How can i become a successful day-trader?
Answers: First thing, a lot of people will tell you day trading is really risky and not to do it.
The problem with that is they are confusing "risk" with "time." Day trading is no more or less risky than any other kind of trading. The difference is that you will either make your money quicker, or lose your money quicker. The end result is the same.
So if you want to day trade, go for it.
Here's the progression you need to follow:
1. Start out by learning the "50% retracement rule." You can G00GLE for it. The idea to take away from this, is that many major financial market moves are followed by substantial retracements. "50" is not particularly the magic number, it just means to be on the watch for large retracements in price.
This is the single most effective and reliable way to trade for a beginner. Other people will tell you about technical indicators, but trading these indicators is actually much LESS reliable in the long run.
2. Pay very little attention to news or tips. Other people will tell you that you should pay attention to a company's balance sheet, P/E, company news, etc. The reality is that these things have very LITTLE to do with stock price in the intermediate horizon (1-2 years), and have absolutely nothing to do with day to day price action. If you don't believe me ... you'll find out.
3. The best way to day trade is to trade leveraged products. This means things like currencies or commodity futures. Leverage is a double-edged sword. It can help you. It can hurt you.
4. The best way to day trade is with a company that offers low commissions and fees and real time quotes. They must be a member of the NFA (National Futures ASsociation), SIPC, and FINRA. These are regulatory agencies that make sure they won't steal your money.
5. Companies that offer futures and currency trading usually offer FREE demo accounts with which to practice. Take advantage of this.
6. As a trader, my concern is not to predict market behavior. My concern is to define expectations for risk and profit.
7. As a day trader, your trading plan must define your risk and profit objectives for each trade you enter. You must not stray outside of these parameters. You must not tie yourself into thinking that you can "predict" market behavior. Instead, you must identify the criteria under which you expect to make money and the method with which to control your risk.
8. As a beginning trader, you will do this by using "stop losses" to cut your losses once they progress outside your risk parameter. You may also take hedging positions in next month futures contracts. You may purchase/sell options. Anything to control your downside.
9. Trading is a probability game. You will take losses. You will make profits. Your trading plan must have a "reasonable" expectation of producing more profits than losses in the *long term.* Your plan should be based on the close observation and classification of the price behavior of financial instruments and their derivatives.
Those steps will get you started with the best chance of success.
If you are highly mathematical (ie. graduate level type of math), you may want to give consideration to the study of statistics as it is applied to finance. Your understanding of the advantages and shortcomings of financial derivatives (such as options) will be greatly improved.
If you have any questions, or need any details to what I've explained, feel free to email me.
Do you want to invest in stocks or options? You have to be well educated in this kind of field. A good amount to invest with would be around $7,500 - $10,000.
Why did Asia stock market gained while Dow Jones lost?
Answers: Actually what happened was US markets fell 5% +. But when Fed announced a rate cut sometime in the US afternoon, the losses were wiped away and US markets closed with just 1% -ve.
That was virtually like a gain. So, Asian markets started from up and ended up as they were aware of the Fed cut before start of trade. Second reason for them to be up was that they had already fallen a lot during 2 days but US dint fall that sharply as there was a holiday couple of days before due to Martin Luther King Jr. day
Different markets?
Different time zones?
Different companies?
Different currencies?
or
Maybe no one will ever know.
Different fundamentals. Asia is currently in booming economics. Developments are everywhere, wealth has been growing tremendously here in Asia.
While Dow Jones is based on US Market where fear of recession is very real felt there.
they gain you saw reflect to our rate cut.
watch tonight (morning over there) the stock is going to decline
Can a significantly intelligent individual significantly whip the marketplace trading?
Assume somebody with an unusually giant iq and a substantial understanding of making a bet mathematics, nouns, and economics.Assume this individual would be working with total income of approximately $100k and would work from his home office.
Assume this individual could devote several hours per year if necessary.
Realistically, is at hand a reasonable road this individual could master getting in and out of investments surrounded by a way that lead to a significantly higher return than the common market?
I am pretty capably versed in the streamlined market hypothesis, and I unanimously think that short-term trading is little more than flipping coins near transaction costs. But there clearly are entire firms set up that apparently formulate money trading the market, and in attendance are individuals who do make significant income trading. These successful traders are probable like any business individual who found a profitable niche: they do all they can to not publicize how they're making money.
Thanks.
Answers: Contrary to most of the others who enjoy answered before me, I imagine that you have to be a complete idiot to lose money surrounded by the stock market. The just way that I can see, that ethnic group lose money, is because they panic, or they do things which are really, really, stupid. You'll never walk broke betting on the stupidity of others. I only hold a tenth grade coaching, but I make a accurate living in the stock open market, by simply letting really "intelligent" people, present me money.
Sure their are many folks who can continually make 2 to 3 did-git returns on their money year after year.
Anyone can do it, They don't even entail a high IQ.
adjectives they need is to revise a few simple rules and develop a system.
This is a great website that can teach you adjectives these rules and help you develop your own system.
Intellectual type of intelligence is not satisfactory to make money on the stock bazaar. You need to hold emotional intelligence too within order to succeed. And whether you hold this kind of intelligence or not singular your experience can show.
If good benevolent of economics and finances was satisfactory to make lots of money within the stock market. Then adjectives the economics professors with their PhD's would own been billionaires.
if you know fourier transforms and are correct at statistics you can find three month cycles in plentiful stocks (I have a detail of about 200) from which you can pick let's read out 50 per year that are likely to bequeath you 9%-10% returns over given three month periods.
I instinctively have be playing this "system" for 4 years now near $20000 total investments and have made 8%-9% concrete returns each year (that turns out to be nearly 5% after the darned fixed fees they impose per trade).
So you could gross money but you would have to be capable of do trading with greatly more $ (so that the fixed fees are a lower percentage of the investment) or find some place that charges less than $7 per trade.
I procure several Financial Newsletters from Ivy League Graduates with Maters and Doctorate Degrees within Economics, and you know what?
I have tracked their picks for 18 years, and their illustrious level of teaching has amazingly little to do with stock results. I enjoy done far better with my own research.
I do however, put nearly $10,000 in an description specifically dedicated to short occupancy investments. Overall, I have done pretty all right, but it is a crap shoot.
Good Luck
The thing you requirement to ask is: the individuals who make money trading, how "consistent" are their gain, and how much of it is attributable to "luck" rather than skill.
If you look into it, I reason you'll find that many traders will own a certain amount of luck for a extent of time, they'll rack up a bunch of gains and consequently one day something without warning will happen or the randomness will flipside its head and suddenly they are wipe out.
Most people I know who made plentifully of money in nouns did not do so from trading. They did from being stock brokers or selling some sort of planning or skills to people that thought these be valuable.
I'll recommend a honest book to you to drill the point home: "Fooled by randomness" by Nassim Taleb.
I once asked a similar question to the cranium of the quant group at one of the big investment banks on Wall Street. The answer I get was succinct:
"Financial market are a random totter. I cannot imagine that trading would be a lucrative business. By the time you're buying, the smart money have already sold."
The data on this supports the updated markets hypothesis pretty resourcefully. Studies have be done where researchers earn data on how successful (or unsuccessful) a range of types of trading companies are in hitting the market, and across the world these enterprises backfire or don't have statistically significant nouns in the long residence.
The most obvious enterprise of this type to try to study is mutual funds. Mutual funds are a obedient subject because mutual fund managers tend to be immensely, very smart, and respectively one of them has an entire staff of smart inhabitants armed with cutting-edge models and facts, as well as a Rolodex full of other smart ethnic group (and insiders) that they can mine for information. In short, they're the most well equipped associates to beat the bazaar.
The data seem to show that actively managed funds (that is, funds that "pick stocks" within an attempt to beat the market) certainly trail the broad market over the long possession, net of transaction costs. Of course, some funds do smash the broad market contained by the short term, but the roll of funds that beats the bazaar changes from year to year and doesn't follow any consistent guide.
Mutual funds do offer a service to investors, obviously: Diversification. Diversifying through mutual funds is much, much cheaper than building a portfolio of individual stocks. However, index funds are the way to step. They generally outperform actively manage funds and the costs are lower.
If you are well versed within efficient marketplace theory consequently you know the answer is that it is not very unlikely. There are thousands of intelligent relations with sophisticated computer models , research resources, low transaction costs and even access to corp executives that are tryiing to gain an edge. What make you think you can consistantly gain an circumference.
They keep coming up next to gimmicks: portable alpha, long short funds, commodities, seperately manage accounts, hedge funds etc.
Superior intelligence make a difference in most career but when it comes to investing it doesn't seem to net for a consistant winner. That's because not a soul knows what the bazaar or interest rates will do. The don't know the market bottom or the bazaar top. They can study leading indicators, backbone test philosophy, look at underperforming industry groups, currency changes - and it adjectives seems similar to science until they try to predict which stocks, sectors etc will prosper on a consistant principle.
Actually, you could say intelligence is a handicap because it tempt you to think you can whitewash the market or you hold an angle that nobody has thought of. Or it make you unlikely to set up a simplistic index fund portfolio and just rebalance it once a year. Surely an intelligent individual should be able to do better if they purely study the market a bit more.
Good Luck