/biz/ - Business & Finance

[Anonymous No.11497890]

So. The average yearly income of a mutual fund is around 10 percent. 20 if its a risky one.

I have never traded but I've been doing research on the topic for about two months now and I think I'm ready. But I was wondering if you guys could tell me if my plan is retarded.

Stocks even for big companies seem to go up or down by a few points each day but generally trend very slowly up.

Could I not just wait for a big company like Microsoft or Wal-Mart or Disney to drop five points and buy then and just sell when it raises a few days later as it surely will unless fucking Microsoft is about to crash which won't happen the worst case is I have the money tied up a couple weeks until it goes back up.

I know this is basically day trading and people can lose a ton but I don't really see how unless you sell at every slight dip like its the end of the world.

It seems like you could make that yearly 20 percent pretty safely in a few months. Also what is the fastest way to have my stock purchase processed that's not being on the floor obviously. You know, so I don't click buy at $100 and its $105 when it goes through.

[Anonymous No.11497938]

YEAH DUDE THIS IS THE BEST IDEA EVER

YOU ARE A FUCKING GENIUS

YOUR 2 MONTHS OF RESEARCH HAVE PREPARED YOU

YOU SURE KNOW THOSE BIG COMPANIES

YOU SURE KNOW HOW THE MARKETS WORK

FAGGOT

[Anonymous No.11497940]

>>11497890
your strategy is essentially a martingale betting system that amounts to picking up pennies in front of a steam roller. look up the story of the company called long term capital management

[Anonymous No.11497950]

>>11497890
Well anon it is not so simple. Stocks go down always for a reason, abd you have to figure out if the reason is retarded and bound to revert or actually makes sense and the market price is getting adjusted to new information like a bad earnings report.

[Anonymous No.11497964]

>get into mutual fund
>after a year, if the return was 10%, take out 5%
>8%, take out 4%
>etc

This is the good strategy, right?

[Anonymous No.11497973]

>>11497938
Its a question dude.

Yea, my short research has led me to a question.

[Anonymous No.11497978]

>>11497890
>I have never traded but I've been doing research on the topic for about two months now and I think I'm ready.

Yes. Your plan is good. Please continue.

[Anonymous No.11498013]

>Could I not just wait for a big company like Microsoft or Wal-Mart or Disney to drop five points and buy then and just sell when it raises a few days later as it surely will
so what happens if you buy every slight dip but then they keep going down to the point of 5% losses? and then a small recovery with more losses the next week?
have you even been paying attention to the market for the past month?

[Anonymous No.11498032]

How do you know it will go back up after it drops. Trading looks easy from the outside anon, your best bet is to use your strategy and see if you get fucked or not

[Anonymous No.11498059]

>>11498013
Keep waiting. Again unless Disney or Wal-Mart crashes it'll go back.

[Anonymous No.11498073]

>>11497940
Ok. I see, basically it will work like i think until a recession or something similar and I'm fucked

[Anonymous No.11498087]

>>11498059
this is just called going long. buy into an etf, and if you want to get sexy buy into an etf with a theme like a certain industry or a sector or some shit.

[Anonymous No.11498106]

>>11497973
YOUR QUESTION SHOULD HAVE LED YOU TO GOOGLE

HONESTLY YOUR WALL OF TEXT WAS SO DUMB A FUCKING 5TH GRADER WHO SPENDS A 'MONTH' RESEARCHING WOULD HAVE A BETTER GRASP ON THE FUCKING MARKET THAN YOU

JUST OPEN UP A FUCKING ROBINHOOD AND PUT YOUR LIFE SAVINGS IN IT ALREADY SO WE CAN READ YOUR THREAD IN 2 WEEKS HOW YOU'RE DOWN 10% AND SCARED

[Anonymous No.11498174]

>>11498106
Only the last section had something that is easy to Google. Of course Google could lead to a roundabout answer for the rest like it can for anything so that changes nothing.

Also I put plenty of intentions to section off thoughts which is not a text wall. I also said nothing about the amount and have indicated a willingness to wait for increases and do research. I also said two months not one.

So what the fuck are you bucket crabs on about? Its a simple question from someone trying to learn more about a topic this board is dedicated to.

[Anonymous No.11498181]

>>11497890

You would probably want to learn and focus on market cycles and the different sectors and driving factors of each particular market. So there will be a lot of fundamentals involved.

As for mutual funds, you have to remember that they are moving billions of dollars through the market, so 10% is very significant.

Buying dips on particularly strong companies is supposed to be pretty safe and more of an long term investment than trading. Good luck.

[Anonymous No.11498195]

>>11497890
>>11498073
I use this strategy, it is quite common in pro mgmt but it needs to work both ways. If you’ll buy a 5% drop you’ll sell a 5% bump. If you’ll accumulate you need to distribute. Otherwise you end up continually buying into the uptrend, raising your average price and get fucked on a swift move down. I’m down 8% or so for the year now because I didn’t sell when prices went lower. Now they’re even lower and I really can’t sell. See how you end up trapped like that?
Best way to invest is to buy strong companies with a 20 year vision. Buy them for the dividends. Price is meaningless then. This is not as easy as it sounds, sometimes the hardest thing to do is nothing at all.
>execution time
Broker, pick one.
>But i want to skip them
You can’t afford that.

[Anonymous No.11498221]

>>11497890
Fuck your research put it all on 15 black.

[Anonymous No.11498252]

>>11498073
yeah, or basically just the fact that any random thing could happen even outside of a recession that brings the stock much lower and is not yet public information. usually in complete meltdowns of a stock due to a fundamental reason (i.e. the CEO being investigated for ties to terrorism, a natural disaster of some kind, any kind of quirky event specific to the company) it will start off with insiders or people who have found out dumping, that's when you would buy in when it's down 5%, then the news comes out and the next day it collapses. so it's weighing how often you get stuck in a losing trade vs how much you can regularly make, while also realisically evaluating the chance you'll ever be ruined entirely. it's not a bad idea though if you use risk management, but it should be priced in

[Anonymous No.11498282]

>>11498073
your question basically amounts to "what if i buy low and sell high" which is a waste of time for all of us because what you need it to do about four more months of research

[Anonymous No.11498291]

>>11498181
Maybe I should focus on a few industries or companies and learn them instead of just big companies and small.

Everything seems to be focused on the big 500 or penny stocks I guess I just naturally started looking at it that way.

[Anonymous No.11498345]

>>11498282
this

[Anonymous No.11498365]

>>11498252
Ok. So if I'm going to try this learn about the company and start small to see if I can do it.

Ok. That was pretty much what I had in mind but thanks for laying it out like that.

[Anonymous No.11498395]

>>11498282
It seemed like that's what they all boil down to. People hate the "buy low sell high" advice because it applies to everyone kinda like telling a depressed person to get over it.

Do you have any better trading strategies or just ones you prefer?

[Anonymous No.11498449]

>>11498395
the trading strategy is to project, not to wait. do research. made predictions. do you think a stock is going to go up? down? will their earnings be higher than expected? how's eps?what's the Fed gonna do with interest rates, and how will that affect the market?

yeah, sure, you could just buy according to what the charts are doing but if you want to make more money you'll have to do more work than that

[Anonymous No.11498504]

>>11498395
why dont you pull up a chart with stocks you like and pick points on where your strategy would tell you to buy and sell and see if the results are to your liking

[Anonymous No.11498554]

>>11497938
Fpbp

[Anonymous No.11499202]

Buying the dip (then selling the bounce) is a good idea OP.
This is how I trade.
But it takes experience to know when to buy.
Otherwise you're gonna end up buying too early, then start shitting your pants while it keeps going down.

The other guy called it a martingale, because one good strategy is to layer your buys to increase the lower it goes.
Although legitimate bad news that caused the price to crash can wipe you out. Months or even years of trading earnings can be lost in a single bad trade if you trade that way.

And even if you make good calls most of the time (after gaining some experience and paying the "trading tuition fee" i.e. learning from your losing trades), you'll still never be able to predict the exact bottom.
And watching it continue to go down, waiting for the bounce, it THE MOST stressful thing ever. I feel myself aging literal years in just days or weeks during such trades. It's not as easy as it sounds on paper.