I'm about to embarass myself more than usual (stock trading related) ...

**Cliff Huckable** · 08-01-2008, 12:04 PM

this is pretty embarassing, but...

...I know nothing about money, stocks, etc. I couldn't be stupider about it, and it's about as far as you can get from what I usually do.

But when I was about 12, a friend at another school had a class in which they "bought" stocks. They didn't use real money, but acted as if they did. Our school didn't do it, so I did it on my own. I found it pretty fun. I've done it a couple of times as an adult, and just started again.

Previously I'd research a sector I found generally interesting, then find a company in that sector that's doing something interesting enough to read up on, and then "invest" or not. Once though, Nortel was in big trouble so I thought I'd try to make some "money" by taking advantage of the inevitable ups and downs when it opened the next day. That was alot more exciting than long-term, and it kind of hooked me on...whatever that's called.

So, I just started doing this again, and find I most enjoy finding a volatile stock, buying it, watching it fluctuate a little, and generally selling it anywhere from less than a minute to a couple of hours later.

Two of my picks from earlier this week (Sony and Garmin) are still at less than I paid, so I've still got them. Some, like Crocs (the shoe co) I make a good return (20.3%, in 90 minutes) but most are quite small (less than 1% return). I guess most people would laugh at a return of 0.2%, but unless I'm mistaken you still end up with more money than you had. And that's good, right?

Questions from a total idiot...

1. Does this kind of trading have a name?

2. How could I do best this "in real life"? Do you always have to pay a fee or percentage per trade?

3. What common mistakes do suckers such as myself make?

4. I generally use the Google Finance page for each stock, but the posted price doesn't always correspond to the last price on the chart. Why is that? Is Google Finance a good place to go?

5. I write this stuff down on paper to keep track. Is there a good online trading place where you can pretend to trade, and ultimately actually trade?

**brice618** · 08-01-2008, 12:14 PM

1. Speculation

2. Its really not a good Idea unless you like gambling or are completely dedicated to the stocks you own.

3. Getting started in speculation is kind of a mistake in itself compared to sound investment strategies. IE Mutual / Index funds and the like.

4. I use vangaurd, they keep track of most anything I want, but I don't speculate often. Don't know about "play trading" with them.

5. see four.

Just don't go wasting your money on ridiculous stocks that may run wildly (Up and down) and you'll probably make some money, and don't spend savings, just extra. Treat it like going to Vegas if you want to speculate.

**f2f** · 08-01-2008, 12:15 PM

all i know about real estate i learnt from playing monopoly.

HTH

**agentorange** · 08-01-2008, 12:23 PM

I don't have enough time, money, or interest to play the speculation game, but does all this buying & selling have implications for your tax filing? What kind of a pain in the ass is it to report, is it actual gains / losses, and is it worth it?

**OldLarry** · 08-01-2008, 12:37 PM

it's called day trading. don't do it-

**OldLarry** · 08-01-2008, 12:40 PM

http://www.time.com/time/digital/rep...nightmare.html

**pointedem** · 08-01-2008, 01:01 PM

scalping. many forex desks looks down on it.

**Lizhnik** · 08-01-2008, 01:13 PM

Originally Posted by Cliff Huckable

Two of my picks from earlier this week (Sony and Garmin) are still at less than I paid, so I've still got them.

This is the answer to question #3...

**4matic** · 08-01-2008, 01:19 PM

Originally Posted by Cliff Huckable

this is pretty embarassing, but...

...I know nothing about money, stocks, etc. I couldn't be stupider about it, and it's about as far as you can get from what I usually do.

But when I was about 12, a friend at another school had a class in which they "bought" stocks. They didn't use real money, but acted as if they did. Our school didn't do it, so I did it on my own. I found it pretty fun. I've done it a couple of times as an adult, and just started again.

Previously I'd research a sector I found generally interesting, then find a company in that sector that's doing something interesting enough to read up on, and then "invest" or not. Once though, Nortel was in big trouble so I thought I'd try to make some "money" by taking advantage of the inevitable ups and downs when it opened the next day. That was alot more exciting than long-term, and it kind of hooked me on...whatever that's called.

So, I just started doing this again, and find I most enjoy finding a volatile stock, buying it, watching it fluctuate a little, and generally selling it anywhere from less than a minute to a couple of hours later.

Two of my picks from earlier this week (Sony and Garmin) are still at less than I paid, so I've still got them. Some, like Crocs (the shoe co) I make a good return (20.3%, in 90 minutes) but most are quite small (less than 1% return). I guess most people would laugh at a return of 0.2%, but unless I'm mistaken you still end up with more money than you had. And that's good, right?

Questions from a total idiot...

1. Does this kind of trading have a name?

2. How could I do best this "in real life"? Do you always have to pay a fee or percentage per trade?

3. What common mistakes do suckers such as myself make?

4. I generally use the Google Finance page for each stock, but the posted price doesn't always correspond to the last price on the chart. Why is that? Is Google Finance a good place to go?

5. I write this stuff down on paper to keep track. Is there a good online trading place where you can pretend to trade, and ultimately actually trade?

1. Trading with no consequence is called "paper trading". And you know what you can do with that? Wipe your ass.. REAL money changes everything.

2. Use a low cost quality broker like Scott Trade or IB

3. Several. Most beginners take small profits and big losses. Also, it's human nature to not want to admit to being wrong so we change our original timeframe and risk. You bought the stock for the short term but change the trade into long term when it goes against you. Very common..

4. Google/Yahoo have delayed pricing.

**Joey Bag O' Donuts** · 08-01-2008, 01:23 PM

Originally Posted by OldLarry

it's called day trading. don't do it-

What he said. My company did a 10:1 reverse stock split, to keep the day traders at bay (retards).

**4matic** · 08-01-2008, 01:39 PM

Originally Posted by Joey Bag O' Donuts

What he said. My company did a 10:1 reverse stock split, to keep the day traders at bay (retards).

How would that keep daytraders away? Typically reverse splits are another opportunity to pound the stock.

**Joey Bag O' Donuts** · 08-01-2008, 01:49 PM

^^ your right it could, but by reducing outstanding shares while increasing the market price will hopefully attract a broader range of institutions and investors. At least thats how I understand it

**nopainnojane** · 08-01-2008, 01:58 PM

I did 6 years as a broker helping addicted daytraders at Charles Schwab. We had guys that would trade up to 50 times a day, in and out of different stocks, whatever was hot on CNBC at the time. A good daytrader will keep his account balance pretty constant, most are not good and would eventually lose it all.

It takes a lot of practice to do it well enough to be sucessful, and so few take the time to learn how to do it to minimize risk, and create consistancy. I equate it to being a good singles baseball hitter, keep your average of winning trades above .300 and don't let the losses eat you alive. You will find a home run or two out there as well. Technical analysis is your friend. Some good authors of strategy books are Martin Pring or John Murphy. They can give good tools to use to make better decisions.

For a novice investor, I would advise against, but if it is money you can afford to lose, got for it and see where it takes you.

**Cyber Cop** · 08-01-2008, 02:00 PM

i think the biggest risk is being shot by other day traders.

**Blatant** · 08-01-2008, 02:07 PM

i use scottrade. no complaints except their fund transfer options out of the acct. If you can afford to NOT have the money you're playing with then go for it. If you throw in 5k for example, and you know that if you didn't have that 5k your life would dramatically change then don't fck around w/ it. If you can sit back and say fck, sure would like to have that money back but...oh well, and all is good, your just 5k down, then go for it.

**Cliff Huckable** · 08-01-2008, 02:09 PM

Originally Posted by 4matic

1. Trading with no consequence is called "paper trading". And you know what you can do with that? Wipe your ass.. REAL money changes everything.

2. Use a low cost quality broker like Scott Trade or IB

3. Several. Most beginners take small profits and big losses. Also, it's human nature to not want to admit to being wrong so we change our original timeframe and risk. You bought the stock for the short term but change the trade into long term when it goes against you. Very common..

4. Google/Yahoo have delayed pricing.

How does real money change everything? (I certainly wouldn't use more than I could afford to lose.)

Yeah, my short term turned into long term. Pretty lame, I guess. What should I have done? (Other than "not speculate.)

I assume some places have real-time pricing. Google says it does. Is there anywhere for play-money idiots like me to get real-time...though, for my purposes it doesn't really matter, I guess...

Another question: I read a little about day-trading a couple of years ago. If I remember correctly they said you should have no less than $35,000 or $50,000. Why?

And what's so bad about day-trading/speculating?

And what is the OTC Bulliten Board? I was going to "trade" Katy Industries and that's where it is listed. (If "listed" is the right term.)

btw - thanks for all the answers! I'm learning!

**Brock Landers** · 08-01-2008, 02:10 PM

Originally Posted by nopainnojane

Technical analysis is your friend.

Burton Malkiel would disagree.

4matic is right, everything changes when you are using real live money. And when each trade costs you money, you look at things a little differently.

**nopainnojane** · 08-01-2008, 02:27 PM

Originally Posted by Brock Landers

Burton Malkiel would disagree.

4matic is right, everything changes when you are using real live money. And when each trade costs you money, you look at things a little differently.

I would say the way that live money changes things is it adds an element of emotion to the process that can be crippiling to some traders. The reasoning I think that Technical Analysis helps is that you can use it to find good entry and exit points on both the up and down side.

Fundamentals are good, but are only updated every 3 months, technical analysis is a way to read what the big money is doing on a given stock over a period of time.

**Brock Landers** · 08-01-2008, 02:31 PM

Originally Posted by nopainnojane

Fundamentals are good, but are only updated every 3 months, technical analysis is a way to read what the big money is doing on a given stock over a period of time.

Hell, Malkiel rips fundamentals too. "Charts show industry analysts as well as chartists dont exceed the returns of a buy and hold strategy" blah blah blah

Tech. analysis is pretty interesting though...

**Brock Landers** · 08-01-2008, 02:43 PM

Originally Posted by Cliff Huckable

How does real money change everything? (I certainly wouldn't use more than I could afford to lose.)

Yeah, my short term turned into long term. Pretty lame, I guess. What should I have done? (Other than "not speculate.)

I assume some places have real-time pricing. Google says it does. Is there anywhere for play-money idiots like me to get real-time...though, for my purposes it doesn't really matter, I guess...

Another question: I read a little about day-trading a couple of years ago. If I remember correctly they said you should have no less than $35,000 or $50,000. Why?

And what's so bad about day-trading/speculating?

And what is the OTC Bulliten Board? I was going to "trade" Katy Industries and that's where it is listed. (If "listed" is the right term.)

btw - thanks for all the answers! I'm learning!

1. People act differently when its real money on the line. Biases, tendencies, generalities. Doesnt mean youll succumb but its your hard earned dollars this time, whether its expendable or not.

2. Its common. Just stick to the fucking plan. And make investments/choices that would make it suitable to sticking to the plan (or plan to the investment from the beginning)

3. Bloomberg? Yahoo?

4. Speculating means you didnt do all the homework on WHY youre making the decision you are doing. Youre just taking a chance on profiting. Almost like a hunch. Investing is different. You can make money both ways.

5. OTC - over the counter. Not on a stock exchange. Usually low low prices.

**4matic** · 08-01-2008, 06:02 PM

Originally Posted by Cliff Huckable

How does real money change everything? (I certainly wouldn't use more than I could afford to lose.)

Yeah, my short term turned into long term. Pretty lame, I guess. What should I have done? (Other than "not speculate.)

I assume some places have real-time pricing. Google says it does. Is there anywhere for play-money idiots like me to get real-time...though, for my purposes it doesn't really matter, I guess...

Another question: I read a little about day-trading a couple of years ago. If I remember correctly they said you should have no less than $35,000 or $50,000. Why?

And what's so bad about day-trading/speculating?

And what is the OTC Bulliten Board? I was going to "trade" Katy Industries and that's where it is listed. (If "listed" is the right term.)

btw - thanks for all the answers! I'm learning!

OTC transaction costs are way to high for short term trading.

Daytrading is for pros only (where you are flat the market every day...)

Trading for anyone is fine. I would recomend a daily or weekly timeframe as a minimum and therefore you don't need realtime quotes or be chained to your computer all day.

You shouldn't have changed your timeframe or your reason for the trade. "When in doubt. Get out". "A half full boat will make it to Port in choppy waters. A full boat will sink,"

Most of the books I've read by pros say they risk no more than 2% on any one trade so if you have $5k you don't really have any risk tolerance.

Google and Yahoo do have "some" r/t pricing. So what.. It's worthless without the ability to use it the way you need to. A Full Reuters terminal doesn't have a base fee of $1k a month for nothing.

**4matic** · 08-01-2008, 06:19 PM

Originally Posted by agentorange

I don't have enough time, money, or interest to play the speculation game, but does all this buying & selling have implications for your tax filing? What kind of a pain in the ass is it to report, is it actual gains / losses, and is it worth it?

For tax purposes it's better to trade futures. 50% of your gains are long term and 50% are short term.

**carpathian** · 08-01-2008, 06:43 PM

With real estate you put your $5k down as 5% on a $100k house and you are still owning and making equity on the full 100%. Stick some renters in there and you might make some cash on top of the actual property value.

I am not an expert by any means. I have only bought one house for $67k ($4200 down) and sold it a year later for $125k. Easiest money I ever made. But that was in a 'soon to be' ski town where the value would obviously go up.(Smithers, BC)

Turned the profit into raw land in Girdwood, raw land in Smithers again and raw land in Nicaragua. Raw land is more money/risk(20-50%) down but easier to add value by building. I am in debt and working my ass off but it feels good to at least have a 'real thing', if not a place to sleep at night.

see photos

**AKturnanburn** · 08-02-2008, 02:34 AM

^^^ ha, I looked at that lot in Old Girdwood a few summers ago. There's another one for 1/3 more right off the highway and glacier creek I'm trying to snag.

**Hayduke** · 08-02-2008, 08:38 AM

If you want to get into this you need to:

a: Let someone who knows what they're doing, trade for you.

b: Decide on a Fundamental or Technical trade basis?

c: If Technical, design a trading sytem

Then, test the system being careful to avoid curve fitting. Some good software available, have a look the following:

http://www.tssupport.com/multicharts/
http://www.tradingblox.com/
http://tradesim.agecon.uiuc.edu/
http://www.openquant.com/site/

Then, if/when you go live. Stick to the rules of that system. As others have suggested, stick to the longer timeframes.

Bingo! You're going to be RICH BEYOND YOUR WILDEST DREAMS!!!!!!