Day trading

GameOver_2

If you think a stock chart, and a roulette wheel, is the same thing, ide advise you to stop trading.

Chrismaths

ide advice u 2 stup truding aswel, cos u g0t noo ideah lolrotfl haaaa!!!

Tim_L

Roulette is precisely the same as trading in shares, or indeed any risk based activity. You do not have the ability to predict the future, whatever you think: all you can do is calculate probabilities and measure them against risk.

There is a probability of an outcome, an entry cost and a return (or a loss).

If the ratio of return to risk is greater than the true probability of the outcome then a bet, or investment decision, is probably worth taking. For single numbers, roulette returns at 35/1 with true odds of 36/1 which is why it is risky for players and not risky for casinos.

Precisely the same sorts of calculation apply to any investment decision, short or long term. This is how Chrismaths makes his living, and it is how I make about the same amount as my salary betting on horses in my free time.

Determining true probabilities is where you need skill and experience, and to be absolutely frank, gameon, you haven't got this. You have a fairly poor investment strategy - herd following/bandwagon jumping, call it what you will, which is working at the moment because the market is ramping. If it were truly possible for a 23 year old chancer to accurately predict market movements following a short course from a 'mentor' then we would all be rich.

You will probably find out the hard way, particularly if you don't listen to people who actually understand risk. This is your choice, and your problem, ultimately. But please don't try to extrapolate your limited experience into the general case and start offering investment advice to others, because you will lead them into trouble.

shokadelika

Deemy wrote:

The secret to winning at gambling (be it stocks or poker) is money management

Is that the same as managing a Band !thought it had something to do with sector allocation P/E ratios risk etc as for Poker I'm a novice.I don't see the correlation between investing in well researched Funds and Gambling!?

shokadelika

Deemy wrote:

Been trading since 1985

During that period have day traded from time to time, all I can say it is the toughest thing to do !!!!

WHat I suggest is FORGET day trading - There is a 98% probability that you will lose all your money ! Thus you only have a 2% chance of succeeding at this stage, perhaps in 10 years time the probability of success will be better ? BUt for now your just lamb to the slaughter.

If you really want to get into trading then I suggest position trading by developing trading system that is 'mostly' mechanical.. even this is not easy and yuor looking at several YEARS before you get it right ! BUT at least it will provide you with some income IF you stick to the rules.

Personally, I still trade, but have found a much easier way of making money... ONLINE POKER !

Just goes to show Day Trading (FX)trading doesnt work eh and long term investing in good funds does! (famous quote:- its time not timing)been trading since 1985 in Unit Trusts funny made enough to pay my mortgage off ( thats including the tech crash)
Helps if you have lots of Vitamin d makes your sell button work faster me thinks!
Could you please explain your "mostly mechanical "system I am very interested :-).

GameOver_2

lol Chris.

It is ok, i get this sort of jelousy sometimes, most of the time i do not.

Chris, it would just make my week if you posted some charts (in real time) and told us what was going to happen to them, then we watch them, i would LOVE that.

So please, take it away.....

Tim_L

shokadelika wrote:

Is that the same as managing a Band !thought it had something to do with sector allocation P/E ratios risk etc as for Poker I'm a novice.I don't see the correlation between investing in well researched Funds and Gambling!?

The only difference is the word used, which is basically a social construction: "gambling"=inherently risky, profligate, "investing"=the reponsible way to save for your future. They are fundamentally the same thing. Gambling in the stock market is much the same as investing money on horse races or football games.

In both you risk money for a return. In both research and understanding of risk will give you enough edge to succeed, but you have to know what you're doing. Understanding of risk is to my mind the second most important thing after not running out of money.

The problem with using charts and analysis to work out investments is that the same information is available to everyone, and very many people try to use the available information, so value gets priced in instantly. No-one can predict the future, but what you can do is assess risk against return and work out whether you get a positive return over a series of transactions or bets to get a profit before you run out of money to invest or gamble.

equitydealer

Day trading is simply a very high risk form of investing. Traders use various techniques including L2 trades, charting and tech analysis. I put day trading amongst spread betting, CFDs and options trading in terms of risk.

It's as close as you get to gambling without calling it that.

free4440273

spread betting, by definition, IS gambling, as i pointed out in my earlier post. this is not to suggest you cannot make money from it - you can, provided you can sleep easy at night

equitydealer

Spread betting is gambling. What I was pointing out was that day trading is as risky as spread betting.