Friday, April 3rd, 2015

what do you think of this stock trading theory?

I’m sure I’m not the first to try this approach. It is based on the f? Formula that whenever percent increase by1 principle, then every time you do this 100 times, the principle be? twice. So if half a percent gain on the sale of an action, use, and makes it 20 times a day? a, then doubling its principle? every 5 d? as.Me guess is something similar to this that the d? to traders trying to do. S? not always make one percent on each trade, but if half that in continuation? n, which still? to work. Win one percent on a population? N is not so difficult? Easy, right?

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13 Responses to “what do you think of this stock trading theory?”
  1. girl says:

    Read some stock tips on this site to help you with it

  2. Hoa N says:

    It’s not that hard. But in practice, it’s hard to do.Talk is easy, put in practice is hard
    Only person can do that is Warren buffet, but even him losing 900 millions bet on the currency
    His business return 29%/year after years

  3. the_knower_of_all_knowledge says:

    If someone here knew how to make piles of money in the stock market, they would be on a giant yacht in the Caribbean under a pile of naked chicks, not answering questions on the yahoo answer board. Remember it’s easy to make money when your already sitting on a pile of it. If you don’t have a pile, your going to have to work your ass off learning, trading, etc. etc. or be just stupid lucky. Hope this helps.

  4. fluffydogconnoisseur says:

    Transaction costs generally kill incremental strategies like this.

  5. yeeooow says:

    it’s even easier to loose 1%…..
    And don’t forget commissions and taxes you have to make more then 1% just to acheive 1%. As an example, you invest $1000 and make 1%. That comes out to $10. But even at scottrade, you pay $7 to buy and $7 to sell and $3 in taxes. So your 1% gain of $10 costs you $17. Even on $10,000, your gain is $100 but taxes and commisions take nearly half of it.

    investing isn’t like pitching quarters…. you actually need to learn things and it’s a lifelong endeavor….

    There is a difference between ‘traders’ and ‘investors’. In the long run traders are statistically losers. That’s why there are so few Warren Buffets in the world.

    success in anything of value takes effort, knowledge and experience. There is not some little trick that is going to make you rich.

    If you’re interested, here are some things you can learn to be an investor. It’s not as exciting, but it is more successful…. you can always use 10-15% of your portfolio to gamble with, but learn to be an investor with the bulk of it.

    Start by getting a subscription to Barrons or Investors Business Daily… Do this for 6 months or a year. At first, It seems a bit mysterious, but pretty soon you start to understand the terms and things that investors are looking for and what they are afraid of

    Go out to the internet and search on the following subjects. Become very familiar with the concepts.
    Asset allocation
    Long term investing
    inflation
    Roth ira vs ira
    Large med small cap
    Value vs growth
    Indexed mutual funds
    No load mutual funds
    ETF
    Sector funds
    Bonds CD preferred stock
    dividends
    International funds
    Market cycles
    volatility
    Fundamental analysis
    Technical analysis

    In most cases, I think it is wise to use indexed mutual funds and ETF’s to build the base of your portfolio.

    Good luck

  6. dredude52 says:

    You’re playing with numbers from a presumption that you will be one out ten traders that can make any winning trades at all.

    A winning trader does not focus on how much money he can can make, but rather from a standpoint of risk. What you’re computing is the sure sign of a novice.

    Logically, this should work if you can have better than 50% winning trades with a reward/risk ratio of 2:1, and use good money management.

    What you’re forgetting is that the stock market is neither rational nor logical, and is based instead on human emotion. Multiply that by 20 times and see what you get.

  7. Seeing Clearly says:

    Read Jason Kelly’s book: The Neatest Little Guide to Stock Market Investing.

    It’s a good place to start in order to avoid mistakes…. that doesn’t mean you won’t, but it can steer you away from dumb ones.

  8. lguerraburgos says:

    As a day trader, I can tell you that commission costs will eat you up. As the above post mentioned. Even when you pay less than $1 on commissions, it’s bad enough when you look your montlhy statement and find out you paid $200 on trade commissions. (note if you want to day trade paying more than $1 in commisions, you better go to the slot machines).
    If you make more than 30% of yearly returns you should be more than happy day trading. Of course you haven’t heard of options, since you can make a better case of big returns in short time with OTM options.

  9. David D says:

    There are some useful tips here.

  10. Turley M says:

    First, it would only take 72 times if you re-invest the gains. The rule of 72 is 72 divided by the rate of return, which gives how many compounding periods it takes to double the principal. If a mutual fund returns 12% a year, The initial investment will have doubled in 6 years

    If you just re-invest the original principal and pocket all gains, the it would take 100 times.

    To make a 1% gain 20 times in one day is 22% total gain is impossible.
    There are 6.5 hours in the trading day, allowing 20 minutes for each trade. Buying a stock and it going up 1% in 20 minutes is a rare occurance. And doing it 20 times in one day is impossible. If you lose 1% in 20 minutes, then crucial time is wasted, and now winning trades are needed to get back on track. Assuming, that you lose 1% on 1 out of 5 trades, then instead of 72 times it would take about 120 times to double your original investment.

    Tossing in the factors of bid/ask spreads and commisions means that one would need more than a 1% gain. Capital gain taxes will eat in up that too.

    Bottom line, years and years of academic research shows that its possible to make any money day-trading the market. If it were possible to make decent money, everyone would be doing it. A small fraction of those who day-trade make money overtime. Stocks with daily price moves large enough to trade also are the riskiest (high beta) Thus, on a risk adjusted basis, the gains are no better than buying the s&p average.

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