I'm doing

Does anyone know a free service that provides live pip values?

 

[dowie]

I'm not sure you are following my advice - rather you seem to be doing the opposite. From your latest post you appear to be using a demo account at an FX 'broker', taking directional trades and using charts, some sort of subjective descision making - deciding when the market is at a low/high and some more subjective descision making over a 'trend' and then mentioneing an 'over bought' indicator (so you're looking into TA too...). There is nothing wrong with this in principle if you're doing it with a demo account, want to play around etc... but I'd really think twice about depositing any funds and trying any of this live.

Just to sumarise my point of view:

a lot of 'TA' is complete bunk and should be treated with a healthy dose of scepticism

most retail FX 'brokers' are bucket shops who take the opposite side to your trade - there are lots of conflicts of interest as a result of this

taking directional punts in higily liquid financial markets is a very very very hard way to make money

 

[sniffy]

I appreciate the response, even if it isn't positive. You're absolutely right about doing this with real money. That would be utterly stupid. Even if I wanted to do that I simply don't have the money.

I researched the subject and come across some forums with people who have been trading in this environment for many years. I appreciate that you almost certainly know what you're talking about but to be fair I'd say the same about a small minority you find in some of the forex forums. They've made all the mistakes you can make and probably lost a fair amount of money doing so. However they learnt something from it all and that's what I'm trying to soak in.

I've been doing it for a few days now. Risking 1-2% equity each trade and setting loss limits so pretty conservative but averaging a little over 1% growth each day. I'm not saying you're wrong and I genuinely do appreciate your input but I feel it's something to at least investigate for a few months. If I can achieve growth month after month after month then hey, there might be something to it all.

 

[silversurfer]

trade2win is one forum, which ones are you looking at ?

a lot of 'TA' is complete bunk and should be treated with a healthy dose of scepticism

TA is the same feel for momentum in the market anyone would need in order to trade, its just more formally written. So long as its not taken too seriously the bottom line is still the human decision process

 

[dowie]

No TA covers a fairly broad area of various objective and subjective methods which generally aren't well researched. Most of it is pseudo science.

Its more the fact that it often isn't formal, presents everything in a very simplistic manner and is very basic that makes it attractive to retail traders. Spread betting firms love it too - give the punters some fancy charts and a range of easy to use 'indicators' and you'll create the illusion that they can use it all to perform some sort of intelligent analysis and they aren't just taking random directional punts. I mean it all looks very fancy and scientific and the explanations behind how the indicators etc... work all seem plausible.... but that's about as far as it goes for most of it.

 

[morguk]

So yesterday I look at all the stocks I have been following and they were all in the red.

Lloyds went from 111p to 97p (lowest).

Today I look at all the stocks are green. Some up a good 5 or 10%. Lloyds currently at 103p.

Please don't tell me yesterday was the autumn correction...

 

[chipperhead]

So yesterday I look at all the stocks I have been following and they were all in the red.

Lloyds went from 111p to 97p (lowest).

Today I look at all the stocks are green. Some up a good 5 or 10%. Lloyds currently at 103p.

Please don't tell me yesterday was the autumn correction...

I believe it was a retrace for the last couple of weeks of substantial gains, if that was it and it's a steady rise again I'll be elated as I was expecting a much bigger drop.
I was in two minds to sell last Friday and rebuy as I was sure it was coming but I've decided to just go with the flow as I'm in it for the long term.

 

[Simon]

I think a lot of profit taking / stop losses kicked in aswell which made the drop bigger.

Personally I want to keep in for long run and therfore number of shares held is important. My Lloyds average is 67p, if i sell at 110p and got back in at 99p then I would make some short term profit however I would hold less shares.

 

[Ev0]

I think a lot of profit taking / stop losses kicked in aswell which made the drop bigger.

Personally I want to keep in for long run and therfore number of shares held is important. My Lloyds average is 67p, if i sell at 110p and got back in at 99p then I would make some short term profit however I would hold less shares.

Or you would sell at 110, then buy back more shares than you sold at a price of 99, but with the same original outlay, thus increasing your holding at no extra cost

 

[Simon]

Or you would sell at 110, then buy back more shares than you sold at a price of 99, but with the same original outlay, thus increasing your holding at no extra cost

Still wouldnt have the amount of shares as at 67p, important if dividends start coming through.

I do see you point and i tried that with barclays, however in hindsight i should have just sat for the long term.

 

[morguk]

Ok, cheers guys.
Do you think there will be a larger and longer decrease in shares any time soon then? I get some money next week and want to invest then.

 

[chipperhead]

Still wouldnt have the amount of shares as at 67p, important if dividends start coming through.

I do see you point and i tried that with barclays, however in hindsight i should have just sat for the long term.

Unless I'm missing something Ev0 is correct, you can either buy back the same amount of shares for less money than you sold them for or buy back more shares than you originally had.
Whatever way you do it, if you sell for 110 and buy back at 99 you will gain.

 

[sigma]

Obviously nobody can predict the future, but I see there is talk that there is a risk that this may be a double-dip recession? Obviously it's the newspaper's job to stir up **** but are they onto something?

International complacency risks plunging the world into a double-dip recession, the Chancellor, Alistair Darling, warned yesterday, according to the Independent.

Alistair Darling is scrambling to plug a gaping hole in the $1.1 trillion global rescue package agreed by G20 leaders in London — hailed at the time as Gordon Brown's biggest success, writes the Times.

Thoughts?

I also see that the Lloyds rights issue plans are being stress tested at the moment. Should one get a small ammount of shares inorder to buy some cheap once/if the rights issue is issued?

 

[silversurfer]

So yesterday I look at all the stocks I have been following and they were all in the red.

Lloyds went from 111p to 97p (lowest).

Today I look at all the stocks are green. Some up a good 5 or 10%. Lloyds currently at 103p.

Please don't tell me yesterday was the autumn correction...

That was just a blip to shake you up. A real correction could see lloyds half though that probably be good gamble and it'd come back quick

I also see that the Lloyds rights issue plans are being stress tested at the moment.

Got a link for that ? Lloyds wants to repeat the last fund raiser in aid of self capitalisation vs the governments insurance.
Its a good thing because the government plan sees them making billions off the back of lloyds. They cant possibly raise enough to act like barclays have

Should one get a small ammount of shares inorder to buy some cheap once/if the rights issue is issued?

The share price drops as soon as the rights ratio is announced. Theres little advantage in being a shareholder on that day except you gain everytime in between now and then on news of house prices going up or whatever


People who recently bought lloyds at 60p instead of owning the rights to 38p gained almost as much as shareholders if not more in terms of risk/reward.

Rights means they take the cake you already own, cut it into smaller slices and sell one of them to you. There is no profit, the idea was right because it reduced lloyds ongoing debt costs and so that secondary benefit increased share value arguably.

On top of that the market increased in optimism, so being an owner around the rights issue happened to be great timing

 

[sigma]

http://www.telegraph.co.uk/finance/...tress-tests-Lloyds-fund-raising-proposal.html

I'm just looking at it from the point of investing for long term investment, not trading or anything like that. Leaving the shares for 5 years would be no big deal.

Are we thinking that the autumn correction is going to kick in this month?

Excuse the n00b questions, but you'd rather be safe than sorry.

 

[Simon]

Unless I'm missing something Ev0 is correct, you can either buy back the same amount of shares for less money than you sold them for or buy back more shares than you originally had.
Whatever way you do it, if you sell for 110 and buy back at 99 you will gain.

Yeah I hadnt really thought that through, temporary brain fail there, I was holding on to that as a reason to not sell and rebuy. lol

In hindsight that would have been good but I've tried that so many times with barclays and it never worked.

 

[Simon]

http://www.telegraph.co.uk/finance/...tress-tests-Lloyds-fund-raising-proposal.html

I'm just looking at it from the point of investing for long term investment, not trading or anything like that. Leaving the shares for 5 years would be no big deal.

Are we thinking that the autumn correction is going to kick in this month?

Excuse the n00b questions, but you'd rather be safe than sorry.

No idea on this autumn correction, my feeling is this year isn't a typical trading year though. If it does correct after my holiday and it drops lots Ill just buy more.

There is nothing worse than selling shares and watching them go up 10% the next day, not knowing whether to get back in or wait for a drop. As I mentioned I got stuck trying to do this with Barclays a few times.

Did it with RBS, bought at 27, sold at 37p only to watch them rip to 50p. I managed to get back in at 45p, but then they dropped to about 38p. Now at 55p I don't care too much for it.

At the end of the day you have a price you buy at and a price you sell at, it will wobble in between - but on a long term that wont matter. Nothing is more annoying than missing some of that growth by selling and having to get back in at a higher price.

 

[silversurfer]

Nobody really warned me last august there was going to be a correction and this year there has been tons of people saying to sell since may so just off that I'd bet nothing big happens


Thats overall though and banks are the share equivalent of spinning plates on sticks, a very clever trick allows the impossible to exist and eat your dinner off it even

I'm just looking at it from the point of investing for long term investment, not trading or anything like that. Leaving the shares for 5 years would be no big deal.

Theres going to be blips at some time in the next 5 years. If you think the general trend is up then the best deal to do is regular investing over that 5 years.
If you were to split your total capital into 12 bits and put some in each month over the next year I could imagine you'd make a profit or certainly have a good starting point.

That might have even worked for the last 12 months if anyone had the insight to do so
try iii

 

[sigma]

No idea on this autumn correction, my feeling is this year isn't a typical trading year though. If it does correct after my holiday and it drops lots Ill just buy more.

There is nothing worse than selling shares and watching them go up 10% the next day, not knowing whether to get back in or wait for a drop. As I mentioned I got stuck trying to do this with Barclays a few times.

Did it with RBS, bought at 27, sold at 37p only to watch them rip to 50p. I managed to get back in at 45p, but then they dropped to about 38p. Now at 55p I don't care too much for it.

At the end of the day you have a price you buy at and a price you sell at, it will wobble in between - but on a long term that wont matter. Nothing is more annoying than missing some of that growth by selling and having to get back in at a higher price.

It's a tough one isn't it? Hindsight is a wonderful thing. If only i'd invested when RBS were 30p I would have made X ammount. Not a good way to think is it.

You're right when you talk about setting targets. I believe we're in a bull market? So shares will continue to go up and down for a fair while.

Thats overall though and banks are the share equivalent of spinning plates on sticks, a very clever trick allows the impossible to exist and eat your dinner off it even

Hehe

Theres going to be blips at some time in the next 5 years. If you think the general trend is up then the best deal to do is regular investing over that 5 years.
If you were to split your total capital into 12 bits and put some in each month over the next year I could imagine you'd make a profit or certainly have a good starting point.

That might have even worked for the last 12 months if anyone had the insight to do so
try iii

Yeah that makes sense, will have a nose around iii.

The whole trading/investing thing is really quite funny, it's like a whole world of its own, that thrives or dies on speculation, news and confidence.

 

[morguk]

Arrgggg! Damn lloyds, don't know when to buy in