/biz/ - Business & Finance

Bump...

Let me rephrase...

Let's say someone is working full time and is willing to put a large chunk of money into online stock trading. They're willing to devote 6-8 hours a day doing it, if necessary, either in actual trading or in research about trading or companies to trade in.

Have there be actual success stories? Are there people on /biz/ that have started this way and have moved on to doing this full time? Can actual wealth be built this way?

Or is it all a pipe-dream?

>>700263
pipe dream and jew meme

(less than 10% of all traders are successful)

>>700265

I would like to research this more. Do you have sources?

>>700268
Look up on John Bogle, he even said in a thesis of his, that only 25% of PROFESSIONAL money managers beat the market, so think about that...

>>700159
Is it possible? Yes. Is it easy? No. The biggest misconception I see is that you have to devote time to it. It's isn't about time spent staring at a trading screen jumping in an out of positions. This isn't poker where you learn to play and then play as many hands as you can.

Step 1 is to figure out what you're doing. You should be able to write out some basic rules that govern how you trade. That's the biggest time sink right there, just figuring shit out.

Once that's done, you can actually trade and see how well you do in practice. The thing I've found is that you don't have to spend crazy amounts of time actually trading if the time frame of your trades is long enough. Personally I make about 40% back on my starting capital per year sticking almost exclusively to weekly swing trades on Friday. I spend the rest of the time working an actual job. It's doable, but the onus is on you to figure out what you're doing first.

>>700270

Wait... so why are there consistently 75% more than usual? Wouldn't they get weeded out? Seems odd that people would consistently throw money at these people if they're just losing it?

>>700271

Thanks for the info. I take it you've done such things considering your advice? How much time did it take you to figure things out?

BUY DOGE
SHORT PRAN

>>700272
They're not losing the money, they're not beating the market.

It's easy to make money investing. It's pretty difficult to beat overall growth of the market.
It's impossible to beat the market on the long term. Only a handful of people actively trading ever beat the market on the long term.

Anyway, it requires you to have a competitive edge over other people, called alpha. Something nobody else knows or has that enables you to anticipate movements in the markets. Otherwise, it's just a blind guessing, which will eventually even itself out.

>>700281

Then why is it not defined as guessing or gambling.

When you say, "Make money investing," you mean over a short interval, then?

How long of an interval is it before the market (house) wins?

Honestly just looking for facts here or sent on the proper path to finding those facts myself.

>>700272
It took me about a year of watching the market and reading market education material to get a feel for the basics, and about 2 years of diving in and actually trying things until I got to the point where I wasn't fucking myself over with second guessing myself. I did OK during those first 2 years, but not as well as I should have. After that, it got really boring if predictable, except for when I would go out of town on Fridays and my system would say it was time to do a trade and I'd have to enter a few orders in on my phone.

At this point the only thing that really bothers me is the fact that either making 40% a year is unsustainable past a certain amount of capital, I've just gotten lucky, riding all that risk is going to bite me in the ass, or I'm surrounded by idiots who refuse to think you can outpace "the market".

Then again, a big part of this whole exercise is understanding your own risk profile. I'm still sitting in the 5 figure range, and 2 million is the point I can step back and just keep it in a nice safe 5% return and live comfortably.

>>700292

What market education material did you use for research?

What do you think it is? Do you feel you can sustain it or do you actually feel like you've gotten lucky so far?

>>700159
My opinion if you invest in companies. Read there financial sheets, and know their advantages over the competition. I think you can win, if you invest in stock movement. You're just speculating, and are going to get screwed.

>>700304

I'm not trying to offend you but it seems you're saying two different things at the same time.

>>700288
>When you say, "Make money investing," you mean over a short interval, then?
>How long of an interval is it before the market (house) wins?

You CAN beat the market long term. Its actually quite easy using proper leverage. Its not for everyone though. Its actually similar to poker success, in that you'll have 25% of people on some poker site who do it for a living, and 75% who think its a good idea and then lose money.

These threads almost always amount to a lot of people telling you what you can't do, and a handful of people saying you can. I say you should know what YOU are capable of and not let others dictate that for you. On the other hand, I don't know you, so opening a Vanguard account and putting it all in VOO may be the thing for you.


>>700301
Lets see, initially I blew a few bucks subscribing to Zack's rating system. In hindsight that was mostly a waste of money, though not a bad experience for seeing what safe stock look like. I spent some time on a forum called hotstockmarket just to see what people actively trading do. The guy who ran the thing went by StockJockey and had a couple of youtube videos about basic technical analysis. Beyond that, Investopedia every time I came across a new concept.

I don't feel like my returns are luck, but I also ride risk like a mother fucker. My account will drop up to 15% from its top in a matter of weeks, and I could lose 50% in the case of shit hitting the fan, but those are things I'm prepared for. The long term plan is to build capital to the point I don't have to worry about maintaining a career and then move that capital someplace a bit safer. I started with practically nothing though, so I'm basically riding risk while I'm still young to get to the point where I'll be financially comfortable.

>>700314

My complaint about investopedia is it's quite disorganized and filled with jargon. Other than memorizing the definitions (which I plan to do anyway) which articles would you feel are the best to start with?

I'm somewhat in your place now, at least at the start.

>On the other hand, I don't know you, so opening a Vanguard account and putting it all in VOO may be the thing for you.

Something to consider at first, anyway. I'm not averse to risk. I might ride it like you do after I get my feet wet.

>>700314

Anyway, thanks for the info.

>>700320
>My complaint about investopedia is it's quite disorganized and filled with jargon.

It is, which is why I only use it when I need to understand jargon and google the term. Investopedia just pops up a lot. Its a baby steps thing though. If you read an article about volatility ETFs that use options on the VIX to set their returns, it doesn't mean a whole lot unless you understand the terms.

The only other thing I'd bring up at this point is that I stick to ETFs myself. Its much easier in my mind to keep up with whatever an ETF is tracking than to try and pick stocks myself, mostly because I operate on a VERY small scale and getting the type of diversification I'd want nabbing individual stocks would take way more time and eat up way more brokerage fees than I want to deal with.

When people say picking stocks is for suckers, I'm right up there with them. Your actual returns are on you, based on risk = reward and vice versa.

>>700159
Most active trader cant beat a index fund (the market) so dont try

>>700307
I don't understand. Clarify a little bit for me.

>>700346

>I think you can win, if you invest in stock movement.
>You're just speculating, and are going to get screwed.

Sounds like opposing advice.

>>700348
Ok, whe. You invest, the first thing you should do is determine if the company is sound. Some questions to ask, does this company carry lots of debt? Can this company hold off competition? Is this company profitable? Then after assess the foundation ( is it good or bad) you try to buy the stock at a discount to what you value the company at. Many people may value companies different ways. I use the discount cash flows formula. In a nut shell, I value the company based on how much profit they make.

Then after you find a good company, you try to buy at a discount to what you valued them at. Investing in stock movement, not companies is investing in weather the stock will go up and down in a certain time period. Options, forex, are designed around this concept. You don't really have any ownership, your money is based on pure stock movement. If you invest in a good company, yes your money is based on stock movement, but good companies last long enough to become profitable.

Stock goes up and down. Stays level, you really can't predict it, but with a good company you really don't have to. Is this a little clearer?

>>700363

That's a lot of good info. Thank you.

>>700363
This sounds like quality advice but your spelling errors and grammar are off putting. Then again you don't need to be a good speller to make money

I've been looking into this same question myself. it occurred to me that it would be insanely hard to take a small account and make it a large one the conventional way buying and selling stocks. So against all conventional wisdom, i'm going the leverage route. But i devote waaaaay more time than 6-8 hours watching the market. But i also enjoy watching them evolve throughout the day so its not so bad. If i have to put a trade on at 3 in the morning and monitor it until noon then so be it but that puts a lot more cash in my pocket than beating my head against a wall at some shitty 9-5.
If everyone listened to the fukbois that said its impossible to make it as a trader then that 10% of successful people wouldn't exist. Don't let anybody tell you its impossible. Get fucking good at it. Eat, sleep, breathe, and shit the markets.

>>700569

For instance, wheat futures. (/zwk5) l could have shorted those contracts any time from 9:30 to 10 and i would have pocketed a grand today. 1000 bucks in 4 hours of sitting on my hands and watching the markets. Ill take that over watching a stock for 3 years hoping it eeks up a dollar

>>700573

Do you feel that there is a lot more risk involved in your method? I see what you mean by the earnings over time, which is something I'm willing to do as well just need to get into a position where I can.

And speaking of risk... at what point do you feel you have enough funds/capital to weather it out? Do you often lose money this way or does the amount of time and study you sink into it actually help lessen it?

>>701038

I only place a few trades a day. Maybe only one. I only ever risk 50 dollars per trade so my stoplosses are set accordingly. if the trade goes against me im out before i even have time to second guess myself. my account size is only 3000 so 50 bucks is roughly 2% of my total account give or take. I dont give myself much margin for error so I wait for something that feels and looks like an opportune position. Hell the opening price is the high or low of the day 1/3 of the time so statistically, i only have to be right a fraction of the time and i'm still ahead of the game. Watching the markets constantly just helps catch weird swings in price that happen late at night for no reason, and often these weird swings end up being highs and lows of the day.

>>701160

Interesting. Are you always going to risk only 2%? Would there be situations you would consider more than just one or a few trades a day? Or would you consider that undisciplined and simply strive not to do so?

>>700159
A lot of people on here are describing what I would call "investing" rather than "trading." Not that I am saying it is a bad idea; I think investing is a lot more usable for most people.

The process of buying stock in an undervalued company seems like a slower way to gain profits unless you have a lot of capital.

i.e. to get around 500 a day on an increase of 1-2 dollars you need at least 250 shares of that stock which will lock up most of your capital waiting for the increase.

A book I read on trading that I thought was very insightful was
http://www.amazon.com/Day-Trade-Online-Christopher-Farrell/dp/0471442992/ref=sr_1_3?ie=UTF8&qid=1427432338&sr=8-3&keywords=day+trade+online

I read it at barnes and noble but you can pick it up used for a couple of dollars. The strategy he explains is a very simple manipulation of the bid-ask spread to get around 150+ on trading slow moving stocks with very little volatility

>>701184
Disclaimer I have not actually implemented his strategy yet, but even reading it gives a lot of insight into how the market works

>>701184
>>701188

Thank you for your input. You might be right about the investing/trading terminology, but I feel like investment might just be a form of really long-term trading anyway, right?

Considering you haven't implement a trading strategy, I wonder, do you usually do investment? How has that panned out for you? Do you make a living this way?

>>701189
The only pitfall I really see with a longer term investing/trading strategy is that it is quite slow and if you want to make a living you're going to need to make your money a little quicker than the market. (my idea of a living is at least 2000 a month but obviously you'd like to make more if you are doing this full time). But it is by no means a bad strategy.

I'll give you a little summary on me real quick so I don't give you any false implications. I just turned 21 a couple months ago, I've been dead set on becoming a career trader for the since August of last year. I am currently building up capital to make my first trading account on TD so I haven't done anything you would consider stock investing or trading yet. I have played around with very short term trades using binary options on Nadex but that didn't work out well at all.

But yes my plan is to be a full-time trader while building a portfolio of long term investments to eventually take me out of day trading

>>701201
>But yes my plan is to be a full-time trader while building a portfolio of long term investments to eventually take me out of day trading
That does seem like the sensible course of action to take.

>>701208
I just don't seem myself at 40 trading in a room for 6 hours everyday.

There exists an ecosystem in the markets that must be sustained to a certain degree for at least the apex predators, which grants much of the other parts of the ecosystem allowance to exist.

The government is in control of this ecosystem through legislation. (think forex with FIFO rules)

>>701163

2% is max. 1% being ideal. regardless of account size. I have a target profit per day so if my first trade goes against me i just have to add $50 to my target. I also have a weekly goal in mind so if i have one great day it takes a lot of pressure off for the following days obviously. I don't really care how many trades it takes to accomplish that goal but the fewer the better.

>>701253

Did you decide this profit margin arbitrarily or did you average against what you usually make (or expect the market to make)?

I was thinking about playing around with $100 to see how difficult it really is. Has anybody done anything like this?

This could actually be a /biz/ general, everybody starts out with $100 and trades their way up, posting their progress on the way.

>>700159
A fool's errand

>>701281

Same. I was thinking if it was possible to turn $100 into $110 or something like it.

>>701284

Okay? I'm single. Video games bore me. I figure this could be my next video game. As long as I don't spend too much on it, say, whatever I was spending on games anyway, should be okay.

And if I make money, more power to me.

>though i'm actually doing this for the millions

>>701281
100$ is nothing. There's this thing called brokerage fees. Hell, you can't even purchase a single share of a bunch of stuff at 100$, and fuck penny stocks.

>>700159

So, I just found out about "Stock Simulators" on investopedia. Are these any good to practice by? Does anyone here use them?

>>701416

Expanding on this there are three listed in the article I was browsing.

>How the Market Works
>Wall Street Survivor
>Investopedia Simulator

Article in question...
>http://www.investopedia.com/articles/active-trading/070814/how-do-you-use-stock-simulators.asp

>>701281
>Pikers
REEEEEEE, get out of my stocks pikers!! REEEEEEEEEEEE!!!

>>700272
The market average gain is 8%, only 25% do better than 8% on investment a year. Unless you're a wizard you'll make ~$8 a year from your $100.

>>701465

Well, the idea is I work and continue to increase my base capital until I get it to something I can use effectively.

So, $100 bi-monthly, or something to the effect. Many people spend that much on entertainment. I figure this will get me just as stressed out and as long as I don't catastrophically fail just as rewarding.

>>701465
unless you're a wizard you probably wont even cover fees / comissions

>>701478

What do these usually run?

>>701485
Depending on the broker, 5-10$

>>701487
The caveat to that being some brokers do free commission on their own securities, so I think you can get an account with Vanguard and buy VOO without commission.

Also... the eternal question...

Why does a stock go up and down so much minute to minute?

Can anyone explain this behavior? There's no way an entire business's value is calculated that quickly.

Is there someone simply updating a computer somewhere regarding his chosen company's value with guesswork until he feels he gets it right or...?

>>701493
not exactly sure how it works but its based off of if people are buying or selling the stock. Pretty sure if there are an equal amount of people buying and selling the stock the price will stay the same, if there are more sellers than buyers it will go down and more buyers than sellers the price will go up.

>>701493
A lot of it is supply and demand at any given moment. Some of it has to do with valuation techniques and what shorthand investors use to calculate price. For example, a stock has what's called beta, which is basically a measure of how its prices moves with the market in general. Someone selling a lot of ABC may cause the over all market to drop 1%. Stock XYZ, which has a beta of .5, would be expected to drop .5%, but since it's price hasn't dropped yet, some wily algorithm trader sells it at the top thinking he can buy it back half a percent cheaper.

For someone basing prices on fundamentals, nothing has really changed, but the day traders who are looking at the technicals make trades hoping to profit from all the "noise" in price.

>>701364
>brokers fees
laughing forex retail traders.jpg

Get a load of this goy. Soon, you'll tell me about limited liquidity, or trading hours!

>>701493
http://www.investopedia.com/university/stocks/ probably wouldnt be a bad idea for you to read their basic thing on investing in general too.
http://www.investopedia.com/university/beginner/

>>701514

Thanks.

>>701508
>>701506

Good info, thanks again.

>>701511
Thanks doctor forex.

>>701520
Really, you can learn technical trading with $100 using forex, even if you don't intend to trade it later (it's more difficult than stock trading, though). With that small an account, you'll be paying with a slightly increased spread, but it's nothing to worry about. Just means you can't trade extremely short time frames (which you shouldn't, anyway).

>>701511
>>701520

>mfw your IDs are green and purple

>>700314
how much did you start with? $5000?

>>701577
10,000$ was the point where trading fees wouldn't eat more of my gains than what made it worth the trouble of doing. Assuming 10$ round trip, that's .1% you shave off every trade, which isn't too bad. at 1000$ that 1%, and if any given trade only returns 2-4%, that' a quarter to a half of your profit you're just giving to your broker.

Its also a good spot to set as a target, because before you even think of trading you should have 6 months of savings, and building the discipline to both set aside money for saving and having something besides your trading account as an emergency fund is pretty important. The last thing you want to do is get spooked at losing 10% of your capital because if you lose your job that's all you have left.