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Stock Trading Basics

Old 08-29-2015, 07:22 AM
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After reading several of the stock threads here and doing some research elsewhere, how did you guys that day trade or trade quite a bit learn the ropes? I consistently read to pick good companies. How do you know you are picking a good company based on stock price, and further project what that stick price is going to do? Are there any books or other means that give a good overall instruction? A lot of the companies you guys are throwing around, I've never even heard of, so I am curious how you even find them to begin watching them in the first place.
Old 08-29-2015, 07:24 AM
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Old 08-29-2015, 07:28 AM
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Originally Posted by chrispnet View Post
???
Old 08-29-2015, 07:32 AM
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...sorry...your candor took me by surprise.
Carry on...
Old 08-29-2015, 07:34 AM
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Originally Posted by dasouthards View Post
.... How do you know you are picking a good company based on stock price.. .
You don't.

That is like determining a good motor based on the color.

Read a basic investing book such as "all about asset allocation" by Rick Ferri and forget about day trading individual stocks.
Old 08-29-2015, 07:38 AM
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Originally Posted by My Turn View Post
You don't.

That is like determining a good motor based on the color.

Read a basic investing book such as "all about asset allocation" by Rick Ferri and forget about day trading individual stocks.
Thanks. That's what I am looking for... there's so many people giving advice, and from watching it over the past 6 months or so I've found that 90% are wrong and seem to be making it up as they go...

For example, you'll have the guy on CNBC that's been saying the market is going to tank for the last three years and when it finally corrects, he claims to be a genius for calling the market. In reality, he called it wrong 9/10 times so he is the exact opposite.
Old 08-29-2015, 07:39 AM
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Originally Posted by chrispnet View Post
...sorry...your candor took me by surprise.
Carry on...
Hey... the only dumb question is the one that isn't asked!
Old 08-29-2015, 07:39 AM
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Everyone who claims to KNOW the future is a shill
Old 08-29-2015, 07:46 AM
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Originally Posted by dasouthards View Post
Hey... the only dumb question is the one that isn't asked!
Old 08-29-2015, 08:32 AM
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http://www.schwab.com/public/schwab/...rces/education
Old 08-29-2015, 08:40 AM
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Any or all of these books will be well worth your time:

Amazon Amazon

Amazon Amazon

Amazon Amazon
Old 08-29-2015, 08:58 AM
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There was a sure fire method that worked a few yrs ago. Anything pimped on CNBC you could wait a few hrs for the runup then short the s#!t out of it, then cash out 2 weeks later. The big football player looking dude was the most reliable (at being dead wrong) forgot his name and firm.
Old 08-29-2015, 09:20 AM
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step 1) Buy a dart board
step 2) label the board with stock symbols
step 3) throw darts at board randomly
Step 4) buy those stocks which your darts picked for you.

Seriously, statistics show a complete random selection performs as well as 'managed' portfolios.

If you are just trying to gamble for fun with a potential upside (or downside) do a little research on some stocks of industries that you are familiar with and make some semi-educated purchases and see what happens.

I think I am going to start a DCA approach to an oil ETF since the oil companies are so low right now. looking for a long term hold
Old 08-29-2015, 09:41 AM
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It's really simple... Buy low... Sell high...!
Rebalancing asset allocation periodically forces you to do this...

Start with mutual funds. While of working age, income average by buying something from each paycheck. With this approach you'll be at least "80-for-20"...
Old 08-29-2015, 10:33 AM
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My daughter has been playing around with Delta. She bought some Wednesday morning and sold it in the afternoon, made $1238. She was very happy.
Old 08-29-2015, 11:10 AM
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Decide what and how you want to trade. What interested you?
Stocks
ETFs
Futures
Forex

Do you want to trade stocks or options?
Do you want to day trade, swing trade, buy and hold etc.

Learn about what interests you and why. Then dig deeper on that.

I like options but I also hate them sometimes because it's easier to loose 100% than it is with common stock. But the upside can be huge too. Sometimes 500% or more. It is also very complicated and I don't claim to know all the moving parts.

Also define your goal. Are you looking to be speculative or looking to build your retirement? How much risk are you willing to gamble? This can help you choose the type and methods that may work for you.
Old 08-29-2015, 03:12 PM
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Originally Posted by dasouthards View Post
After reading several of the stock threads here and doing some research elsewhere, how did you guys that day trade or trade quite a bit learn the ropes? I consistently read to pick good companies. How do you know you are picking a good company based on stock price, and further project what that stick price is going to do? Are there any books or other means that give a good overall instruction? A lot of the companies you guys are throwing around, I've never even heard of, so I am curious how you even find them to begin watching them in the first place.
My view, Trading is more about momentum than investing. The actual company is almost irrelevant. So, good companies, dividends, etc. aren't really considerations. Think roulette wheel over the long term.

One of the questions you might want to ask yourself, would I commit $10,000 to a trade versus the same dollars to a long term buy? If the answer is no to the trade, you might want to reconsider trading.

Stock traders, are like 6 pack charter captains there are lots of people that used to do it.

You also need to be careful about keeping track of your real returns be it it trading or investing. It is very easy to not know you real returns over a long period of time. You want to remember the winners, the losers not so much. This is especially true with dividends, over time.

Last edited by aubv; 08-30-2015 at 04:07 AM.
Old 08-29-2015, 03:34 PM
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Day trading and investing are 2 different things.I was day trading a couple years ago after watching and reading.Watching L2 all day is the key to day trading.I made over 250k the first full year with over 10,000 trades.The second year wasnt so good as something was going wrong as i got greedy and not setting stop lose in time.So i quit for a year and just started again this week.For the week im up $3k.Also you need to have $25k or more to do it the correct way.I trade momo stocks.I been trading TVIX all week.I might keep a stock for 1 minute to hours depends on whats going on.Gotta remember 80% of day traders lose money.STOP LOSE IS THE KEY.Tons of stress also.
Old 08-29-2015, 08:32 PM
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I spent almost a decade as a market maker in 60 stocks for a large firm trading over a million shares a day. If you want to be a day trader, the last thing you want to know is the stock name/what they do or what was the most current earnings report. Some of the symbols I traded I couldn't even tell you what the name of the company was. I also shunned pre market news, last thing you want to do is get an idea in your head instead of following momentum. I prefer graphs and love moving average lines and stochastic's.
Old 08-30-2015, 07:07 AM
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Day trading is alot like gambling. Very addictive. Having said that, I've done it and still do it a little. Guy above is right IMO about the stop loss order. I usually decide the max amt I'm willing to lose/risk on the trade before I even buy it. Making a few thousand in a few minutes or hours is quite the charge. And losing that much in the same amount of time is a horrible feeling, but at least you have control over the loss with a stop loss order.
Ignore the pundits on TV. Try a service that you have to pay for (anyone worth their salt will charge you something for info that has proven to be correct in the past). I've used "traders club". IMO not worth it. Grouchy little dude. Wrong more than right. I've found chartlabpro to be pretty good, not necessarily for stock picks, but for general direction of the markets, support levels. For guidance with the volatility products volatility made simple and trading volatility are good, just realize those vehicles are ultra risky. (TVIX is one of those). One other service that I currently use is deepcaster. As with any newsletter or recommendation, I always approach with skepticism; Earlier in the year I followed their recs, to see how they did. The earlier recommendations lost $. I noticed their last 3 recs though have produced two 40% and one 80% gain in less than a wk. They called this current downturn about 3-4 mos ago (they said 16000 dow by sept /oct). Maybe just luck.
Best of luck

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