Active Stock Trading

[Semiretired2008]

Are there active traders among this group.

I have thought about starting some discussions along this subject (methods utilized, styles, etc), but if there is no one else doing it then I would rather not go there - also it just may be a bad subject and do not really want to start a bad subject.

I do not want to discuss particular stocks (I have never suggested particular stocks, but have used them in explanations with caveats attached because of finger pointing that can come up later) - just considering discussing styles and methods utilized, considerations when watching the market, etc...

I trade one or two days a week depending upon what the market is doing - sometimes I hold them for an hour and other times for a few months - so not really day trading just buying when I feel they are down and selling when the up is finished...

 

[pb4uski]

Not me. I decided long ago that it takes much more time than I want to spend to properly research individual stocks to decide which tickers to invest in. And even with the proper research, it is hard to pick winners vs losers as can be seen in that many pros lag the relevant indices even after adjusting for expenses.

I have better things to do with my time.

That said, I did have a friend once who actively traded - it was his "hobby". One year he made more than he earned from working, another year he lost more than he made from working. He eventually quit and now authors an investment newsletter. Good for him.

 

[grumpy]

I am an active trader in the sense that I frequently buy and sell the same stocks that make up my high dividend portfolio. I hold about 25 stocks long term. I use a brokerage where I pay a flat fee of $15 per month for unlimited market trades during any of three trading windows per day. I have held most of these stocks for many years and so I have a pretty good feel for the range they typically trade in. By watching their prices I sell (in small increments - e.g. 20 shares at a time) when the price approaches the top of the range. I will usually find another one of my stocks near the bottom of its range and so I apply the cash to that one or just hold the cash until one of the stocks drops to an attractive price.

This is more of a hobby than anything else. I only hold approx. $10,000 in any one company's shares and this portfolio represents only 15% of my total investments.

 

[Lakedog]

I actively trade a bit with about 5% of my portfolio. For the last few years, I have focused on the same 2-3 stocks which are also part of my long term holdings. I might hold them for a couple of days or a couple of months, but this method has worked very well for me over the years. This might be considered more of a hobby (but a profitable one).

 

[Semiretired2008]

I actively trade a bit with about 5% of my portfolio. For the last few years, I have focused on the same 2-3 stocks which are also part of my long term holdings. I might hold them for a couple of days or a couple of months, but this method has worked very well for me over the years. This might be considered more of a hobby (but a profitable one).

I am an active trader in the sense that I frequently buy and sell the same stocks that make up my high dividend portfolio. I hold about 25 stocks long term. I use a brokerage where I pay a flat fee of $15 per month for unlimited market trades during any of three trading windows per day. I have held most of these stocks for many years and so I have a pretty good feel for the range they typically trade in. By watching their prices I sell (in small increments - e.g. 20 shares at a time) when the price approaches the top of the range. I will usually find another one of my stocks near the bottom of its range and so I apply the cash to that one or just hold the cash until one of the stocks drops to an attractive price.

This is more of a hobby than anything else. I only hold approx. $10,000 in any one company's shares and this portfolio represents only 15% of my total investments.

That is about the same as me. I have some I hold long for dividends and such and trade them actively as the market is up and down. I have others on my list just because they have steady patterns. I have about 50 altogether that I watch and that list gets updated about once a month - sometimes less... (takes me about 2 -3 hours to find candidates). Out of the 50 I have 12 of them for dividend payments.

I use FIDO, NASDAQ and FINVIZ data (prebuilt downloads) to make up my list and to watch / build patterns from. When I find ones with fairly regular patterns they get added to my list. Now, while I have 50 on my list - on a given day I am only watching 20 or 25 of them.

Normally within the first hour or so I have either made my selections and then I only watch them or I have turned off the computer. If I have not made a selection by 11am then I turn it off.

If I turned off my computer then it depends upon what happens between that time and and 2pm to determine if I go back and watch in the afternoon (usually for the last 1.5 - 2 hours)... If I get busy with something good then I normally do not bother going back...

I average 3 or 5 hours a week (8 - 10 hours max) on the computer trading, a few more hours once a month making my list and setting up selections, and a few hours while watching TV analyzing patterns on and off.

I probably spend more time on boards like this than I do trading... It gives me pocket change for my hobbies and helps keep my mind sharp. I actually talked with the FIDO guys and helped them with suggestions / changes to their trading software a couple of times...

 

[CarlK]

That is about the same as me. I have some I hold long for dividends and such and trade them actively as the market is up and down. I have others on my list just because they have steady patterns. I have about 50 altogether that I watch and that list gets updated about once a month - sometimes less... (takes me about 2 -3 hours to find candidates). Out of the 50 I have 12 of them for dividend payments.

I average 3 or 5 hours a week (8 - 10 hours max) on the computer trading, a few more hours once a month making my list and setting up selections, and a few hours while watching TV analyzing patterns on and off.

...

Me too. But I focus on the Canadian market and spend about an hour or two per day.

 

[pperl]

Well I am a regular trader, having done it since 1993 on a regular basis. I prefer being a value trader though sometimes I buy and sell rather quickly. I utilize both fundamental data and technical analysis and have been a subscriber to Worden which provides stock charts and tools as well as Stockcharts.com. I basically believe in what Donald Coxe tends to stress: commodities. My portfolios are focused on Agriculture, Energy, and Mining with a few in computer technology, banking, and miscellaneous categories. I use DTLink's Personal Stock Monitor Gold to view and manage my accounts as I prefer the spread sheet of data that it imports via Yahoo or other services. It is also very handy for dealing with gains and loss reports at year end for taxes. Today I am looking at EEP, IRS, GSS, ECT, TESO, and STO to see if they make sense to buy. I also would like to buy AGCO and TITAN when their prices to where I think they make sense.

all my best,
/* Philip */

 

[Semiretired2008]

You started before me. I think my first trade was in 99 or 2000. I am actually surprised that this forum does not have more active traders. I would think in ER that active trading would be a way of life - even if only once or twice a week, but still somewhat active.

Myself, mostly I use what Fidelity offers plus Stockcharts .com, FINVIZ, NASDAQ .com and even Yahoo some. Have not found a pay for info service that provides better info except for the really expensive ones and I do not trade enough to go there...

 

[REWahoo]

You started before me. I think my first trade was in 99 or 2000. I am actually surprised that this forum does not have more active traders. I would think in ER that active trading would be a way of life - even if only once or twice a week, but still somewhat active.

Perhaps that says something about the long-term success of 'active traders' compared to those who chose the asset allocation 'tortoise' strategy? Or more likely, those who trade actively aren't the personality type to seek early retirement.

 

[MichaelB]

Perhaps that says something about the long-term success of 'active traders' compared to those who chose the asset allocation 'tortoise' strategy? Or more likely, those who trade actively aren't the personality type to seek early retirement.

+1

Either that or the active traders are still waiting for enough success to brag about.

 

[utrecht]

Or maybe the active traders quickly get told that they cant be successful by most of the forum, so they just stop talking about it and keep there success to themselves.

 

[REWahoo]

Or maybe the active traders quickly get told that they cant be successful so they just stop talking about it.

You might have something there...

 

[target2019]

Are there active traders among this group.

I have thought about starting some discussions along this subject (methods utilized, styles, etc), but if there is no one else doing it then I would rather not go there - also it just may be a bad subject and do not really want to start a bad subject.

I do not want to discuss particular stocks (I have never suggested particular stocks, but have used them in explanations with caveats attached because of finger pointing that can come up later) - just considering discussing styles and methods utilized, considerations when watching the market, etc...

I trade one or two days a week depending upon what the market is doing - sometimes I hold them for an hour and other times for a few months - so not really day trading just buying when I feel they are down and selling when the up is finished...

I would read a thread you started, and might contribute. Not a trader, but I am interested in learning more about all things investing.

You might find more open discussion at the Morningstar forums about stock trading, styles, and so on.

 

[Semiretired2008]

Perhaps that says something about the long-term success of 'active traders' compared to those who chose the asset allocation 'tortoise' strategy? Or more likely, those who trade actively aren't the personality type to seek early retirement.

+1

Either that or the active traders are still waiting for enough success to brag about.

Or maybe the active traders quickly get told that they cant be successful by most of the forum, so they just stop talking about it and keep there success to themselves.

I would think that a bunch of INTJ's would all be active traders. It kind of fits the personality type (IMO)...

I hear all the time about the winners that do not tell about their losses. But isn't that why the 14" Bass comes in at 9lbs by the time you get home. It is human nature to tell the good side of things and avoid the bad.

I probably hold to much in my stock portfolio, but I have it divided into 3 sections.

1. My dividend payers that get sold only if it becomes necessary or it they reach my sell point. I have upper and lower level sell points - I also sell if there are changes coming about that I do not want to be involved in... For example: I owned some NSM (National Semiconductor) last year. TXN (Texas Instruments) bought them out. The stock jumped to $25 - I sold it. Did not want TXN stock... Got bitten by a few buyout scenarios so I avoid them now. This is about 25% of my portfolio. I try to only buy stocks that also have growth or recovery potential in this area.

2. My long shots if they die or make the come backs that are hoped for (this is my high risk area and I have learned a lot of hard lessons trying some of these and now hold a very very very small amount of my portfolio in these). <5% of my portfolio. Once the ones that are in this area now are gone - this will probably be avoided in the future. Risk factor is to high with the bankruptcy risks and other factors involved...

3. My active traders. It is actually my greatest overall return area and constitutes about 20% of my portfolio. I have a loss threshold here - in other words if I ever start to lose more than I am making or other investing methods can or are outpacing this area then I will abandon active stock trading and just use passive investing, but for now I am sticking with it...

I also have some of my portfolio in bond indexes and other funds (some would be consider stock funds). I would say that I am about 70% into stocks... I have been higher than that and lower than that depending upon the market.

I believe that most losses in active trading come from greed and or fear. If you keep a level head, stick to your rules (mine are very strict) and do not try to chase the market you can succeed.

This is the most common reason or excuse for failure that I have heard - But, it was doing so good - I had to buy some... (you are already late)...

 

[Semiretired2008]

You might find more open discussion at the Morningstar forums about stock trading, styles, and so on.

I have tried forums like Morningstar and such, but have had little success. They mainly concentrate on normal trading standards - what you do when a stock crosses it's 200DMA or such. Not much care for free thinking discussions.

I was a member of a small group for several years, but the owner of the group had to close it down due to illness and no one else was willing to take it over. I couldn't because I was the token poor guy compared to them. They only allowed me to join because I was friends with the owner and they picked my brain for the free thinking analytical stuff. Most were fund managers and such and talked way above my head. It was not a forum like this. Totally private...

 

[M Paquette]

Heck, I know a fellow who became a millionaire through day trading. He did it twice.

If he can get another stake together, who knows? He might become a millionaire a third time.

 

[pperl]

I appear to be a bit more active than you are, Semiretired2008, as I look at things every day. I am 73 been pretty much retired since age 45 but then again I have never worked for someone, always worked for myself in various areas so in a sense I am never retired lol. I still manage two LLC's that we setup back in the 80's which deal with real estate holdings but, hopefully, I will have gotton rid of the holdings in the larger of the two and let my partners in the other one manage it.

I pretty much described what I hold earlier. I believe in owning commodity based stocks. We hold the following areas and percentages: Agriculture 18.6%, Banking 5.9%, Biotech/Pharma 6.1%, Comput/Technol 2.9%, Energy 24.2%, Precious metal mining 22.5%, Base metals 12.5%, Misc 7.3%.

The other day I bought more SID, a Brazilian steel company with its own iron and coal mines which pays a good dividend and I began a new position in IRS, an Argentinian real estate holding company which also pays a decent dividend. I am not into talking about how well I have done or hearing how well someone else has done as I much as what ideas you and others are tossing around.

 

[target2019]

I have tried forums like Morningstar and such, but have had little success. They mainly concentrate on normal trading standards - what you do when a stock crosses it's 200DMA or such. Not much care for free thinking discussions.

I was a member of a small group for several years, but the owner of the group had to close it down due to illness and no one else was willing to take it over. I couldn't because I was the token poor guy compared to them. They only allowed me to join because I was friends with the owner and they picked my brain for the free thinking analytical stuff. Most were fund managers and such and talked way above my head. It was not a forum like this. Totally private...

With regard to your small group, I can appreciate the effectiveness of that type of discussion. I think this ER forum could support similar ideas, but there could be significant noise in such threads. I think you had that in mind when you mentioned "not much care for free thinking discussion". M* has some moderation, but generally lets personalities take over, with subsequent mocking, etc.

I have learned the most by actively participating when someone comes along with a concept. You mentioned 200dMA, and that is where I've put a lot of time, by using Technical Analysis to "mitigate the downside". I know enough now to be able to accomplish at least one goal set for myself. I understand the moving parts and can devise and execute a system for myself.

That leaves me thinking I could gain understanding by discussing and observing what active traders do. At this time I am not a trader, but could see myself setting aside 10% for trading purposes when retired in a few years.

 

[Animorph]

Too much work, plenty of professional competition, and a different set of investing skills I'd have to learn beyond my current level. I haven't run across any compelling strategy that would convince me it would be worth it. Plenty of hedge fund managers that don't do very well. Even the best long-term mutual fund returns are not wildly above average for their investment mix. The upside of quick trading is undoubtedly matched by volatility to the downside as well. I can do without that. Not something I could recommend to anyone without knowing how to explain it to them in a way my mom could understand and execute successfully. I don't believe any one particular system will be effective for long enough to bet a retirement on it. I don't want to be finding a new one at 80.

 

[youbet]

I was actively trading about 5% of my portfolio (10% of my equity allocation) as we climbed out of the recession with a fair amount of success. I decided to increase my exposure to 10% earlier this year but haven't been able to find opportunities I'm comfortable enough with to get that high yet.

No day trading but frequently in and out of a holding within a couple of weeks. It's really a lot of fun and, so far, I'm ahead of my buy and hold TSM index fund holdings.

 

[pperl]

Well here are some basic ideas and concepts, some of them from Jesse Livermore, others from various readings over the years, and some just the way I go about things. I am not into talking about how successful we are but will happy to email or talk with anyone to give them a run down.

I am basically a buy and hold, value oriented trader though in years past I have made as many as 450 trades. Most of that was from the time when I was into biotechnology. I did very well in biotechs but the amount of work began to deter my interest so I switched into more value oriented purchasing. If anyone wants pointers on biotech methodology I'll be happy to pass along how I went about it.

Using fundamental & technical analysis I first focus on those areas or categories that interest me. My personal focus is Agriculture, Energy, and Mining. I create a series of watchlists using Worden, my charting software; but, it can be easily done with Stockcharts as well.

Having spent a lot of my earlier life dealing with spreadsheets I enjoy this type of data display. It's for this reason that I use Dtlink's Personal Stock Monitor Gold (PSM) which now even includes charting which I don't use because I am wed to Worden software for that functionality. But PSM allows one to export any data acquired to a spreadsheet format and then one can update their spreadsheets via the link with PSM.

Within Worden I have created a bunch of PCFs, which are simple programs utilizing various formulas inherent in the Worden program TC2000. One that I particularly like is Price % of 52 week high which lists the current price of a stock as a percentage of its 52 week high. Being one who buys when everyone one is selling or what is sometimes called 'bottom fishing', I find this to be an excellent quick means of determining what stocks within the categories I am searching might be interesting purchases.

If you're not using Worden or some other means of accomplishing this, it can be accomplished if you have a spreadsheet listing your watchlists. That's one of the benefits of PSM, that it can export to a spreadsheet like Excel, or LibreCalc.

Occaisonally some of the entry points I have chosen may have been too high. I don't like using stop orders because they are visible to market makers. Fidelity Active trader pro has conditional programming wherein one can create the equivalent of a stop order that isn't seen but since I pretty much have my computer on all day and am around during most trading days I don't utilize stops. If I were to go on vacation I might use the Fidelity features to protect myself.

When I buy, I don't buy in one fell swoop but usually break my purchases into 3 or 4 transactions. This is based on Livermore's advice in Reminiscences of a Stock Operator, by Edwin Lefèvre. Well that's enough blabbing for today. Hope you are all doing well,

as always,

 

[anethum]

I'm about 50% in stocks, and 3/4 of that is in index/sector funds & ETFs. 1/4 is individual stocks held long-term. At present, the individual stocks are all dividend-producing, but this hasn't always been true. Many of these I first became interested in from Value Line. I do additional research and technical analysis, and then try to buy on dips. In the last 2 years or so, I've also traded up to an additional 5%. These trades range from a day to a few weeks, similar to what others here have said. For trading purposes, I find myself watching technical behavior, trends, and correlations observed over time. I have only actively traded stocks which I believe also have good long-term potential. Over the past 2 years, my return from long-term holds as well as active trades has been much better than from my index funds & ETFs. Over time, I would like to up the proportion of my long-term holds. I don't think I have the stomach for actively trading more than the 5% that I've been doing, however.

 

[RetireBy90]

Too much work, plenty of professional competition, and a different set of investing skills I'd have to learn beyond my current level. I haven't run across any compelling strategy that would convince me it would be worth it. Plenty of hedge fund managers that don't do very well. Even the best long-term mutual fund returns are not wildly above average for their investment mix. The upside of quick trading is undoubtedly matched by volatility to the downside as well. I can do without that. Not something I could recommend to anyone without knowing how to explain it to them in a way my mom could understand and execute successfully. I don't believe any one particular system will be effective for long enough to bet a retirement on it. I don't want to be finding a new one at 80.

It is only work if you don't enjoy it ;-)

I'm not a trader, but with the follow the heard mentality, and the short time frame most pros work in, I'm thinking that an investor that can take a longer term outlook can find mis-priced equities, buy and hold while you wait for the price to reflect earnings.

I have a fido account that I use to hold individual stocks, about 10% of my holdings. The other 90% is in funds following my AA strategy. The cash acct doesnt figure into my retirement calculations. I would be interested in valuation discussions if that fits into your trading strategies.

 

[Nords]

Rick Ferri put up a good blog post on the subject today:
Index Fund Portfolios Reign Superior

You can guess which side of the active-passive debate he's on...

 

[photoguy]

I would think that a bunch of INTJ's would all be active traders. It kind of fits the personality type (IMO)...

Interesting. I've only had a little exposure to Myers-Briggs personality categorization, but I would think that INTJ would fit many passive-indexers.