Does the value of your stock change with the price?

ChesterDog

NewKid, the way you are thinking definitely indicates a strong interest in trading, based on rapid and frequent movements in share prices: what could generally be considered 'noise' overlying the prevailing longer term trend in price movements that one might call the 'signal'.

The idea can look quite exciting, but the reality is almost certainly that you will end up the loser.

Most investors would consider individual equities - even those of big, stable, income-producing companies - a high risk even when purchased with a view to longterm ownership. The risk needs to be mitigated with lots of diversity.

I would suggest learning about investment rather than trading. Branch out into trading later - if you really must - once you have learnt all about the market from a much safer approach.

seacaitch

Short term trading is a zero-sum game (actually, a negative-sum game once commissions and/or spreads are factored in). For you to win someone else must lose. To do this with consistency, you therefore need a sustainable edge over those other market participants whose money you're seeking to take.

If new to markets, there is every likelihood you'll seriously underestimate the competition you're up against, when the reality is that investment and trading attract many of the smartest minds in the world. Ultra-short term trading, in particular, is a technological arms race, in which newbie daytraders practicing 1940s era pattern-based technical analysis are like lambs to the slaughter.

What's your edge?

One of the best pieces of investment advice I've heard is to choose very carefully the "games" you decide to compete in. You can choose to play ultra competitive negative-sum games, which pitch you against highly sophisticated algorithmic trading software, or you can choose to play much slower positive-sum games where, for example, your investment horizon gives you advantages over others.

There's nothing like learning stuff for yourself though, so if you do decide to undertake intraday trading then do so with a very clear plan focused on risk management: apply it with rigid discipline, ensure you fully understand any leverage you're using and your total exposure. Allocate only a (small) portion of your capital to this education in trading, ensuring this is money you truly can afford to lose. If you have any gambling tendencies, or detect any developing within yourself while trading, then call a halt.

racing_blue

Price is what you pay

Value is what you get

racing_blue

That was Warren Buffet in his 2008 Berkshire Hathaway Chairmans Letter " Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down."

also:

"I call investing the greatest business in the world … because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! and nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it."

"The stock market is a no-called-strike game. You don't have to swing at everything — you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, "Swing, you bum!"