hey there i am the new guy, i dont know fancy trading lingo hope you all wont laugh at me cliffs = looking for non volatile/stable stocks that cost under 25 a share and generally stay in the same range over time longer post = so i started looking at slv stock back in mid march because a buddy told me about it, he likes silver apparently, i look at the graph and see a price of 16.25 with a 'recent' low of around 12 and a 'recent' high of around 46 (past 5 years or so i believe) i have a background in risk vs reward and that looks tasty so i move some money to an account knowing basically nothing else about it other than what i saw on the graph and 'silver should always have value' the price goes up to like 16.75 by the time my money arrives in account and clearly i cant buy anymore as i could have just got at 16.25, i start checking it once a day and 6 weeks later it dips under 16 and i pounce so.... my thoughts are what if there are like 50 other stocks like this, that are pretty stable and mostly stay in the same range (slv been between 15.5 and like 17 the entire 3 months) that arent volatile and should always have value seems pretty easy to put a target by number in your head and wait for it (when the stock is at the low end of recent range) and then sell when it goes up 2 or if it goes down 1 does anyone have any other similar stocks in mind? you can piggy off my uber elite and ingenious strategy if you like am i missing something here? why is this an awful idea? also if the market hasn't crashed in 6 years and every graph looks like the left side of a mountain why not just short everything? thanks ill hang up and listen to your answers off air
Paper trade 10 picks, and see if you can win on 6 of them. Be clear about your time horizon, and balance the total return across all. So, if ABC costs $20/share and DEF $10/share, you'll have to buy 200 shares of DEF to (roughly) normalize return across all your picks. If you have superior information and/or insight, you can win, but be prepared for one or two of them to make a nasty move against you. You'll either have to take the loss, or sit with a deep float for a long long while.
It's an idea. Certainly not new, in fact very old. When everything goes down big, they will go down big right along with the market.Those are the moves that have converted many short term traders to long term investors. Also, take a look at wheat corn and beans. They can stay very range bound for a long time, especially in the winter. And can also be spread against each other and also calendar, especially old crop vs new crop. But highly compatible with a buy low sell high strategy. Also you are correct to consider intrinsic value which most commodities have to some extent. In your silver example, at certain low price they will reduce mining. Or in the ags, reduce acreage. What is the intrinsic value of Radio Shack? In some cases the only real value is real estate.
%% True, mr new ,G; silver should always have some value.Like top trenders, myself or sometimes polar bears trend$=====,== less commissions per profit. As far as shorting everything, that can work well targeting TGT trash LOL,or JCP,RL; but left side of mountain chart can keep going UP more for year$.
You know when you're going to buy it, but when would you sell it? 1) If it goes lower? Like today. What do you do? 2) If it goes up, when do you cash out? Also, how many shares are you buying and why? Do you have a plan? Or is your plan just buying when it's low compared to 'recent' low? If it was that easy then everyone would be making money. EDIT: Do you know when the market will go down? If you short stocks today but they rise 50-100% until the next crash, and on the crash it goes down 50% then you're losing money.
It's that easy and everybody that does it consistently makes money. Low means it's lower than it was. That's good enough. It's the taking of profits that get them. Buy low sell high never take a profit. It's the profit part most don't understand. Making any decision based on unrealized profits or losses always leads to problems. That part should not be in your plan. Liquidation or addition yes, profit and loss taking no.
What I meant is that you cannot predict the future, yes you know where low is and you buy, but who says that it won't go lower and lower. You need to know how to manage risk and have an exit strategy.
Whoever says it won't go lower after I have bought is right so rarely I can remember the times. The ones I really remember are the ones I bought that NEVER went higher.
with my current silver buy there is no real exit strategy because it is more of a long term thing (1 year plus so no short term capital gains tax) and any time it is at a price i like i can let it go, if not just hold but if it was a different stock for more of a trading strategy i would do the simple 2 for 1, buy at 16 and have a stop loss at 15 and sell at 18.... thanks for the wheat corn and beans idea will definitely look into them, do you happen to have any exact stock symbols i should be searching for?
You say you have a background in " risk vs reward", yet you have no understanding of risk. You idea will work until it doesnt. that could be your first trade or your 50th. If you dont go into a trade without a more or less predetermined exit point there will come a time when you'll loose 50% of your account and far more than you've made on your small but consistent gains on the way up. Your idea is widely practised. Traders thathave a stop loss point that is reasonable can actually make money on reversion to mean or mean reverson trading which is what your "idea" is called. its usually characterized by making tons of small consistent gains and having 1 or a few giant losses. the loss could be smaller or greater than what you've made on all the small gains depending on how good of a trader you are.