Trading the stockmarket (NO Referrals)

So, my ignorance is showing again but I have a question.

When should you take profits? Perhaps a perpetual questions for all investors?

I have a particular goal in mind - effectively take out my original stake and only have pure profits left in the shares themselves.

Do I stay all in and wait for the goal to be achieved or pull profits periodically until the goal is reached?

I'm thinking taking profits periodically may still achieve this goal but at a slower rate?
 
Any question like that, buy and read the Naked Trader book. @silversurfer referenced it a few weeks ago too. It's old now, cover looks rubbish etc, but I read it what must be ~12 years ago and the fundamentals are the same. It's almost like the driving theory test of share dealing.

The spread betting one is worthwhile too and again goes into more fundamentals that aren't solely in regards to spread betting.

Common mistake is to let losses run and cut profits early, but it goes into far more detail than that and what to look for.
 
EddScott said:
Thank you - is that the Robbie Burns one? Just having a look on Amazon :)
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Yes, 5th edition was released recently. I finished it today and will no doubt re-read very soon. Well worth the money and a good read.

I was due to begin investing my spare cash earlier this year then Covid came. Dabbled a little after the crash, bought and sold a few things cautiously. I stopped when I turned around to my wife and said “this is not what I was wanting to do - I’m basically gambling now and I hate gambling”.

I packed it in that week (before Bank Holiday) to do more reading up - then FTSE rally happened over the last week or so. Could have made thousands (!) but I just can’t make sense of the situation - it’s like everyone has gone nuts as the lockdown has started to lift. As a newbie I’m keeping my cash, alarm bells ringing for me.
 
englishpremier said:
Very strange. Q2 earnings are expected to be bumper and the year overall is going to be a good one, but they won't convert casual users to paying members, more and more governments and companies are moving away from them to more 'secure' options. Bigger firms are likely to want an integrated package, that means Microsoft or Cisco or similar. Then there is the competition from Facebook and Google.

So far I've bought, sold, re-bought, sold, and shorted. On a large paper loss on that one at the moment.

Today however I feel the rise is more to due to the current rallying. The optimism over the end of the lockdowns and living with the virus are short sighted IMO. By the end of this the US might well have pumped $9tn into the economy, and still have many millions unemployed. The EU's €750bn is nothing in comparision, and some sectors are going to be in real trouble. Similarly once furlough ends in the UK and companies realise they are struggling to survive there are going to be serious job losses.
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An ETF I hold had this in their top 3 holdings recently around 6-8% of the entire fund but it now no longer features in the top 10.

Looks like they rode the rise and have jumped ship.

Given their 12 month return is well over 40% this year (and year on year annualised) they probably know what they’re doing...
 
EddScott said:
So, my ignorance is showing again but I have a question.

When should you take profits? Perhaps a perpetual questions for all investors?

I have a particular goal in mind - effectively take out my original stake and only have pure profits left in the shares themselves.

Do I stay all in and wait for the goal to be achieved or pull profits periodically until the goal is reached?

I'm thinking taking profits periodically may still achieve this goal but at a slower rate?
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Many may disagree but my advice is to avoid thinking in terms of profit and loss. Once you own it, the price you paid for the share is no longer relevant (except for CGT purposes!). What is relevant is whether you still think it is a good prospect at today's price. If yes, hold (or buy more). If no, sell. Try to forget the psychological anchor of the price you bought in.

What you should do is rebalance on a regular basis. If one of your positions doubles in size, you need to ask yourself whether you want it to be that large or if it would be more prudent to trim it down to something more reasonable. Diversification is important.
 
So are there any reasons i should be weary of 212? no fees etc drew me in, im an extreme novice to this and i only have a couple of hundred in there. i dont expect to be buying a private jet or anything but the returns seem better than sticking it into a savings account
 
Fees are cheaper than spread on big trades. No fees doesn’t mean they aren’t taking a cut. It just means they have put the fee into the spread (difference between buy and sell)
 
Simon said:
Fees are cheaper than spread on big trades. No fees doesn’t mean they aren’t taking a cut. It just means they have put the fee into the spread (difference between buy and sell)
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Are you sure about that? You made this claim before but it’s not clear at all, do you have any evidence to support it?
 
Yes. It’s hidden costs versus clear fees here

Eg HSBC isa has a 0.1p a share spread on BP. Another ‘no fee’ broker is 0.5p for a x1 CFD (buying the stock). Spread gets bigger on levers

Trading212 is a 0.6p spread.

obviously on smaller trades no fee brokers are going to be better but just don’t assume no fee is always cheaper is the only point I’m trying to make. Happy to be proven wrong with some other examples :)
 
Simon said:
Yes. It’s hidden costs versus clear fees here

Eg HSBC isa has a 0.1p a share spread on BP. Another ‘no fee’ broker is 0.5p for a x1 CFD (buying the stock). Spread gets bigger on levers

Trading212 is a 0.6p spread.

obviously on smaller trades no fee brokers are going to be better but just don’t assume no fee is always cheaper is the only point I’m trying to make. Happy to be proven wrong with some other examples :)
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Wait you’re comparing CFD prices?

Not the no fee share dealing service?
 
dowie said:
Wait you’re comparing CFD prices?

Not the no fee share dealing service?
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Just about to say, not sure why we are speaking about CFD for Chrisc query.

I'm using the 212 ISA for share dealing, I have paid no fee's on buying/selling, just the stamp duty. I have checked the share price vs other sites at the time of purchase, having seen no difference I've used 212.
 
dowie said:
Wait you’re comparing CFD prices?

Not the no fee share dealing service?
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The other broker was a actual share where they tighten the spread but still big. I just played on trading 212 virtual which allowed me to look at sell price - I've had the account ages just for the free shares they gave out but never used it. Indeed the spread is 0.1p too so yeah looks decent and my previous points were wrong. You do pay tax on them where a cfd doesn't but this is tiny, so it would seem trading 212 is a lot lower spread than i assumed. (and a lot lower than others)

Whats the withdraw time like? Assume no fees on that either?
 
booyaka said:
There is no such thing as a free trade. Period.

There will be fractional differences in the bid/offer prices which will cover their costs
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I don't disagree with you, they're making money somehow.

All I know is that when I checked side by side, it was pretty much identical.
 
Well technically they make money on CFD accounts hence the banner warning that 76% of retail investors lose money (I note that there is no equivalent warning on the national lottery page). So they can afford to do free share trades presumably.
Also they do not promise to always be free, so they may bring in charges when they have established a customer base.
 
Simon said:
The other broker was a actual share where they tighten the spread but still big. I just played on trading 212 virtual which allowed me to look at sell price - I've had the account ages just for the free shares they gave out but never used it. Indeed the spread is 0.1p too so yeah looks decent and my previous points were wrong. You do pay tax on them where a cfd doesn't but this is tiny, so it would seem trading 212 is a lot lower spread than i assumed. (and a lot lower than others)

Whats the withdraw time like? Assume no fees on that either?
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I don’t know I’m afraid, I don’t use trading 212 else I’d have looked at the spreads myself.
 
booyaka said:
There is no such thing as a free trade. Period.

There will be fractional differences in the bid/offer prices which will cover their costs
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Again though what’s your basis for this claim? It seems like an assumption and quite possibly a flawed one - it’s certainly not true in the general case that a free brokerage must pad the spread, see for example Robin Hood - it would break the law to do so as they need to adhere to NBBO. They get paid for flow, meaning some liquidity providers want their client order flow in order to capture that spread... that doesn’t necessitate enlarging it rather it’s an advantage simply having it rather than competing in a public LOB on an exchange.

In trading 212’s case they’re simply passing the orders through to IB. I think people blindly claiming an increase in spread are confusing this with CFD trading, which is OTC and involves a derivative not an actual equities trade that will be routed to an exchange.
 
Strong perfomance from the FTSE today up 1%, Rolls Royce up at 7% at £3.47, I hope some people got in at the £2.70 price last week - were the shares oversold previously?
HSBC ticking along nicely at £4.11.
 
A rising tide lifts all boats!

Ludicrous money to be made and/or lost with this current market. Just make sure you have a chair when the music stops.
 
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