Stock trading for complete beginners

marvin

HouseBuyer77 wrote: »

Someone particular clever, with a good knowledge of statistics, may be able to make a decent profit of gambling on sports. This doesn't mean it isn't gambling.

So it is with the stock market.

Tony Bloom and Starlizard is a very good example the man is a billionaire from betting on sports.

All share dealing/trading is gambling but you can narrow the odds by doing some research, or you can stick a pin in a list and see what comes of that approach.

bulltraderpt

EdGasket wrote: »

If you think it is anything else you are deluding yourself and getting confused by various 'analysis' and data weighting. Don't you think all the investment houses have much more resources to throw at this than an individual? If you come out on top day trading you are just plain lucky for now.

The reason why it is gambling is because price movements are completely random short-term. It is only long-term investment that is likely to produce overall positive returns and hence anything else IS gambling.

Actually I KNOW it's not gambling. Although you haven't attempted to dissect the rest of my original post, I'll try and answer yours, politely.

Investment houses and funds for that matter, have funds so large that for them to employ large amounts of capital for a half a percent here or one percent there probably wouldn't be 'worth' the risk.

If you research various trading techniques and strategies day traders can and do make money daily as long as they understand the risks and ensure they can consistently think with a probabilistic mind set.

Fortunately most joe public don't have the patience or the risk temperament to engage in such activity. Why? I'd put it down to risk aversion in our up bringing.

Plenty of great books and authors out there who go in to this style of trading in much greater depth than I can.

You say that price movement's are completely random in the 'short term' but that cannot be true when you view the market wizard series of books where these interviewees make incredible returns via trading, some only from day trading.

bulltraderpt

HouseBuyer77 wrote: »

Someone particular clever, with a good knowledge of statistics, may be able to make a decent profit of gambling on sports. This doesn't mean it isn't gambling.

So it is with the stock market.

A retail trader with knowledge and understanding can beat the market.

In fact the retail day trader's edge is his size as his pot is going to be considerably smaller than professional houses so he can profit from opportunities as they appear throughout the day.

Many people appear to confuse gambling with trading. For me it isn't, both do require research and an understanding of the risks associated with trades entered and closed in a day.

In sport you win and lose it's all or nothing, in day trading you win by taking smaller losses but bigger wins overall.

bowlhead99

bulltraderpt wrote: »

You say that price movement's are completely random in the 'short term' but that cannot be true when you view the market wizard series of books where these interviewees make incredible returns via trading, some only from day trading.

Did the market wizard series of books also interview all the people that made only normal returns, merely broke-even, or made incredible losses from trading?

You can make any random outcome appear non-random by selecting all your sample from that subset of people who are willing to comment on their experience and whose experience you are willing to publish.

EdGasket

bulltraderpt - fact is that 95% of spread-bet accounts make a loss and the remainder that don't are either in the statistical 'tail' that means on average a few people will make a profit or they have inside information. This was straight from the horses mouth; IG Index interviewed on radio 4. Spread-bets by nature are short-term trading bets.

Malthusian

marvin wrote: »

Tony Bloom and Starlizard is a very good example the man is a billionaire from betting on sports.

Tony Bloom is a billionaire because he had the sense to cash in before his luck ran out and now makes money as a tipster. (Sorry, a "betting consultancy".) In other words he doesn't make money from betting anymore, he makes money from other mugs who bet.

You see this pattern often. Bloom is chairman of Brighton & Hove Albion FC - another chairman of a Championship football club, the guy who owns Brentford FC, is exactly the same. Cashed in his chips and set himself up as a bookmaker before the music stopped.

Millions of people will gamble on the stockmarket today. Or on poker or on which cockroach will reach the end of a box first. Tomorrow half of them will have made money. The day after a quarter of them will have made money, a quarter will be nursing losses and half will be almost even but not quite having paid the house's margin. In a year's time a tiny fraction of them will have had more good days than bad and made a fortune. The rest will have either packed it in, or lost their shirt. But it's that tiny number that buys second division football clubs, gets interviewed for magazines and books and gets held up as an example of how anyone can do it.

EdGasket

bulltraderrpt - are you making money from day trading?

bulltraderpt

bowlhead99 wrote: »

Did the market wizard series of books also interview all the people that made only normal returns, merely broke-even, or made incredible losses from trading?

You can make any random outcome appear non-random by selecting all your sample from that subset of people who are willing to comment on their experience and whose experience you are willing to publish.

Obviously they are interviewing winners, not losers! The whole premise of the series is to show it can be done, with the right techniques and mind set.

Edit: Although it should be noted, several market wizards blew their accounts numerous times before they 'got it', i.e the markets. So in that series of books, it shows that it can be done.

bulltraderpt

EdGasket wrote: »

bulltraderpt - fact is that 95% of spread-bet accounts make a loss and the remainder that don't are either in the statistical 'tail' that means on average a few people will make a profit or they have inside information. This was straight from the horses mouth; IG Index interviewed on radio 4. Spread-bets by nature are short-term trading bets.

OK so we've gone from it's gambling to be grudgingly acknowledging that 5% of people do make money from short term trading, or at least 5% of IG's clients do.

I never said it was easy, fortunately most people don't put in the time, effort, or have the passion or the mental fortitude to embark on such a style of trading.

It's difficult, there is a learning curve, as with anything, but it can be done.

bulltraderpt

EdGasket wrote: »

bulltraderrpt - are you making money from day trading?

Yes I am, four years in to the journey, and I have no inside information, but I do subscribe to a full on real time information provider, with level II and charts.

As someone once said about the markets; "Many are called few are chosen."

I hope it will always be me.