Do you always have a limit order going?

[samclem]

I'm waiting for someone to invent a way for me to "short" an investor of my choosing.

I don't believe I can pick stocks that will outperform the market in the future, or that I can even identify managers who will effectively do that. But I'm confident I can identify at least some investors who will do more poorly than the market as a whole, and I'd like a bit of that action.

[MRG]

I thought at a time I wanted to actively trade in retirement. Then I retired.

Even if I could almost consistently come close to beating an index, who cares? That's like a lot of w*rk! F that! I'm retired.

[Boho]

Quote:

Originally Posted by Boho I think I'm up an average of .45.5% on my whole portfolio. .37% on the brokerage account and .54% on the IRA.

It changed to -.26% and +1.11%. The -.26% is partially due to a fund in that account being bond and foreign stock heavy. The other fund in that account went up.

[Boho]

Quote:

Originally Posted by MRG I thought at a time I wanted to actively trade in retirement. Then I retired. Even if I could almost consistently come close to beating an index, who cares? That's like a lot of w*rk! F that I'm retired.

I totally get that. I have a total of zero stocks now, down from a high of one. I want to get on to other things as quickly as possible. I kind of talk like an active trader but I've mostly been doing research.

[Boho]

And now I'm at -.03 and +1.39. I wonder if the changes are from after hours trading.

I decided to try Active Trader Pro which gives "Real-time integrated balances, history, and positions with real-time tax lot detail." I wonder if the web app doesn't do that.

...I need 36 trades in a rolling 12 month period to use Active Trader Pro, which I don't have.

Oh, and the IRA has about 50% more money in it so the increase for both accounts takes some calculating...Duh I see the overall gain now. 1.05%.

[myself]

Quote:

Originally Posted by Boho In this video, starting at at 3:32, hear Burton Malkiel talking about it being possible to buy low and sell high. He doesn't consider this market timing. https://www.youtube.com/watch?v=vS2AYS1bYeI

Honestly I didn't watch the video, however that is exactly what I started doing about 3+ years ago. I set a buy order for specific stocks that I keep a close eye on for months in advance), and if/when I pick up the stock for the limit I set, I do one of 2 things: 1) set a sell order for x% above where I bought it - anywhere from 3% to 10%, or 2) sell covered call options using a limit order where I will pick up the premium along with a respective increase in stock pricing.

Keep in mind that stock options are even riskier than individual stock picking.

What is my best investment? Buying GOOGL @ 590 and using 3 different covered calls until the option was exercised @ 740 (total of 29% gain in literally 3 months in 2015), followed by a purchase at 680 and option exercise at 750, almost 1 year later. The worst was a loss on SDRL of 25%, although the position was considerably smaller than the GOOGL (drop from 33 down to 24.75 or so).

[myself]

Quote:

Originally Posted by Boho I totally get that. I have a total of zero stocks now, down from a high of one. I want to get on to other things as quickly as possible. I kind of talk like an active trader but I've mostly been doing research.

I'd suggest if you were considering actively trading, that you actually set up a portfolio and test out your thoughts for 6 months to 1 year. Literally create a fake portfolio on many of the websites like Google finance or Yahoo finance - and many others, and start with whatever amount you have now as cash in the account. Remember, it's not real money. Then buy/sell and record the transaction fees as you go - most of the brokers have lowered their transaction fees recently, I know for one Fidelity has lowered theirs down to $4.95/trade. If you are up well above the major indexes, then consider trying it with only a portion of your real investment account(s).

One thing I've noticed is that you have to get above $4k-$5k before actively trading to get decent returns, mostly because you can buy more shares. After all, if the transaction fee is say $6.95/trade, you have to double that because you'd be buying and then possibly selling, and divide by the number of shares you can buy. If you can afford to buy only 10 shares the stock has to go up by $1.39 just to break even after transaction fees. If you can buy 100 shares of the stock, then the stock only has to go up $0.14 in order to break even.

Good luck either way!

[Car-Guy]

Quote:

Originally Posted by MRG I thought at a time I wanted to actively trade in retirement. Then I retired. Even if I could almost consistently come close to beating an index, who cares? That's like a lot of w*rk! F that! I'm retired.

Interesting perspective (POV). I've traded for over 40 years but didn't get serious about "active trading" until I retired. Before retirement I probably traded two or there times a year. I just didn't feel like I had the time (or money for that matter). Now that I'm retired I find it a lot more interesting and fun. Now, with that said, I am trading with a bucket of money that I can afford to lose (but would not like that). I can watch the market, research the stock(s) and then buy and sell. Maybe since I'm not dependent on these returns I don't worry much about it or feel like it's work. Well over 50 trades so far this year.

I realize that many here would not call this investing but more like gambling. Probably true and maybe that's why I feel the thrill/interest.

[Fermion]

I am kind of with Car-guy. I do enjoy the thrill of trading and see value in the downs as well as the ups. It has done one amazing thing. I no longer have any desire to play slots or casino table games.

When you can gain or lose $2000 in a day in stocks, putting $0.25 in a slot machine to have a tiny chance at winning a progressive "jackpot" of $51 just isn't fun.

I now walk into a casino just to use the bathroom and eat at the cheap buffet on our RV trips.

[Dash man]

I only use limit orders for the day when buying or selling. I only sell for tax loss harvesting and buy when the company's stock fundamentals are sound, but some news or other cause for a swing in the price makes it look like a good time to buy. I set the limit a few cents below the market price at the time and I usually end up buying the stock on the next slight dip during the day. Sometimes it doesn't trigger the buy and I just look for the next opportunity. I typically buy dividend stocks for the long haul. We've already received over $5K this month, with much more to come.

[Boho]

Here's the kind of thing I do. I read about a promising gene therapy for sickle cell. It was announced days ago and the price of bluebird bio Inc (BLUE) already went way up (I don't mind an-hour-after-the-story up but not days-later up), which isn't bad if a cure actually happens but I don't rely on that, so I didn't buy. But studies are ongoing and future announcements could help the entire industry and investing in an industry fund is safer anyway. Health care changes are coming to the US, so I looked for an international or foriegn biotech fund and I found SBIO. That's high too, so I set an alert for when the price drops (trigger type: Price falls below $24.00, Note: Add cash to acct, set limit order to buy at 23). I set that limit based on this chart which seems predictable enough. I wouldn't wait for big biotech news to drive up the price before selling but that possibility is one reason I bought. I'd probably sell between $24 and $25.

[Car-Guy]

Quote:

Originally Posted by Fermion I am kind of with Car-guy. I do enjoy the thrill of trading and see value in the downs as well as the ups. It has done one amazing thing. I no longer have any desire to play slots or casino table games. When you can gain or lose $2000 in a day in stocks, putting $0.25 in a slot machine to have a tiny chance at winning a progressive "jackpot" of $51 just isn't fun. I now walk into a casino just to use the bathroom and eat at the cheap buffet on our RV trips.

It's funny you say that since it seems to be happening to me too. I still go to the casinos but not nearly as often as I had been going. I seem to be able to get my "fix" by playing the market. I don't have to leave home and sit in a smoky room full of obnoxious people and it's definitely been much more lucrative. There are tradeoff's however. I do miss the free drinks and honestly, I'd much rather watch the cocktail waitress (well some of them) rather than Stuart Varney.

[nash031]

Quote:

Originally Posted by Boho Here's the kind of thing I do. I read about a promising gene therapy for sickle cell. It was announced days ago and the price of bluebird bio Inc (BLUE) already went way up (I don't mind an-hour-after-the-story up but not days-later up), which isn't bad if a cure actually happens but I don't rely on that, so I didn't buy. But studies are ongoing and future announcements could help the entire industry and investing in an industry fund is safer anyway. Health care changes are coming to the US, so I looked for an international or foriegn biotech fund and I found SBIO. That's high too, so I set an alert for when the price drops (trigger type: Price falls below $24.00, Note: Add cash to acct, set limit order to buy at 23). I set that limit based on this chart which seems predictable enough. I wouldn't wait for big biotech news to drive up the price before selling but that possibility is one reason I bought. I'd probably sell between $24 and $25.

At the core you are speculating. Sure, you mask it well by putting out technical analysis, but there's no real investing homework behind it. You're not looking at the business behind it; you're merely hoping to hit big on some idea. I've been there. Fortunately, I only lost $3700 on $4000 on two small investments in businesses I was sure were bound to take off based on single big ideas without knowing anything about the fundamentals behind the businesses themselves. A relatively inexpensive lesson.

You'll win some. You'll lose more. There's little about anything I've read in your strategies that leads me to believe you'll be a consistently good "stock picker", because if you look at those who've gone on to great, sustained investing success by picking stocks, they look at core fundamentals and buy with the intention of holding. What you're doing is something millions have done before. A few have gotten lucky, the vast majority do not and end up right where they started or worse after exhausting several years' worth of energy.

I'm reminded of the story a friend of mine told me back in 2005. We were co-workers; he joined the Navy a few years after I did. He told me stories of living on a boat in Mexico for a year after great success as a day trader in 1998-2000. He'd made a fortune of nearly $150 million.

But he kept going, and eventually lost all of it. Literally, every cent. He started over by going to Officer Candidate School, re-married, etc.

What struck me about his story was not his overwhelming success followed by the fall, it was his attitude about it. When I asked him if he thought day-trading and technical market analysis was smart, he said, "How many people do you know that made $150 million in less than two years?"

I said, "The same number of people who I know who lost $150 million in six months."

That pretty much ended the conversation.

You're going to be biased to focus on your wins and rationalize away your losses. In the end, you're going to be better off if you'd become a value investor (if you must buy individual stocks) or indexer. You're walking a path millions have walked before you, and only a few have succeeded, often just for the short run.

As ERD said, this is likely falling on deaf ears. Good luck!

[Boho]

Quote:

Originally Posted by nash031 You're not looking at the business behind it...if you look at those who've gone on to great, sustained investing success by picking stocks, they look at core fundamentals and buy with the intention of holding.

The business behind it is biotech. I'd prefer that it was specifically genetic engineering but I couldn't find a fund specifically on that and I'd have to resort to individual stocks. Genetic engineering is the future and to a smaller extent the present and I don't think anyone disagrees with that. This is the kind of fund that should work long term, but I feel it's probably represented decently enough in my index funds and other funds I have, so I bought it based on the extra little push it may get from recent developing news.

And I've found that graph to be unusually consistent and predictable. I eventually want to see if I could set search parameters to find that kind of even volatility that lasts mid to long term.

[NanoSour]

I bought into this trap for many years in my younger days. My investing life is so much better with the lazy 3-fund portfolio. I just have better things to worry about.

[easysurfer]

Quote:

Originally Posted by myself I'd suggest if you were considering actively trading, that you actually set up a portfolio and test out your thoughts for 6 months to 1 year. Literally create a fake portfolio on many of the websites like Google finance or Yahoo finance - and many others, and start with whatever amount you have now as cash in the account. Remember, it's not real money. Then buy/sell and record the transaction fees as you go - most of the brokers have lowered their transaction fees recently, I know for one Fidelity has lowered theirs down to $4.95/trade. If you are up well above the major indexes, then consider trying it with only a portion of your real investment account(s). One thing I've noticed is that you have to get above $4k-$5k before actively trading to get decent returns, mostly because you can buy more shares. After all, if the transaction fee is say $6.95/trade, you have to double that because you'd be buying and then possibly selling, and divide by the number of shares you can buy. If you can afford to buy only 10 shares the stock has to go up by $1.39 just to break even after transaction fees. If you can buy 100 shares of the stock, then the stock only has to go up $0.14 in order to break even. Good luck either way!

+1 about the setting up a test portfolio and give that a trial run to see if the system works.

Somehow though, my bet is that Boho won't do that as my vibe is he's more for the "thrill of the trade and timing" than actually applying a system and recording the results.

[samclem]

Quote:

Originally Posted by Boho Genetic engineering is the future and to a smaller extent the present and I don't think anyone disagrees with that.

- If "everyone agrees" that a certain thing is the hot ticket, then don't you think the price has already been bid up by "everyone" to reflect that? The "sureness" of the "sure thing" is already baked into the price. And then when you add in the "pilers on" who go where they see others going, you can see why the price may be >more< than high enough already.

[Fermion]

In micro cap bio there is always the chance you can get that "one and done" stock.

It happened very recently with Pharmacyclics, a micro biotech that was on the ropes and down to a $2 share price. They then had a major breakthrough and a short while later sold out to AbbVie for $261 a share.

So you have $20,000 of this stock, you wake up the next morning and your account says $2,610,000.

You then have a heart attack and never get to ER.

[Boho]

Quote:

Originally Posted by samclem - If "everyone agrees" that a certain thing is the hot ticket, then don't you think the price has already been bid up by "everyone" to reflect that? The "sureness" of the "sure thing" is already baked into the price. And then when you add in the "pilers on" who go where they see others going, you can see why the price may be >more< than high enough already.

I don't believe the market is...what's the word...totally efficient or something. I believe there's a window of a couple of hours or more to take advantage of news affecting a stock (I saw a study on this). I do believe the price gets "more than high enough" on news like this, then it drops. BLUE already dropped from the spike. It probably has more dropping to do but I like to get in on things earlier than this.

I believe there's a long term window of opportunity too. Recent news indicates that the ultimate jump in prices due to a drug passing all trials is somewhat closer and biotech stocks will rise beyond what they are now even though people expect it.

[nash031]

Quote:

Originally Posted by Boho The business behind it is biotech. I'd prefer that it was specifically genetic engineering but I couldn't find a fund specifically on that and I'd have to resort to individual stocks. Genetic engineering is the future and to a smaller extent the present and I don't think anyone disagrees with that. This is the kind of fund that should work long term, but I feel it's probably represented decently enough in my index funds and other funds I have, so I bought it based on the extra little push it may get from recent developing news. And I've found that graph to be unusually consistent and predictable. I eventually want to see if I could set search parameters to find that kind of even volatility that lasts mid to long term.

Not the sector. The business. What is their financial situation? Are they heavily leveraged? Do they have more than one iron in the fire? How do they make money? How do they spend money? Where do they stand in their sector? Are they well positioned if their primary bet doesn't pay off? Can they absorb losses? For how long?

You're not looking at the business behind your bets, and I think you're going to get burned in a big way. It's pure speculation.