Stock trading for complete beginners

bulltraderpt

Grey,

I see no value in debating or discussion with you, there is an ignore button! Good bye.

bowlhead99

bulltraderpt wrote: »

Grey,

I see no value in debating or discussion with you, there is an ignore button! Good bye.

At post #23 you mentioned you would "leave it there" as it "does appear as I am a lone voice championing trading stocks for a living via day trading."

Now over 100 posts later in the thread, you seem to be coming round to the idea that perhaps you should indeed have left it there, because you are *still* a lone voice in championing giving up work to be a day trader for a living.

If debating or discussing an alternate viewpoint or perspective is not providing value to your life I guess you should just put the world on ignore and keep sailing forth on your own path. Seems to work for Donald Trump - just believe enough in your own hype, and build a wall to keep the dissenters out.

If it all goes horribly wrong and you're not successful, blame a scapegoat like "crooked Hilary" or "a change in the Algos which made me lose money" or "the fact that I can't know when news will come along that makes my predictions wrong". Rather than admit you were only in the winning 5% by luck.

bigfreddiel

This has to be one of the funniest threads there's been for quote a while.

The amount of time people have spent arguing the point from both sides is truelly astounding.

Basically if you think you can beat the market go for it and good luck.

If you think you can't and you don't have an 'edge' by a tracker

fj

coastline

bigfreddiel wrote: »

This has to be one of the funniest threads there's been for quote a while.

The amount of time people have spent arguing the point from both sides is truelly astounding.

Basically if you think you can beat the market go for it and good luck.

If you think you can't and you don't have an 'edge' by a tracker

fj

Well I'll have a go using a Stochastic system based on a daily chart and yes nothing works all the time otherwise we would all do it.
Here goes with a sell at 7040 on the FTSE 100 using the ETF ISF.L
We've broken through the overbought 80 on the indicator so thats a sell and we have 10 grand after the sale.
We'll only buy back if the blue breaks the yellow or we are below 20 and the blue curls up again.
So its £12 a deal and a reasonable 0.2% spread as is pretty common.

http://investing.thisismoney.co.uk/charts/?epic=UKX&compareTo1=&compareTo2=&period=MONTH3&type=2&indicator%5B%5D=SlowSTO&draw=

A 1 year chart and you can see at least 6 nice set ups for a buy below 20 and a sell above 80 on the indicator.In that period the FTSE 100 has gone from 6400 to 7000 which is around 10%.

http://investing.thisismoney.co.uk/charts/?epic=UKX&compareTo1=&compareTo2=&period=YEAR1&type=2&indicator%5B%5D=SlowSTO&draw=

taktikback

Makes me laugh...it's a bit like betting on which place you need to stand in a field not to be trampelled by a herd of stampeding cows...

Stochastics or no stochastics.. it's basically trying to use the past to predict the future, which has so many variable determinents..it's essentially random at the micro level...not quite so at the macro level...which is why investment over time is the only real predictable success strategy...

Don't get me wrong...I love gambling...and a good gambler can improve their odds...but there is a reason the house always wins in the long run...

A bookie once quipped...business is good...the punters think they're winning...we know we're winning...

grey_gym_sock

grey_gym_sock wrote: »

ok, take it as a challenge to you: produce an example where the costs from some kind of short-term trading are on average less than the return.

Sanctioned_Parts_List wrote: »

In [STRIKE]placing a bet[/STRIKE]making a trade, you've got the cost of the [STRIKE]bet[/STRIKE]position and the expected execution price as known values. The trader's variables are the size of the [STRIKE]bet[/STRIKE]position, the value the share needs to reach before he can take profit and the time period in which he wants all this to take place. If the trader believes he can win profitably, he makes the trade, if not, no trade. No?

completely logical, but that's the answer to a different question ...

you're saying that a trader can know the minimum price move required to make a trade profitable (after costs).

i wanted an example where the average result came to a profit (after costs). by average, i meant the expected outcome - "expected" in the mathematical sense: for each possible outcome, multiply the value of the outcome (a positive amount for a win, a negative amount for a loss) by the probability of that outcome; and add up all those figures to get the expected outcome. that total figure needs to be positive.

fairleads

taktikback wrote: »

Don't get me wrong...I love gambling...and a good gambler can improve their odds...but there is a reason the house always wins in the long run...

A bookie once quipped...business is good...the punters think they're winning...we know we're winning...

We all love a flutter but we can't compare gambling with frequent trading because the former is a zero sum game, whereas the latter isn't.

Sanctioned_Parts_List

grey_gym_sock wrote: »

completely logical, but that's the answer to a different question ...

you're saying that a trader can know the minimum price move required to make a trade profitable (after costs).

i wanted an example where the average result came to a profit (after costs). by average, i meant the expected outcome - "expected" in the mathematical sense: for each possible outcome, multiply the value of the outcome (a positive amount for a win, a negative amount for a loss) by the probability of that outcome; and add up all those figures to get the expected outcome. that total figure needs to be positive.

Ah, OK, I get your point now.

Suppose a trader is on a platform where share trades cost £5 per trade, and places a bet on a share worth 100p. He sells the share after a time, and that share price has increased by 1.5%. If he'd taken a £100 position, he'd have made £1.50 on the value of the share, offset against £10 costs, and so would've made a loss. A £1000 position would have won him £15, so he'd be £5 in profit. That was all I covered in my last post, and so far so obvious...

You're looking for how the trader calculates the probability of the market moving in his favour. Good luck with that as, so far as I understand it, the various graphs and patterns that TA relies on are not directly measuring probability, but representing the typical response of groups of humans to a given set of circumstances. The short-term trader isn't actually betting that the share will move in a particular direction at all - he's betting that everyone else will behave in a particular manner given the same input, and trusting everyone else to believe the same set of graphs and analyses.

It's not unlike everyone choosing to read tea leaves to predict the weather.

fairleads wrote: »

We all love a flutter but we can't compare gambling with frequent trading because the former is a zero sum game, whereas the latter isn't.

Only in the long term. For a day-trader, market wealth creation is sufficiently small that it's effectively zero sum.

fireblade28

bigfreddiel wrote: »

This has to be one of the funniest threads there's been for quote a while.

The amount of time people have spent arguing the point from both sides is truelly astounding.

Basically if you think you can beat the market go for it and good luck.

If you think you can't and you don't have an 'edge' by a tracker

fj

I don't think thats quite the story though.

I have never stated that you won't make money day trading. Of course you can. My argument is that you won't make more than from an index tracker over a long period.

If I make say 10% and you may say 15% but you had to spend an extra 2000 hours to make that extra 5%. What is the point?! For the everyday person who earns £15 an hour or so you have lost £30,000 minus tax.

Day trading only worth it if we are talking about accounts in millions which is how most funds and trusts work. Where a small edge due to the huge initial money makes you a fair amount. this is usually done by having inside information plus complex stochastic algorithms.

The stock market is a chaotic system and as a chaotic system anybody that tells you they can make predictions is wrong. Even trackers are a gamble to a smaller degree.

ColdIron

FrankToth wrote: »

I'd rather use demo account(s) ...

I'm going to call this spam, poster is pasting text into old threads