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On my first try I got a return of 34% over a month of trading, while the Buy & Hold got 5%. But I'm not going to quit my day job. It's quite easy to keep aflo
by SamBam 6y ago
On my first try I got a return of 34% over a month of trading, while the Buy & Hold got 5%.
But I'm not going to quit my day job.
It's quite easy to keep afloat if you're trading on something like BitCoin that mostly just goes up and up, with the occasional downward blip. But since you don't know when it all might come crashing down, you may as well be doubling your bet every time you lose at roulette -- that also feels like you keep winning, until you don't.
One thing that would probably be good is to have people create accounts, and ensure all their sessions are logged. That will make it so that people can't just forget their losses and pretend to themselves that they usually win.
- adflux 6y agoIts very easy to make money if the market is only going up. Are you beating the market?
- deleted 6y ago[deleted]
- dpflan 6y ago"...But since you don't know when it all might come crashing down..." - Shouldn't stop orders help with this?
- tines 6y agoI believe that stop orders are not effective during the after-hours period. This might be because they require a market-maker to actuate, but I'm not sure.
- deandree 6y agoIf you place stop orders at predictable places (most traders do), they can be the sole reason why you lose money. Overall the market is expert in triggering your stoploss. And no, it's not manipulation or exchanges trying to make you broke - beginner stoplosses are usually super obvious and free money lying around.
- deandree 6y ago"you may as well be doubling your bet every time you lose at roulette" - in trading it's called DCA or Dollar Cost Averaging. Works ok/good for very long term investments in stable assets like SP500 Index Funds. But for daytrading the rule of thumb is "don't add to your losers". There's a good reason for that.
- hansvm 6y agoDCA isn't a panacea. It performs well in some scenarios and poorly in others (e.g. if by some means you're somehow certain the market will have a large dip and recovery but you don't know anything about the timing then dollar cost averaging will outperform many alternatives). Applying a rule of thumb as simple as "for long term investments in stable assets" misses enough nuance to lead people astray.
- jiofih 6y agoIt literally has 100% guaranteed return over a period of 20 years, going back all the way to the first stock exchange. Not the best returns though.
- RussianCow 6y agoNothing is "100% guaranteed". There are lots of reasons that the returns of investing in index funds using DCA may dry up, or even fall over the long run—for instance, it's not inconceivable that a significant enough market downturn could bankrupt a lot of Fortune 500 companies, bringing the indexes down significantly for a long period of time. Even though these types of scenarios seem extremely unlikely, it's incredibly inaccurate to say that any such returns are "100% guaranteed".
- jiofih 6y agoYes, you can argue that, but it’s statistics, and includes the three big crashes the market has lived through. It’s a 20 year period for a reason - it’s how long it would have taken you to recover from 1929 if you bought at the peak just before the crash.
- bko 6y agoIf you need any more help dissuading yourself from becoming a day-trader, I made a Matt Levine Insider Trading Game. You're given 4 quarters of a stock's history and earnings for the current quarter. Then you are presented 1 of 2 opposite paths (just actual and -actual daily movements). You then have to pick the correct path. https://insider-trading-game.netlify.app/ https://insider-trading-game.netlify.app/ https://github.com/breeko/stox https://github.com/breeko/stox