I've been doing some reflecting, hope to get some feedback from others that have been doing this for a while... Known: I have never met anyone realtime that made their fortune investing in individual stocks. I have lost a lot of money investing. If I continue to invest in stocks it will not change my current lifestyle, it will only effect retirement timing and comfort level. I started following the market in 2007, made and lost a lot of money. I maximize 401k for myself and spouse. I reflect and review my trading, it was too rapid and fast paced, principal error keeping me from the big money was not holding onto stocks in overall bull market, and not holding onto shorts in overall bear mkt. I was too leveraged. Now, I listen more to the inner small voice in my head and have held onto a couple of issues for many months with plans to hold for years. I am principally interested in just equities, with an eye on futures/commodities. I've been reading more from a buy and hold low cost index investing area, specifically that of John Bogle ilk. I started out with this stuff 10 years ago, might well have been better had I stayed the course, certainly so in my trading accounts. My attention to the market really helped out the big money in 401K, saving me from big losses and also guiding me back into the market within a few months of the overall bottom. So what I am trying to figure out is if this is a fools game or not? Is the excuse of paying all this tuition money really part of the game? Do people really turn it around and get profitable? Have any of you consistenly made money in stocks with buy and hold? It is tough to know what all the lies are that I tell myself. Any thoughts? If I was to give advice to anyone new, I'd say to maximize tax advantage accounts in low cost index funds and to not join the individual investor ranks.
Find a mentor,real mentor who made it, not some con artist.It`s almost impossible to make it on your own.
Investing in a range-bound market is a great way to rack up losses. S&P was ~breakeven this past decade. I would suggest a couple things. 1) Buy and hold will work again. Research the PIIGS and American debt crisis. Central Bankers will have no choice but to print money, as they have in recent years. This is bullish for equities, especially commodities. Long equities, miners and oil stocks will do well in the next 10 years. 2) Shift from a long-term investment perspective, to a swing-trading one. Make a couple trades a week. Use Daily or 4 hour charts. Learn technical analysis (trendlines, price action, support and resistance etc). Start small, maybe with a grand or two, get the hang of it, then size up. Traders can and do make money this way, everyday, using simple methods outlined above. You've got capital on your side. Most traders blow-up not because it's impossible, but because they're undercapitalized. Within 6 months, using real basic stuff, strict risk management, you can average at least 5% a month. Sounds like a lot with nice stake, and it is. The moral of the story is fundamental-based investing has gone to crap. In todays market, it's rarely about any rising star company (yes the googles, apples and bidus happen, but are the exception). Now, in this environment, asset prices are driven largely by monetary policy. A rising tide buoys all ships etc. Understand credit growth and destruction, it's toggle effect on risk-on/inflationary assets (equities/commodities/real estate) and risk-off/deflationary assets (bonds and cash), combine with simple trend following methods outlined above, and you're on your way.
Really, the market is a very tough and competitive battleground. Do you really think you have what it takes to beat the Michael Jordans of trading? I know I do not as an individual daytrader, especially since I have been working as a professional at a professional firm. Do yourself a favour and be realistic instead of listening to the cheerleaders and waste away more of your life savings.
Find a successful trader to mentor , somebody who is making 20 pips a day @ $100 per pip , but he will cost you at least $2k per day. Or get some clowns .
Actually you can make money daytrading, I have never read one book...had a mentor or anyone show me anything...never blown up my acct.. I taught myself with live trading from day 1 for 12 years now. Its not easy but just remember, it is easy to make money but hard to keep it. Anyone can get in a stock and make money, the hard part is keeping it. It takes a while to figure out what works for you but if your really determined to be successful it takes alot of time and effort. Oh, and I didn't go to Harvard. Thank God!!