Any of you folks into active trading? I've got some cash on the sidelines and with the recent drops i'm interested in buying-in. I'm mainly into Tech stocks, but i'm interested in getting into those ETFs that are a market-multiplier (ie: SSO, UPRO).
Any thoughts
PS. Yes yes I know investing is tricky and in the long-run short term trading isn't as safe blah blah.
Forums:
DISCLAIMER: Forum topics may not have been written or edited by The Key Play staff.
Comments
J/k
I recently developed a trading algorithm that is ETF based but is more of a daily/weekly trader, the best two ETFs that I've been using are TQQQ (3x leveraged NASDAQ) and JDST (A bear market of gold miners) if you are looking for something that is a little less time intensive I would say that TQQQ is a good option, but if you want to get more aggressive/risky you can make a lot of money playing JDST.
I sure hope one day I am as smart as this guy.... my head is spinning
me too, I'm all like
Thank you, some of my coworkers have really helped out with it (turns out working in a simulation department means the people you work with are brilliant coders)
Nice. UPRO is the same (3 x for S&P500) so i've got a position there, but I was hoping to dabble in some individual stocks myself and didn't know if folks had done some legwork ahead of time to dive into the fundamentals and technicals without purely just going with what motleyfool and others are saying.
ps. Is your algorithim based on buy and sell signals in your brokerage or something else?
my algorithm gives me daily updates on buy signals based on volume and closing price from the past two days, I've tested the combinations individually across the various etfs (I have also found SOXL, LABU, ERX, ERY and UGAZ to perform well in backtesting)
Note that JDST is a Junior Gold Miner leveraged TRIPLE BEAR ETF ... this means it's extremely volatile. The junior refers to the smaller miners, not the big boys. I'm in NUGT is a leverage triple bull golf miner ETF. These tend to re-balance themselves frequently-that means decay in the price that's not exactly proportional to the stocks themselves. Only play these if you're very risk-tolerant (i.e. willing to lose money quickly...or make it just as fast)
How did you actually go about structuring your algorithm or trading strategy? This question can be answered also by anyone who feels like they have good experience or is "winning" in active trading or investment. I don't need specifics, your formula is your business, but some insight into getting started would be greatly appreciated.
Most articles, videos, and "classes" online don't go into the actual strategy and ones that do are expensive, sketchy, or both. Also most of the indicators as I've seen explained, don't really work too well (if they did everyone could win and just take it to the extreme). So building a mathematically sound and non arbitrary formula seems like a bit of a challenge.
So I'll do a brief overview of how I set it up, myself and some coworkers had heard of a winning strategy used by another guy at our company using one etf and one specific buy signal/exit strategy centered around closing price and volume, we decided to take that a step further and created a couple different matlab/python codes that pulled the approximately 1,500 etfs that exist and run them through loops that tests for the best buy signal and exit strategy, we looked at those returns and used that data to formulate our strategy
Wow how did you access all of the historical chart data?
Google, nasdaq.com has a lot of that information, its all daily data not minute by minute
You ain't trading until you're dealing in leveraged volatility indices my man.
You ain't trading until you accidentally hold 86,300 shares of SPY with only $50,000 in your account. Options trading can be crazy if you're stupid.
This dude sold 1,000 put options. Before the options expired SPY dropped in the money and someone exercised their right to sell to him. He ended up with 86,300 shares of SPY for approximately $23,000,000 on his $50,000 account. The stock went up a couple cents before he sold all of the shares. Right after he sold the price began to drop.
I don't even pretend to mess around with options. Shit's terrifying.
Maybe I'm just an idiot, but I've always found them to be confusing. My company doesn't do any thing with options or day trading, so with options at least, my practical knowledge is pretty slim. But I did have to have a decent handle on them last summer when I sat for the CFP exam. It took "teaching" them to my dogs before it all finally clicked. Then I promptly forgot most of it once I passed.
Anyway, my feelings on options: Do Not.
Yeah you have to be willing to lose money with options and you have to put in work, but options are probably the quickest way to get a good ROI. THis also means it is the quickest way to lose money if you get greedy.
This guy clearly had no idea what he was doing and is extremely lucky.
Options are a good game to get into, and basic puts and calls are worth learning about if you're into trading. When I began and was first learning, I'd be sure not to ever have more in holdings (when exercised) than I could cover. Starting with 5-10 contracts can still yield very high returns, and you're only on the hook (at worst) for 500-1000 shares, which can usually be covered by $50k or less.
Buying 1000 contracts when he has no idea what he's doing is scary.
I'm no options expert, but I don't believe somebody else can exercise his option. Either way, don't trade options on margin.
VBNM VBNM VBNM VBNM VBNM
Isn't that how all advisors give advice??
I have a wonderful investment opportunity. One that pays off now and in the long term.
https://hokieclub.com/ways-to-give/how-to-give/
That is a wonderful investment opportunity, however I would also recommend investing for the future so you can continue to give over the long term. At least, that's my strategy. It's all about diversifying your portfolio.
This IS investing in the future.
Of course the best way initially is to invest both for yourself and the university in a VT degree.
It's a gift that keeps on giving.
If you're feeling lucky, cryptocurrencies are at a 4 month low. That said, they may set new lows before (if?) they turn around. You can make a lot of money. Or you can lose a lot of money, but that's what makes volatility fun. If you go this route DO NOT USE coinbase. They are super user friendly (easy interface, good app, various payment options), but charge ridiculous fees for it (4%). Use their trader infrastructure, GDAX. Posted trades are free. Market trades are 0.25%.
Or just follow Jon Oliver's advice and avoid them like the plague.
Actively trading is fine as long as it falls within your risk tolerance and you can afford the risk. I personally go more for buy and hold and dollar cost averaging and is what I recommend to my investment clients. I also prefer mutual funds, mostly because that is what I'm more familiar with and currently hold licenses in. I also get wary anytime someone tells me their advisor is recommending a bunch of random trading since that can be one way to drive the commissions they earn, but 🤷♀️
In the end, it's all about market timing and getting that right.
Put it all in Toys R Us.
You're welcome.
via GIPHY
logged in just to upvote. it's a shame there are only 3.
Do everything opposite of what this guy says
ha ha ha, I've actually seen a youtube interview with him where he basically says that he does a lot of exactly what you said. says one thing but then has the account size to move the market and does the opposite.
His advice is always way too late.
Usually he says "buy" when the market has peaked on a certain stock, but it usually gets a small bump from his recommendation. Just before a dip.
Cramer gets a lot of hate, but the guy was a darn good fund manager back in the day, beating the avg market returns with his hedge fund for a LONG time before it nearly killed him.
Highly recommend his book 'Confessions of a Street Addict'.
I like Cramer quite a bit, but I find his "tips" are generally a bit too late.
I like Cramer quite a bit, and have learned a few things from him, but I find his "tips" are generally a bit too late.
Maybe if his tips weren't a bit late, I'd like Cramer...
The last few years I have started investing for dividend income...ATT, O (Realty Income), PG (Procter & Gamble), etc... My goal is about $2,000/month in dividends by the time I retire. That would be some nice extra income in retirement, and the stocks would eventually pass down to my kids. I also reinvest my mutual fund dividends, which makes a big difference over time.
Like most people on here though, I stay away from active trading. With a 1 yr old and 3 yr old, I don't have the time to do the research to be successful at that.
Same here. Dividend income reinvesting is how I have been building my portfolio for years. If you don't want to play with picking your own stocks, there are several great mutual funds out there for dividend income and balanced growth/income. I like Vanguard personally.
Warren Buffet once said, if he was starting over he would have invested in index funds.
Buffet says that, but you notice he doesn't do it now.
When you have billions, better deals become available.
He still hands out the index approach recommendation for your "average" investor as an excellent approach, though. I don't think the fact that he doesn't do it personally is a reflection that it's not effective.
Index funds are an excellent approach.
With index funds, you can get market returns without doing a lot of work. It's also an instantly diversified stock investment, and takes a lot of the emotion out of investing. You can choose an index that reflects your philosophy. Overall index, growth index, or value index. That's what Buffett means.
Active investing is a lot of work, and carries with it some inherent risk.
He already has a diversified portfolio. Good if you're just starting, but unnecessary when you've got billions to leverage elsewhere.
Vanguard does me right
if people are more interested in buy and hold strategies I recommend reading this: very interesting concepts backed up by testing and numbers https://www.marketwatch.com/story/the-ultimate-buy-and-hold-strategy-201...
This is very interesting and timely for me and thank you for passing it on!
Just remember to invest with a name you can trust. Like Wu Tang Financial.
Hmmm, so...how does one invest well enough to make money when they don't have the kind of start up money to invest in these things?
Is there a worthwhile investment strategy to follow when you only have 100-200 spare dollars a month to invest to attempt to build wealth?
Roth IRA with the low-fee brokerage of your choosing investing >90% in stocks.
This is a loaded question but...Target dated mutual funds are a great start. The mutual fund itself is already relatively well diversified. And they become more conservative over time so you don't have to babysit anything. Vanguard funds are great, and their target dated funds have low expense ratios.
There are fintech start-ups that target this kind of demographic. Look up RobinHood for example.
My understanding is that they target your situation exactly. Attracting folks with limited cash flows to direct towards investment by offering free investment vehicles. You likely won't make a boatload of cash and are still entirely dependent on market performance, but at least it let's you get your feet wet with investing.
Robinhood and M1 Finance are probably the biggest players here. M1 is entirely free now. No fees!
Mutual Funds.
Your only restriction is you are going to have to save enough to open the account. Depending on the fund, most have a $1000 - 3000 minimum amount to open. After that, you can set up auto deposits if you want for regular accounts, traditional or Roth IRA's.
Big key is getting started early. Let time work for you. Old rule of thumb used to be invest $2500 a year starting at 25 and you will be a millionaire by the time your retire.
Rule of 72 is your friend. (If I remember right...)
At 10% return, money doubles every 7 years.
At 7% return, money doubles every 10 years.
Dollar cost averaging, avoiding taxes as long as you can, employer matches, all the better.
I'm a risk-averse engineering type so I'm definitely most comfortable in the long term index fund / dollar cost averaging camp. Just wanted to throw out some advice that helped me determine what strategy I would follow. 'The Investor's Manifesto' by William Bernstein is a great book. He's obviously an index fund strategy supporter so go into it understanding that. I got started with that book and it lead to many, many more. Aside from that, I would urge everyone to read books about the history of the stock market. Understanding some of the hysteria surrounding events like the South Sea Bubble and Dutch Tulip Mania will hopefully help you in the future, regardless of your strategy.
Loyola is sitting at +700 to win the championship. Not a bad shout.
This is the kind of sound financial advice I've been waiting for in this thread.
Hmm, I could stand to risk 20 bucks...
my "active" trading consists of swing trading options in order to earn 10-50% ROI. nothing too crazy--i purchase calls/puts based on what technicals give me and exit within 5-14 days. if nothing shows up, then I don't buy. These past couple weeks have been crazy and i'm not going to chase a trade for the sake of trading.
recently, I've been scalping SPY options via day trades for a quick 10% gain and then I just get out and relax for the rest of the day... can't get too greedy or you'll lose your account. there's a reason why there's a whole body of work focused on trader psychology..
glad to see there are Hokies here playing the market, too.
in your case, i second the mutual fund route unless you're interested in become "active." if that's the case, learn as much as possible and don't risk what you can't afford to lose. good luck!
What sources would you recommend for learning the nuances of shorting?
I started a scottrade (now TD) and gained the necessary margin for doing so but haven't found a good resource to learn
to be honest, I swear by Investopedia. it was introduced to me in my Intro to Finance class when we were told to create an account to take part in a stock market challenge where the student who had the most money by the end of the semester would get class points. My roommate took it the year he had the class because he added options trading to his arsenal (which gave him tremendous leverage) compared to his peers who only traded stocks.
my technique for entering puts (shorting) is to follow 1- and 5-minute candlestick charts while using simple moving averages (5/8/13 day simple moving averages (SMA) which is common for day traders; others swear by the 10/20 exponential moving averages (EMA) for the same effect--it's your preference). I also keep in mind support and resistance levels, too, to see if the stock will break through or reverse during its movement.
when I see a crossover of my SMAs, that gives me my position to enter. if nothing shows up, I don't trade. i use moving averages because it eliminates the emotion out of trading by giving me clear pictures for entry/exit. a lot of it is just practice and experience. there are days when i don't feel like trading where i'll just watch for movement and learn from it.
I hope I answered your question. for candlestick charts, Steve Nison is the expert on the subject to start with. he's the one who brought it over from Japan. nowadays, Amazon has good books on understanding the candles and charting. just read the reviews to see what you're comfortable with. Investopedia is a great source for everything else...
EDIT: if you're going to short stock, most traders swear by Interactive Brokers because they have available inventory. never used it but it's worth checking out.
What platform do you use? I've gotten into options in the last year and don't really care for mine. It makes it a little tougher to handle something like you're outlining - 1 and 5 minute charts
I was originally with OptionsHouse but they got bought out by E*Trade, which is what I currently use. I have friends who swear by TDAmeritrade so if E*Trade ticks me off, I might make a lateral move over there if they get some promotion where I can get free trades plus bonus bucks.
there's free charting sites online with realtime market movement if you want to keep your current broker and trade through a phone app while using your PC to monitor candlesticks and indicators... (Edit: oops, saw that you DIDN'T like your current broker!)
my fave right now is a toss between Technician (out of Charlottesville, VA LOL) or FreeStockCharts.com. the latter can only be used on Internet Explorer for some weird reason... both let you use all of the popular indicators from MACD, Bollinger Bands, EMA/SMA, etc.
I use candle glance charts. Default settings on MACD and add slow stochastic with 5,1. I look for MACD forming a hook and SS turning up at bottom of range. I don't trade much and am happy with staying out until comfortable with indicators.
i don't trade your method but couldn't agree more about not trading if the indicators won't show me favorable conditions. as I alluded to above, indicators help me take the emotion out of trading and promotes rational thinking while tamping down greed or the need to "overtrade."
I'm not very sophisticated but have had good success picking bottoms. Exiting is what I have trouble with. Most times get out too early but am happy to exit with gains.
haha i mean if you want Vegas on the exchange just play with TVIX
LVS actually isn't bad
*Checks thread to see who's going to prison for insider trading in the near future*
What is the best resource, book or series of articles, you recommend to people who are trying to learn about all the various investment strategies?
if you have the money there are education courses out there for different strategies. I've gotten mine through Online Trading Academy and they provide a lot of resources but it does come with a price tag. I've also seen other courses you can download or buy for around $200-$300 dollars as well. Dont' know how good those ones are but I like OTA so far.
edit: as far as books / articles for strategies there are dozens out there as well as tons of strategies. but google is a decent place to start....sorry not too helpful there.
Honestly, I would find a firm that is fee-only as opposed to commission based and talk to a financial planner/advisor and see what they suggest. It's hard to give blanket advice because what is right for one person is not right for someone else. A good advisor is going to get to know you, your situation, risk tolerance, etc and help you decide on an investment strategy that will help you reach your goals. They will also explain everything in an easy to understand way. I could ramble for hours about this, retirement planning, estate planning, insurance needs, but I'll stop while I'm ahead.
Just getting started in active trading myself here. Have been using sim accounts for about 4 months and just recently started trading live however I keep my risk super low. So not really earning a boatload when I win (enough for some hardy's coupons though) but also only losing around $5 when I lose.
I'm only trading the Forex markets right now and want to get into futures once I get around $10,000 in my account.
What broker do you use for forex?
right now Oanda but looking possibly switching to NinjaTrader as you can trade both Forex and Futures there. I also have an account with Tradstation which you can look at Forex charts but can't live trade them.
I would love to provide some insight on this thread, but it could be troublesome given that I am now held to a fiduciary standard.
The grind for that exam was unpleasant
I'm sure you're all the better for it.
Have a leg.
Out of curiosity, which exam?
CFP®️
Like having a second full time job for a year preparing
I did that last summer. I lived and breathed the review material for 3 months. I even took the week off before my test date to study. Did you go to a live review class, if so, which one? I went through Zahn, and I thought it was excellent, but I'm mentoring some other possible
victimsprospective candidates, so the more info in my arsenal to give them, the better. Anyway, seeing that congratulations, you passed (preliminarily) was such a relief. I practically ran out of the testing center, because I was afraid they would tell me it was a mistake 😂Congratulations, it's quite an achievement and you deserve more than one leg!
I work for Vanguard, so they took care of the Kaplan program and the live review (which was taught by the son of ASU and Cowboys QB Danny White of all things, really awesome guy and great instructor).
I had access to Zahn practice questions as well, and I would say the logic of those questions was much closer to the actual exam questions I ran into
I thought I was a decent test-taker until I took the Zahn review. Then I discovered that actually, I was just lucky up until that point. I didn't use any other review materials, but what I had definitely kicked my butt. In the end, it was worth it. It was just a very long 12 weeks.
I was hoping that you had an actual market for sale.
I kind of fancy the idea of wiling the hours away behind the counter of a quaint little fruit and veggie stand out in the country...
Oh well.
I can picture it now. Your fruit and veggie stand would also have those little knick-knacks with the old-timey/country sayings, but instead they would be Leonard quips.
Playing the market is interesting if you've the knowledge and can afford to lose everything you invest, but after reading all of the responses here, it becomes pretty clear that it isn't for most folks. Like has been stated more than once, Vanguard has been very good for us, as well as the notion that the market is a long haul marathon sort of thing. Slow and stodgy, for sure, but blue chip stocks and conservative approaches will usually serve you well if you can think in terms of decades, not months. It can be hard to keep the knee jerk reactions from forcing you to jump at the whiff of a downturn, but for us, slow and steady has been the ticket.
Yup, really important for people new to investing to know that the high risk active trading isn't the norm. Learn about Vanguard, choose some low-cost index funds, put money in every month and forget about it. More likely than not you'll end up rich and have a significantly better return than any active trader.
My first experience investing was when the market was good, and everyone said if you're young you can be high risk, so I was aggressive. Made some money, then had my first "dip", in which the market lost 15%, but I lost 75%. I decided I needed professional help, and went with an advisor. Then I changed jobs, and got with a company with a 401k, and a match. Met with that advisor, and found out my first advisor was putting my funds into what made him money, not me. Took advantage of the match, and talked to my advisor two or three times a year, asking why. A couple of plan/advisor changes later, and doing that, I feel like I understand the market well enough to know if my funds work for me, and if I am getting good advice. I have a two IRA's from before, the 401k, an HSA, two 501k's, my wife's 401, and an investment account. None are huge (or I would not be working), but all are different (Munnie bond, actively managed (by others) fund account, ETF's I picked, mutual funds I picked, mutual funds recommended by and advisor, age based Vanguard, 501k mandated). They have different fees, and the returns vary year to year, but they all run very close on a 5-7 year average return after fees, and double every 9-10 years. I am not getting rich quick, but I can pay for my kids in state college, and should be able to retire on about what I make now, less what I am investing now. Every one of the advisors I have had have tried day trading, thinking they knew more than the average guy, and all gave it up. I have several other friends try day trading. None still do it.
I know people that lost everything day trading. Buy and Hold is a much safer if more conservative strategy.
One approach I've used in my Fidelity retirement account for years is to have a set of domestic and international growth funds as a base, then once a year check the multitude of select funds and change investment allocation in to a few funds that have tanked. You get the best companies in a downtrodden industry (be it Biotech, Wireless, Defense, Materials, Energy Services, etc) and then hold on for a year or two and reassess.. When a industry comes back is making 52 week highs, swap some out in to another that is struggling.... have done really well with this strategy.
I would say spend half your money on women, booze and gambling and then just waste the rest
That's sound U.S. servicemember investment advice right there.