Online Stock Trading

[Kruelgor]

Just a matter of time before you should be able to quit your day job. You and Paul Tudor Jones will be rubbing elbows soon enough.

Since you're "trading" can you explain why you don't just avoid a stock for 30 days to capture the tax loss? There's plenty of stocks to trade so why lose the benefit?

No matter how well I end up doing (if I continue the trend) I can never quit my job because I have a family and we need that crucial health insurance just in case. My wife also has a pre-existing condition which private insurance wont cover, but is covered through my work insurance. It's not uncommon for medical bills to total in the hundreds of thousands, and we've noticed that the hospitals/doctors charge patients with no insurance a whole lot more than they charge patients with insurance because we had one baby with insurance and another without insurance. Huge difference in the amount they charge. The insurance companies force the hosptials/doctors to stay below a certain price or the insurance companies wont pay the bill. It's an agreement thing they have going on, and the other reason is because hospitals/doctors don't expect to receive 100% of the bill from non-insured patients so they upcharge them.

As far as the 30 day thing. Leaving my money in a stock for 30+ days is a risk I wouldn't want to take because ANYTHING can happen during that time period and so the stock could sink even further. The other disadvantage is I prefer using the extra purchasing power I get from the margin account which there is daily interest and so I wouldn't want that interest accruing. I also already have a lot of tax deductions so my taxes aren't that high as it is. And finally, I'm anxious to reinvest the money into other stocks that will give me gains. I take my losses and move on to the next.

 

[Abaddon]

You talking about Egypt? The only investment I know of that is doing better because of the recent events in Egypt is crude oil. It jumped over $92 a barrel back on January 31st, but dropped some here in the past couple of days.

I'm so addicted to this stock market game that I watch Bloomberg channel like all the time. I sleep with it on. I can't get enough of it. It's like a sport.

Why not play foreign markets as well. Many more nights and days! NO SLEEP!

 

[Kruelgor]

Why not play foreign markets as well. Many more nights and days! NO SLEEP!

Risk scares the *bleep* out of me. I'm probably far more paranoid than the average investor, despite the fact I'm investing money I don't even need. It's just like extra spare cash lying around that I used to get started. But, the paranoia is why I have so many "defense" measures in place and tested my theories first for weeks and weeks with pretend money and fine tuned and tweaked my methodology in a German engineering fashion. I feel very confident and comfortable in the methodology I'm using, but to invest in anything while this Egyptian/Middle-East crisis is going on is too much for me to handle. I just have to wait it out. I've told myself I will just wait. It's hard to wait, but it's a discipline I feel is necessary to be successful in the long run.

Some people take $6,000 to Vegas with the willingness to lose it. I entered into the market with $6,000 also willing to lose it and am still willing to lose it all. I'm the type of person who will never go to a casino - NEVER!. I bought a casino computer game about 10 years ago and I did thorough tests and analysis with hundreds of different methodologies and nothing worked in the long run. It is, of course, always in the house's favor, but with the Stock Market it's a bit different. It's not vegas. It's educated gambling.

 

[Whomp]

Like right now, for example. 100% of my investment is sitting in a cash account until this mess in Egypt clears up. Then I'll start buying stocks again. Maybe in a few weeks.

I have all kinds of "defense" measures I take to prevent catastrophic losses.

I'm loving it.

Problem with this thinking is last week was the best week in US equities in the last nine weeks.

Empirical analyses aside, this is the most intellectually compelling argument against index funds, even for inexperienced investors. Surely there are low-fee ETFs that use more sophisticated measures?

You're starting to see more and more fundamental analysis being added from certain providers. It's a tough market to crack so it will be interesting to see how some of the big asset managers respond to change. Blackrock's iShares are starting to look at bringing terminating ETF's so they act more like bonds. Could be huge for income investors.

As far as the 30 day thing. Leaving my money in a stock for 30+ days is a risk I wouldn't want to take because ANYTHING can happen during that time period and so the stock could sink even further. The other disadvantage is I prefer using the extra purchasing power I get from the margin account which there is daily interest and so I wouldn't want that interest accruing. I also already have a lot of tax deductions so my taxes aren't that high as it is. And finally, I'm anxious to reinvest the money into other stocks that will give me gains. I take my losses and move on to the next.

Huh?

All you have to do is realize the loss and avoid this same stock you lost money on for 30 days and you keep the loss. It's called the "wash sale rule".

You should learn this benefit if you're trading because it will add enormously to your internal rate of return as a trader.

 

[Kruelgor]

Problem with this thinking is last week was the best week in US equities in the last nine weeks.

I don't think about that stuff. I ignore it. Once you make a decision that you're comfortable with you have to go with your decision and be happy, and plan for the next decision. You can't sit there and think if I had only done this or done that. It's unneeded anxiety. As a matter of fact, I've made it a personal rule that when I sell a stock regardless if it was for a gain or a loss, I never look at that stock again because it's old news to me and whatever it does after I sell it is completely irrelevant to me. I did all of that in my tests and experimentations with pretend money. I'm comfortable with my system I have now. It took me a long time to create it, but now I'm glad I spent that time.

You're starting to see more and more fundamental analysis being added from certain providers. It's a tough market to crack so it will be interesting to see how some of the big asset managers respond to change. Blackrock's iShares are starting to look at bringing terminating ETF's so they act more like bonds. Could be huge for income investors.
Huh?

I don't know much about ETFs and so I can't comment on it. I do have high respect for the analysts as they are a crucial element in the methodology I use to pick stocks. I remember a book I read when I was a kid called "The Richest Man In Babylon" and one of the rules was to make good use from the advice of financial experts. However, I've learned that they are not all equal and are not always right in their assessments, so you have to be careful to what level and to what extent you take their advice. It also matters how old their advice is because the market is a living breathing beast. Good advice for a stock today may be horrible advice tomorrow. It can change that quick.

All you have to do is realize the loss and avoid this same stock you lost money on for 30 days and you keep the loss. It's called the "wash sale rule".

Hmmm. Interesting. I'll have to read up on that. Thanks.

You should learn this benefit if you're trading because it will add enormously to your internal rate of return as a trader.

I'll look into it. Knowledge is power, for sure.

 

[JollyRoger]

As a matter of fact, I've made it a personal rule that when I sell a stock regardless if it was for a gain or a loss, I never look at that stock again because it's old news to me and whatever it does after I sell it is completely irrelevant to me.

Wouldn't it be relevant to determine if you made the right decision? Maybe you bailed out on a loss too soon or didn't get as much gain as you could have.

 

[Kruelgor]

Wouldn't it be relevant to determine if you made the right decision? Maybe you bailed out on a loss too soon or didn't get as much gain as you could have.

No, because I've already done enough of that with pretend money during my studies. It serves me no use anymore.

 

[JollyRoger]

So if you were to make it into the NFL, it wouldn't be necesary to watch game film anymore?

 

[Kruelgor]

So if you were to make it into the NFL, it wouldn't be necesary to watch game film anymore?

I use a very systematic approach for finding a stock, when to buy it, and when to sell it. It's a low stress methodology which I'm comfortable with. The methodology I use is not as complex as playing against a unique opponent every week as in the NFL. I'm so paranoid of risk that I had to create such a system to make me feel good about this whole thing.

However, the equivalent of "watching film" I guess you could say is where I spend about 8 hours of analyzing to find the right stock, per trade.

 

[JollyRoger]

Just be careful about trying to catch falling knives.

 

[JerichoHill]

I see a good bit of a gambler's personality Kruelgor. This is not a game, and you're sounding like a guy who knows the next run will bring him luck.

Myself, Whomp, MRT144, and other who have many years (Whomp has decades) have tried to encourage you to be a bit more cautious, and check your emotions. You are not taking this advice, so I hope that when the inevitable downturn occurs, you remember that we've weathered many of them, and perhaps learn something.

PS: No system eliminates all risk.

 

[Kruelgor]

I see a good bit of a gambler's personality Kruelgor.

Of course it's a game. Life is a game, and the stock market is a man made game. A gambler's personality? Perhaps, but I stated before I would NEVER step foot in a casino. I don't like odds that are against you. I like the odds to be in my favor.

 

[Kruelgor]

PS: No system eliminates all risk.

Per trade, you are right. For a series of trades, you are wrong.

If it were just a flipping of the coin, then you would be right, but such is not the case.

 

[JollyRoger]

Per trade, you are right. For a series of trades, you are wrong.

Any system (especially one relying on same day round trips) can have a series of trades that will wipe you out.

 

[Kruelgor]

Here is where the proof will be of whether or not my system works. This is how you will know.

If in a few years you see or hear of a great social movement called MAGOG (Military Alliance of Gog) then you will know how I financed it. If you see that the movement is a growing success then you will know that my methodology to tame the beast (stock market) worked.

I am done with this thread. That is all.

 

[mrt144]

None of that applies if you're borrowing on margin - meaning it's not anything you need to worry about if you're using someone like ETrade because they will make sure you're in compliance, which is the other beautiful thing about margin accounts, especially the part about $25,000. You don't need $25k to get started.

http://www.finra.org/investors/smartinvesting/advancedinvesting/daytrading/p005906

 

[Kruelgor]

http://www.finra.org/investors/smartinvesting/advancedinvesting/daytrading/p005906

The rules adopt a new term "pattern day trader," which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days

Guess what? My system calls for buying a stock on one day and selling it the following morning. Therefore, it's not the "same day". You can apply my method to same day trades too, which I sometimes do, but 95% of my trades are buy one day/sell the next day.

Doesn't apply to me. As I said before, I created my own game. I don't follow the rest.

I'm not going to get into the fine details of how my system works (it's priceless to me), but the point of this thread was to encourage others that they too can get into the stock market game with relative ease because of the Internet. I think everyone should consider getting into it. It's freedom and it's a new age for the people. The Internet has changed everything.

 

[JerichoHill]

But that's just not true, because its been that way for well over a decade. This isn't a new day.

And it also isn't a game. People lose their shirts in day-trading, which is what you're doing. You're betting like this

1) Buy a stock right before close
2) (Stuff Happens that you don't really have a grasp on)
3) Sell a stock the very next morning regardless
4) Profit?

I'm sorry you didn't want to open your mind to the many folks in this thread who have been where you are and wanted to tell you to slow down, that shared our crash and burn stories and lessons learned. You're day-trading whether or not you want to admit it with technicalities, you're buying and selling a stock withing 24 hours.

Finally, no system eliminates all risk. Do you understand the basic theory of CAP-M? What is a Sharpe Ratio and what does it measure?

 

[Abaddon]

What happens if all 4 shares go the wrong way.. GAME OVER.

 

[Holycannoli]

Finally, no system eliminates all risk. Do you understand the basic theory of CAP-M? What is a Sharpe Ratio and what does it measure?

I don't understand a lot of it. Where does someone go to learn it all? I can't find any decent courses in the area that teach it, and as far as books there's tons of them to choose from.

I'd rather invest than day trade myself. I'm not a gambler in the least bit, and the thought of that much daily risk frightens me. I also wouldn't be able to maintain a $25k minimum account. But before you dive in to it all you have to learn right?