Any stock traders here?

Starkler (Geoff) · #1 09-12-2008, 04:30 PM

At the moment Im income poor ( no job ) but have some $$ sitting around not doing a whole lot except earning a little bit of interest.

So.... I thought I would try my hand at stock market trading

Not for the faint of heart Im sure, and as Im learning im also learning thats its dangerous to not have a plan and to react emotionally to whats happening.

I've dipped my toe into the water buying with a smallish amount of $ at the end of last week.

Ive had a small win with BHP buying @ 26.1 on Friday (great price I picked the bottom pretty well) and selling at 26.96 at yesterdays opening ( I should have held longer and profit taken today if I had bothered to check that commodity prices had risen

)

A small loss with Wesfarmers (17.2 vs 17.16). First purchase and a stupid one at that based on zero research. I managed to escape with a small loss instead of a more significant one.

Today I bought some CBA off the back of todays profit taking on the banks, but they steadily dropped during the day so Im a little behind at this time, but still I bought at a price below the recent averages but I wasnt aware of a reduced profit forecast at the time. Im confident they should bounce back soon.

Also bought some Woolies stock at 26.10 and theyre up right now. I just missed a price spike near end of day when I could have made a tidy profit except my commsec browser session had timed out and I had to login 3 times and missed it

My strategy at the moment is to deal in solid blue chip companies only buying at the bottom of the 5 day cycle, and hoping to sell after a bounce. Reasoning being If I dont make any truley tragic mistakes, its just a matter of time before I can recover.

Its lots of

with some

and hopefully some

and

too.

erick (Eric) · #2 09-12-2008, 04:35 PM

Let me know when the "firesale" of the SDM is imminent

erick (Eric) · #3 09-12-2008, 04:40 PM

Don't think I could cope with the excitement of day trading! So sorry I cannot help you there, Geoff.

But, to hijack your thread, I am thinking of moving one batch of superannuation from "balanced" to "growth", perhaps even "100% growth" (solely in Oz and International shares and property). I understand Warren Buffet has just placed a multi-billion dollar "bet" that the stock market will be well above the current in 8-10 years time. I'm of that thinking and would like a piece of that action!

Ian Robinson · #4 09-12-2008, 05:04 PM

I've held shares (BHP and ONESTEEL) , but sold them all prior to Onesteel closing the Newcastle Steelworks - all these came via an employee share plan - great while you are working for them , they eventually would have in theory paid themselves off via the dividends , but if I had kept them I would have to pay out the Share Plan Debt , too big a dent in my super and separation package which was not huge. So I offloaded them all and pocketed any surplus once the debt was payed. Paid for my double garage.

Not bothered with share trading since. Too dambed risky for my liking and I've not got a lot of surplus $ laying about that I can afford to loose. More people go down the tubes share trading than every get rich from a small starting point- in shares - you need money (and lots of it) to make good money out of it.

You've gotta be in it for the long haul (hold for several years) hopefully the ups will be more than the downs.

I never bothered taking TELSTRA SHARES - glad I didn't.

And when NRMA gave me shares - I sold them immediately.

glenc (Glen) · #5 09-12-2008, 05:05 PM

I tend to buy and hold for at least a year, and look for good dividends.
This data comes out every Friday night: http://www.afrsmartinvestor.com.au/tables.aspx
Over 1700 stocks listed alphabetically. I look at increase in $1000 over 1 year and 3 years, dividend yield, franking, PE ratio, debt etc

PCH (Paul) · #6 09-12-2008, 05:07 PM

Hi Guys,

Erick, you're right, - I know for sure that he plunged US$6b into Goldman Sachs at $137 per share a couple of months ago. For that he gets certain rights above and beyond regular smaller holders like us. However, they touched on $46 just the other day, so he could have got a better deal if he'd waited a bit longer. But who'd be the one to say he's not doing it right? Not me, for sure

Geoff, I've been doing this for years, and have had the ups as well the (many) downs, - although overall I'm ok at it. But I commented to my wife just the other day about how many times I can remember things going pear-shaped big time... and how I hardly ever recall things going up so much that I got all girly with excitement. I also do the Forex stuff as of recently and that's going pretty well actually, although some members of the forum would possibly have me thrown off the cliff for this shameless barbaric practice

I'd really advise you to use small amounts of money at first Geoff -
about $2k (assuming of course that you agree that $2k is smallish), and to have a plan. Not sure about the 5 day cycle you mention. I'd recommend a charting package of which there are many on the market, as most traders follow what's called technical analysis for shortish term trading. Also advise you to take a short course on how to do it, and more importantly how to not lose all your money or your sanity whilst 'doing it'.

All the best with the picks

Miaplacidus (Brian) · #7 09-12-2008, 05:08 PM

Good luck, Geoff.

(I'll take the Vixen.)

Cheers,

Brian.

Kal (Andrew) · #8 09-12-2008, 05:13 PM

I think that if you want to get into stocks then now is a great time to buy. The ASX is only 53% of what it was 1 year ago to date, and it won't be a bear market forever. Bear markets last alot less than bull markets, so if you take a view of buying stocks with intent to sell in the timeframe of years (not days) then it is difficult to see a losing situation unless the shares that you buy are in a company that will go bankrupt in the the current financial crisis.

dannat (Daniel) · #9 09-12-2008, 05:14 PM

geoff - at the moment i would only be buying scrip from companies that pay a dividend of about 4% or above and have little or no debt.
At present the market is still in a bearish trend overall - but i think will experience a bear market run to about 400 points, maybe slightly higher. Howeverv once it reacher this point i think the fnal fire sale may begin...the market could drop a lot further.

If buyng i would be buying just small amounts - i think leaving it in cash is sensible now - I would hold off for 18 months or so - i expect the market to lose 10% next year - atleast in cash your capital will be protected.

insert disclaimer here

One other thing i would recommend is tat you understand how the company makes money, good luck

erick (Eric) · #10 09-12-2008, 05:48 PM

Quote:

Originally Posted by PCH

Hi Guys,

Erick, you're right, - I know for sure that he plunged US$6b into Goldman Sachs at $137 per share a couple of months ago. For that he gets certain rights above and beyond regular smaller holders like us. However, they touched on $46 just the other day, so he could have got a better deal if he'd waited a bit longer. But who'd be the one to say he's not doing it right? Not me, for sure

Beyond that, I understood that he has taken multi billions in derivatives on the share market being substantially higher in the 10 year time horizon. Just the right horizon for this batch of super.

wavelandscott (Scott) · #11 09-12-2008, 06:06 PM

While I am not an expert, I do have some experience in stock trading...my advice for what it is worth...

Have a limit - don't get too greedy or reckless

Have a plan (industry stock type) - trade in something that you know and understand...if you don't understand how the company works...stay out of it!

"Systems" are for suckers - just like at the casino, strip out emotion...it is not a game. There are a lot of other folks trying to do the same thing you are...except they have better and faster tools don't get too caught up in the momentum.

Although they should, markets do not always operate logically...the events of the last several months demonstrate this.

Invest for the long term...Warren B. is not worried about the next 6 months or even 5 years...he is playing on the 10 year plus time period...

Day trading is not for the faint of heart...good luck to you I hope that it all works out well for you...but just in case, I am certain that I would interested in your SDM if it comes to that...

Cheers,

Starkler (Geoff) · #12 09-12-2008, 11:38 PM

Quote:

Originally Posted by wavelandscott

Have a limit - don't get too greedy or reckless

Have a plan (industry stock type) - trade in something that you know and understand...if you don't understand how the company works...stay out of it!

Yep Im really only hoping to play the current volatility cycles with top companies that I know, and am working with a watchlist of selected companies. Penny stocks are a no-no for me.

Quote:

"Systems" are for suckers - just like at the casino, strip out emotion...it is not a game. There are a lot of other folks trying to do the same thing you are...except they have better and faster tools don't get too caught up in the momentum.

I have reading up a lot and have learned the basics of technical charts, candlesticks and trends. I have been closely watching the markets for about a week now and every day is teaching me something new.

Im going to be recording on paper what I did right, what I did wrong, the reasoning behind every action, the differences between my expectations and the actual, and find the reasons behind the happenings.

Im using CommSec, and the free access option doesnt give you live graphs, you have to keep refreshing and manually bring up the charts. I found a great bit of free software called quotetracker which auto refreshes the market info and charting as recent as the last refresh.

Quote:

Although they should, markets do not always operate logically...the events of the last several months demonstrate this.

I read a quote of wisdom from a well known US trader who said "the markets can remain irrational for longer than you can remain solvent".

That was the lesson from the dotcom crash where traders who thought they knew the bubble was about to burst had kept betted on it happening as the bubble kept growing and they blew it. The lesson is risk management and not throwing good money after bad chasing a losing position.

I know it sounds like famous last words, but we have hit a new bottom last week, and with the gloomy economic forecasts out of the way and governments around the world throwing money into stimulus packages, I wouldn't expect any major plunges from here until into the new year.

Until then i'll play the ups and downs of the All Ords with quality companies.

Most of my money is currently safe in term deposits at good interest (compared to what you can get now) and when the bottom comes, I'll go into a portfolio of managed funds and let the pros do it for me.

*Tip - If you can select your own funds, theres no need to be paying 4-5% off the top in commissions to advisor services. A number of services such as CommSec or Fairfax will refund you the entry commissions.

Quote:

Day trading is not for the faint of heart...good luck to you I hope that it all works out well for you...but just in case, I am certain that I would interested in your SDM if it comes to that...

Thanks for the tips and kind wishes, but theres no way the SDM is going in a fire sale

*Disclaimer: Im not advising anyone to do what I'm doing

gts055 (Mark) · #13 10-12-2008, 01:35 AM

Geoff, the "pros" know buckleys about tomorrow, they r great at history though, and have a knack for extracting cash from "investors" to feed their own pockets with fees. The markets are at the bottom, bouncing along for maybe another year. Its great buying over this period, buy companies with low debt, dividends r nice, capital gains r nice. Day trading is not far removed from gambling. Market manipulation is rife and the ASIC a toothless disinterested tiger. Buying for long term is safer. This sage free advice is worth a pinch of .... Have fun. Mark [ the 180AP one

]

xelasnave · #14 10-12-2008, 09:42 AM

Sell when you make 5% profit or 3% loss maybe?
1% per day profit is 365% per year.
It is about numbers not about love dont believe in what you buy.
I dont like the market and horse racing is little different in the luck required.
It is not investing it is gambling.
You gamble on a rise in prise of the shares quiet apart from the fact that if the company does make money that the directors wont channel it off.
Good luck
alex

erick (Eric) · #15 10-12-2008, 11:19 AM

One thing I thought I heard about online trading is that when the rush is on, you may not be able to get on to complete your buy/sell and can only watch prices in dismay? Didn't then happen in the last stampede? Can that be a problem with an online trading strategy?

Miaplacidus (Brian) · #16 10-12-2008, 12:06 PM

Quote:

Originally Posted by Starkler

I read a quote of wisdom from a well known US trader who said "the markets can remain irrational for longer than you can remain solvent".

Er., that was J.M Keynes, I believe. Not a trader, but actually a very successful investor (inter alia, of course). He made his money by not following the herd.

mrsnipey · #17 10-12-2008, 12:07 PM

Geoff, I used to work for a massive investment bank in London for a couple of years doing technical analysis (and charting) and the one thing we found after analysing 20 years of data was that 'there is no trend'.
Just when you think you've worked one out, the market does the exact opposite to what it's 'supposed' to do.

Give it a go, but baby steps first.
Good luck.

Starkler (Geoff) · #18 10-12-2008, 12:25 PM

Quote:

Originally Posted by erick

One thing I thought I heard about online trading is that when the rush is on, you may not be able to get on to complete your buy/sell and can only watch prices in dismay? Didn't then happen in the last stampede? Can that be a problem with an online trading strategy?

With commsec you can place a fixed price buy or sell order into the system at any time and its valid for the day only, or 20 days, your choice.
You can fix a price or you can buy/sell "At market" which means it should trade immediately at whatever the current bid/ask price is.

What i dont think you can do is set a trailing sell

Quote:

Originally Posted by xelasnave

It is not investing it is gambling.

For sure playing the ups and downs can be considered gambling, but there are risk management strategies that can be employed. I wont pretend that I know much about that yet.

Quote:

Originally Posted by mrsnipey

'there is no trend'.
Just when you think you've worked one out, the market does the exact opposite to what it's 'supposed' to do.

Tell me about it.
Monday: The All Ords shoots up after gains on Wall st on Friday.
Tuesday: AO drops even though Wall St climbed again in the last session.
Today: AO rising even though Wall St dropped wiping out the last two sessions gains.

Huh?

wavelandscott (Scott) · #19 10-12-2008, 01:20 PM

Sounds like you have the right mindset, discipline and a plan...I wish you the best of luck in execution of your strategies.

With respect to your SDM, I was more thinking along the lines that after you made a squillion $ trading and wanted to upgrad to an even more glorious scope that you would simly be looking for someone to get rid of that "old SDM" scope...

glenc (Glen) · #20 10-12-2008, 05:55 PM

This page is handy: http://markets.smh.com.au/apps/mkt/index.ac