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Shawn

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Day trading, long term investments? Go.
 

Shawn

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Cash is king
Well, with a good risk management setup, you're literally turning cash into more cash if you know what you're doing day trading. Basically selling and getting out of a market within a day after buying can bring some quick cash. Of course you will lose sometimes, also.
 

Jon

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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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pcbjr

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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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Good advice, Jon!
May I toss in a couple thoughts that I think dovetail?
Invest in yourself and build a little personal capital before gambling it and when there are positive personal returns, roll those over ... so 1) believe in yourself rationally and reasonably; 2) take what you know and believe, invest just a little of it, and test it without much risk; 3) put your capital in something you believe in, but watch it constantly to make sure your belief isn't just a wishful dream; 4) don't invest like buying a lotto ticket; and 5) use a professional if you are going more than 5% of your monthly disposable income into the market (at least until you are real comfortable understanding the whole ball of wax).
 

Shawn

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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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The people that pay for those courses about "getting rich" quick and all that, were never going to be successful as a trader imo. They were more of the type who would follow blind guidance and not learn how to analyze levels correctly. Basically the type that would buy into a stock to flip based on a news or PR article that recently came out. To win in that arena, you have to start purchasing at the low point of the accumulation period (most "experts" try to call this the consolidation period or "the market doens't know what it's doing).. which is wrong.

Then the idea is to sell after an accumulation period at a specific point you've chosen afterwards. Usually after a long accumulation period, there will eventually be a major spike as a snapback response because there is less of the stock on the market, and then some good news comes out.. you get the idea. Most people just end up purchasing way too high after the rise has begun.

I agree though, you will lose a lot and if anyone's going to try it, there is NOTHING easy about it. You have to learn to lick your wounds and take losses.. and overall you must treat it as an actual job. Sure, you can get "lucky" sometimes.. but more often than not, you will drain your account if you go at it with no discipline... and those "get rich check our 100% full proof system out" guys feed off it.
 
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Shawn

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I would also like to put out there for anyone wondering about any kind of trading, investing, etc. you can use paper trading to learn the systems, how it works, etc. Kind of like fake money in poker.
 

snowlover91

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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.
 

Shawn

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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.
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.
 

Rain Cold

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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, and more has to be added in increasingly larger amounts to keep the ball in the air. 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.
 

Shawn

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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.
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?
 

snowlover91

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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 I was originally with Scottrade and then they were bought out by TD Ameritrade and that’s when my trades went downhill and lost all I had earned from day trading. Their platform is so much different than Scottrade was and the Scottrade one I had taken years to learn and finally mastered it. Most of that was from two really good stocks I found, the first one went crazy and turned $500 into $8k and the second took the $8k to $46k. I waited too long to sell it, greed, and only got $12k from it when I sold it. Then from there learning the new TD Ameritrade system I struggled to adjust to the platform and make timely trades.

Most of my day trading was on low priced penny stocks with a price between .002 and .005 which was my target range. I would find one that had a solid news catalyst and industry along with good transparency and ride the momentum. The Scottrade platform was super useful pre-market for identifying the type of pre-market action that usually tells you all you need to know for pennies. The TD one wasn’t as useful for me. I may try again in the near future if I ever have time for it, I know a few people who do this as their day job and make over $100k a month doing it and retired in their 20s lol. For now though I’m more focused on the slow and steady method.
 

Rain Cold

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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?
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 really like this guy. I don't subscribe to his stuff, but I frequently listen to his videos. He knows his stuff and is a good teacher. I'd recommend giving him a listen.

 

DustinWx

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Ive made several thousand with mutual funds this year
 

BirdManDoomW

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You consider the lottery an investment? Ok
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.
 

WeatherNC

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Someone a lot smarter in this area told me you can't beat the market, I took his advice about 3 years ago and have aligned as closely as possible with the S&P. No stocks, just a single fund (FBGRX) in both 401s and the Roth. We were up just over 33% last year, that's after 36% in 2017. I am trying to learn when to exit in to bonds or money market, and when to go back in, a 2008 redux would be painful at this stage and push back retirement several years.

Right now my go for exit is a 10% drop in the 90 day trailing return. I'm 39 and on track to be done at 55, assuming 8% YoY. We max out the Roth and contributions to the 401s are set to 14% pre-tax for 2020. One mistake I made was to keep the contribution percentage flat at the employer match, we changed this about 8 years ago going to 1% increase each year, for 2020 and moving forward, I bumped it to 2%. This is now helping to offset our tax exposure as earnings grow.
 
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