Cash is king
Good advice, Jon!Day trading isn’t worth it, most people end up losing big because they try to trade on technical analysis and experience will tell you it doesn’t always work out. Most day traders make money from their YouTube’s or day trading websites teaching technical analysis...of someone’s selling “lessons” saying they got rich fast, there’s your red flag. Those lessons being bought is their income, not day trading. I’ve been up $12k on a small investment in a penny stock. I’ve lost big. Won big. Been there done that. The best advice is to stay away.
Long term holds in mutual funds are the best bet. Max out your Roth IRA each year and with the extra money you can throw some in an individual account to play with.
But never put all your eggs in one basket. Diversify your funds and keep up with the market and best performing funds.
For example, I’ve been in this long. Getting a generous return. https://www.zacks.com/funds/mutual-fund/quote/FSPTX the idea here is it’s diversifying, with dozens of tech stocks bought by the fund manager. As long as tech does well, this does well. Apple is 20% of the fund, hence the 50% return this year. Still, it’s good. Been in it 2 years.
If you want to pick a single stock, do your research. Make sure it’s a company YOU believe in, don’t go in blind because an analyst recommends it or upgrades their price target. Do your own research...as long as financials are good and the chart looks good, go for it. Just remember to set a “stop loss” so you can sell in the event it tanks.
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Day trading isn’t worth it, most people end up losing big because they try to trade on technical analysis and experience will tell you it doesn’t always work out. Most day traders make money from their YouTube’s or day trading websites teaching technical analysis...of someone’s selling “lessons” saying they got rich fast, there’s your red flag. Those lessons being bought is their income, not day trading. I’ve been up $12k on a small investment in a penny stock. I’ve lost big. Won big. Been there done that. The best advice is to stay away.
Long term holds in mutual funds are the best bet. Max out your Roth IRA each year and with the extra money you can throw some in an individual account to play with.
But never put all your eggs in one basket. Diversify your funds and keep up with the market and best performing funds.
For example, I’ve been in this long. Getting a generous return. https://www.zacks.com/funds/mutual-fund/quote/FSPTX the idea here is it’s diversifying, with dozens of tech stocks bought by the fund manager. As long as tech does well, this does well. Apple is 20% of the fund, hence the 50% return this year. Still, it’s good. Been in it 2 years.
If you want to pick a single stock, do your research. Make sure it’s a company YOU believe in, don’t go in blind because an analyst recommends it or upgrades their price target. Do your own research...as long as financials are good and the chart looks good, go for it. Just remember to set a “stop loss” so you can sell in the event it tanks.
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I like to go with mutual funds, slow and steady wins the race IMO. I usually will go for one that has a long track record of consistent, solid performance and that also pays a capital gain at the end of the year. This helps with increasing the number of shares you have with time. One I really like is RGAGX, a solid fund with a long track record averaging around 14% a year since inception. It also pays out around a 6-10% capital gain at the end of each year if performance is good. If you have a vision for 30+ years down the line it can be quite beneficial.
Day trading I used to do with penny stocks but haven't in awhile. I had some good luck, turned $500 to $46k in a few weeks but then made some bad decisions with stocks to invest in after that and lost pretty much all of it lol. It's something that requires a ton of knowledge, experience and time to succeed in. I should have taken the $46k and called it a day but instead got greedy and that's where it came back to bite me and I ended up making some bad ones leaving me with only $100 left lol. Part of that was due to my broker getting bought out by another company and the new trading system/research methods were significantly different. Live and learn.
The stock market and the atmosphere are a lot alike. They're both fluid, somewhat predictable, living, breathing systems. They're both somewhat cyclical and can both be understood and simultaneously confounding. They also have one other neat thing in common: Both have no shortage of magical indicators/indexes from Billy Bob's Indicator Shop that people glom onto in order to get a leg up on everyone else. And both will make fools out of everyone, if you're in the game long enough.
Day trading can be done in quite a lucrative fashion. But the key is understanding the general psychology of the market and how the market works and understanding your own psychology. You have to maintain a high level of focus, leave emotion at the door, and strictly treat it as a business, being very disciplined and deliberate with your trading. Know entry points and exit points. Keep your loses short, and take profits appropriately. If you can maximize discipline and minimize emotion, you can make a lot of money over time.
Investing is much more appropriate for most people, as they don't have the time or the emotional rigor it takes to learn to day trade effectively. The key to investing is diversity and understanding your risk tolerance. I'd also recommend paying attention to macro trends as well. The old idea that the market always goes up over time, while true, is misleading. Putting all of your money to work at the top of a bull market and riding the train may cost you more than a decade of lost capital.
The world is changing. Monetary policy has run amok. Central banks are currently "all in" to prop up markets and keep them rising, as they have become the hallmark of economic health. At the same time, leverage/debt is also at all time highs across virtually all sectors. This is an incredibly unstable system. It's wise to at least pay attention to that, as you think about short and long term investing.
Exactly. The key from my understanding is to never exceed 2% of your funds on an investment. Sure, you will not be able to buy as much stock, but making 200-500 in a day before 10 AM is a win in my opinion. That bug usually bites everyone.. the greed.. stay humble. And broker choice is key. Some may be expensive, but they are for a reason!
It looks like you found success, you just over traded/did it. Did you research into identifying levels and all that type of stuff to succeed or was it more of a luck deal? Cause if you used a strategy to turn your trade profitable, you may have a knack for it if you learn the deeper things.
Yeah man, you got the gist of it. I would really study basic technical analysis. @Jon mentioned that there are a lot of internet folks who will sell you their hot trading methodology. I think in some cases, that can be useful. There are a trillion technical indicators. But you don't really need all that many. You need to know how to understand support and resistance and understand divergences and basic chart patterns. The market is essentially an amalgamation of mass psychology (and computer programs -- incidentally, most of the trading that occurs on a daily basis is algo-driven. That said, the algos are still programmed based on human input). Psychology is why patterns repeat. Understanding these scenarios can allow you to tilt the risk/reward ratio strongly in your favor. It also allows you to understand where you're wrong in a trade.I'm new to it, but from what I can gather and research so far, a lot of these so called "Traders" or "Wannabe traders" in the day game 100% lack the discipline and emotional control to keep from dumping more into a losing battle. Like, if you set a loss at 1.50 a share, you cut your losses and exit. It is seeming to me, day trading is something you can lose 7/10 trades on and still come out quite profitable. On paper 7/10 trade losses sounds bad, but it's not.
It also seems like, some people will hold onto a trade all day, hoping it will eventually become profitable, and they end up selling it off with a major loss, instead of being disciplined enough to accept the loss early and move on. That is where the professional traders make their money.. off the traders who can't control themselves or react based on a news article alone. If you're purchasing a trade to make a profit after the trend upwards happens, you're too late. You may still make profit.. but you're not going to make what you could have and you're doing it wrong.
It's risk control and getting out before you lose it all, research your strategy, and tweak it. Some trades just suck. They seem great on paper.. all the boxes ticked.. and like you said about the atmosphere, a pesky warm nose sneaks in the mid levels and borks the whole damn thing.
If I ever start day trading, it's going to be after 6 months + of using Paper Trading through Think or Swim, treating it like real money and what I would be using.. and actually trying to minimize all risk. What is the point of using play money/buying 1000 shares if that is not what you can afford to do when you get started? I get it, it's play money, but it will develop bad habits, imo.
Those are a few more thoughts, and again, I am new, but I hope my general thinking is correct?
You consider the lottery an investment? OkPowerball to top 400 million this week. 1 winner last night from NC won 1 mil.
It’s an investment in education. I have received several grand in grants from the NC lottery fund while in college. I don’t mind to give back a few dollars for someone else.You consider the lottery an investment? Ok