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anonguest
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sounds like a waste of time and life to me , just remember there is no easy way to a buck legally and you won`t go far wrong.

now if you bend the rules a bit i`m sure you will do ok. , worked for the bankers :lol:

Or IFAs taking half a percent rolling commission off low yield bonds funds invested in by gullible customers

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I know a few economics students :rolleyes: who suddenly think they've got an insight and will make a mint by trading. I had to explain to them, for example, that the broker trades against the client and sometimes doesn't even place their trades.

They didn't believe me of course, they knew better!

Who would have known that betting up a graph going up or down would soak up so much human effort...

http://www.cityam.com/article/your-broker-trading-against-you

Have to admit its a pretty rubbish way of making money. Certainly isn't a 'get rich quick scheme' and the industry isn't helped by an army of so called trading guru's who also can't trade.

But its not helped by retail traders also who think its easy, and forget that 'trading' is a global contest where you are matched with big banks, institutions, hedge funds, predatory funds and so who can hire big talent, algo's, super fast computers.

So if you are hoping to rely on a $99 indicator off Clickbank or a 'moving average crossover' these 'tools' just won't cut it! All the popular 'strategies' risk being arbitraged away very quickly.

Also not helped by pretty rubbish 'technical analysis' often provided by brokers. I very much doubt Goldman Sachs prop desk is pressing buttons at the sight of an 'evening star' or a 'harami' candlestick pattern forming on their charts.

I've just really started to see how important 'volume' is, which in terms of Forex is a pretty ropey thing due to the lack of a central exchange, so you either have to infer either from 'tick volume' or via institutional volume, via for example the futures market.

However even volume can be taken out of context, for example there was a 'trader' yesterday who was short the S&P because 'volume' had dried up (hmmm). But if you can get a bit into footprint charts and order flow analysis, it all starts to make a bit more sense, and is less of a 'guessing game.'

You have totally forget all that crap and see how the market actually functions, the market makers model, how 'liquidity' works and so on, an awareness of how 'real traders' trade such as an awareness of 'gamma scalping' and so on.

Retail traders will have to up their game other than pressing 'buy' or 'sell' on their phones (and no wonder why brokers love to make these app's).

Having said that, some retail traders succeed against all the odds, and get quite good at it. I only regard myself as a small time trader though.

I did speak to a quant or algo developer why retail couldn't run algo's and he said retail platforms were just not up to it (and the spread, slippage etc would work against you) as you are in the realm of making very tiny points, but executed thousands a day (or second) mounts up for the institutions.

There was an algo firm mentioned this week that had never had a loosing day (or perhaps one). I'll try and dig out the link, but that is the competition.

Edited by aSecureTenant
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The market has further to run IMO*. I won't be selling out and if a correction comes it will be a welcome opportunity to increase and diversify my portfolio some more.

*compare the yields on the FTSE to NYSE and European markets they seem healthy by comparison. I can invest in sound companies yielding 3-4% in dividends (with good dividend cover) against the 2-2.5% I'd get in American stocks.

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The market has further to run IMO*. I won't be selling out and if a correction comes it will be a welcome opportunity to increase and diversify my portfolio some more.

*compare the yields on the FTSE to NYSE and European markets they seem healthy by comparison. I can invest in sound companies yielding 3-4% in dividends (with good dividend cover) against the 2-2.5% I'd get in American stocks.

but you could have got 8-1 800% on bobby killing lucy ??

Edited by longgone
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The market has further to run IMO*. I won't be selling out and if a correction comes it will be a welcome opportunity to increase and diversify my portfolio some more.

*compare the yields on the FTSE to NYSE and European markets they seem healthy by comparison. I can invest in sound companies yielding 3-4% in dividends (with good dividend cover) against the 2-2.5% I'd get in American stocks.

Yield differentials - what fed calls equity risk premium - is poorly correlated with 10 year returns on stock.

http://www.advisorperspectives.com/dshort/updates/Market-Cap-to-GDP.php

Market cap / GDP is what buffet considered single best measure valuation. Highly correlated subsequent returns over decade. Only been more overvalued once on that basis. And apparently overvaluation in 2000 was concentrated in tech so median valuations are actually worse now.

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Yield differentials - what fed calls equity risk premium - is poorly correlated with 10 year returns on stock.

http://www.advisorperspectives.com/dshort/updates/Market-Cap-to-GDP.php

Market cap / GDP is what buffet considered single best measure valuation. Highly correlated subsequent returns over decade. Only been more overvalued once on that basis. And apparently overvaluation in 2000 was concentrated in tech so median valuations are actually worse now.

That said...you might well be right!

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As a young accountant in the 90's (the "irrational exuberance" years) I used do the accounts for my employer's investment portfolio (completely outsourced to fund managers), and I always used to pester my boss about why we didn't have a bigger proportion in equities, when they seemed to be doing so much better every year. When you're young, 5 or 10 years of nothing but gains looks very persuasive. (Mind you, i don't know if all those Landesbank bonds turned out to be good in the end or not)

I find it strange however, that anyone over 50 who must have lived through several rollercoasters in their time, isn't more prudent (including about houseprices).

edit: and for many years, I was rather pleased with myself, having been proved "right", it is only recently that I have realised how irrational markets are. And how irrational I was myself.

Edited by Steppenpig
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Put it this way. If you invested in the FTSE in 2000 your portfolio would have halved in value TWICE.

You'd be crazy to put serious money into the markets now. It's a deflationary time where cash is king, markets are at real extremes, but will probably go much higher. The question is, do you want to risk a 50% loss for a 20% gain?

I trade for a living. I took me around 7 years part time hobby to understand it and it's been my full time job for just over 2 now. It's literally the hardest thing in the world to do, reason being the psychological side. Working all week and losing money is tough on the facilities, now try years and years of that because no-one will show you how to do it. It's a constant battle, even when you know what you're doing, you always have to go against the herd.

If I could recommend anything, it's know what you're getting yourselves in for if you do decide to go down this road. The rewards on the other side are fantastic, but believe me you won't be getting to the end of it before at least 5 years of graft and losing money

Just added up this weeks profits £219.56. That's 8+ hours a day, 5 days a week. But I enjoy it, and live a frugal life. If it keeps me out of working for the man, I'm happy.

Of course if can be much better sometimes (and worse)

to add: those 8 hours+ a day are spent going shopping, walking the dog, watching movies. There is a lot of waiting around in this profession.

Edited by honkydonkey
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Have to admit its a pretty rubbish way of making money. Certainly isn't a 'get rich quick scheme' and the industry isn't helped by an army of so called trading guru's who also can't trade.

But its not helped by retail traders also who think its easy, and forget that 'trading' is a global contest where you are matched with big banks, institutions, hedge funds, predatory funds and so who can hire big talent, algo's, super fast computers.

So if you are hoping to rely on a $99 indicator off Clickbank or a 'moving average crossover' these 'tools' just won't cut it! All the popular 'strategies' risk being arbitraged away very quickly.

Also not helped by pretty rubbish 'technical analysis' often provided by brokers. I very much doubt Goldman Sachs prop desk is pressing buttons at the sight of an 'evening star' or a 'harami' candlestick pattern forming on their charts.

I've just really started to see how important 'volume' is, which in terms of Forex is a pretty ropey thing due to the lack of a central exchange, so you either have to infer either from 'tick volume' or via institutional volume, via for example the futures market.

However even volume can be taken out of context, for example there was a 'trader' yesterday who was short the S&P because 'volume' had dried up (hmmm). But if you can get a bit into footprint charts and order flow analysis, it all starts to make a bit more sense, and is less of a 'guessing game.'

You have totally forget all that crap and see how the market actually functions, the market makers model, how 'liquidity' works and so on, an awareness of how 'real traders' trade such as an awareness of 'gamma scalping' and so on.

Retail traders will have to up their game other than pressing 'buy' or 'sell' on their phones (and no wonder why brokers love to make these app's).

Having said that, some retail traders succeed against all the odds, and get quite good at it. I only regard myself as a small time trader though.

I did speak to a quant or algo developer why retail couldn't run algo's and he said retail platforms were just not up to it (and the spread, slippage etc would work against you) as you are in the realm of making very tiny points, but executed thousands a day (or second) mounts up for the institutions.

There was an algo firm mentioned this week that had never had a loosing day (or perhaps one). I'll try and dig out the link, but that is the competition.

Interesting post, thanks. Don`t really think I would get into this too heavily myself, but there is a guy at work all excited about doing it ASAP, so I will pick his brains a bit about how he gets on.

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Put it this way. If you invested in the FTSE in 2000 your portfolio would have halved in value TWICE.

You'd be crazy to put serious money into the markets now. It's a deflationary time where cash is king, markets are at real extremes, but will probably go much higher. The question is, do you want to risk a 50% loss for a 20% gain?

I trade for a living. I took me around 7 years part time hobby to understand it and it's been my full time job for just over 2 now. It's literally the hardest thing in the world to do, reason being the psychological side. Working all week and losing money is tough on the facilities, now try years and years of that because no-one will show you how to do it. It's a constant battle, even when you know what you're doing, you always have to go against the herd.

If I could recommend anything, it's know what you're getting yourselves in for if you do decide to go down this road. The rewards on the other side are fantastic, but believe me you won't be getting to the end of it before at least 5 years of graft and losing money

Just added up this weeks profits £219.56. That's 8+ hours a day, 5 days a week. But I enjoy it, and live a frugal life. If it keeps me out of working for the man, I'm happy.

Of course if can be much better sometimes (and worse)

to add: those 8 hours+ a day are spent going shopping, walking the dog, watching movies. There is a lot of waiting around in this profession.

Can you tell us how to get started in a paragraph?

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Can you tell us how to get started in a paragraph?

Sure. Learn every aspect of this form of trading:

http://www.trading-naked.com/alan_andrews_course_1.htm

It was written by an MIT professor who lectured in thermodynamics. He applied the principles of Newtons laws of action and reaction to the stock market. I am absolutely in amazement every day I do this, I literally, eat, breathe and sleep this because not only is it my job but it's just absolutely amazing to see in action.

Here is one of the 'median lines' you use, it's current, it's what I've been using for a while. Just look at the way the price is moving around it, it's not random. That is the DAX

WKcAO4y.png

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Notice the Centre line (balance) , Action (lower line) and Reaction (Upper line).

Newtons law, it's physics.

The path price takes is its frequency, hence lines drawn at the same angle as the median line carry its path.

If you want me to look at something random I can to show you. Just pick a ftse stock.

Edited by honkydonkey
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I think I was that boy once - circa 1997. Shiney eyed engineer graduate working in IT thinking of a possible career in the city.

Actually I did quite well for a while on my own account, I recall making £8k in a week at one point.

That said, the death of dot com somewhat curtailed those ambitions.

The one thing I will say though is that he is starting later in the cycle. In 1997, the markets still had someway to run.

I don't think you were that boy once. I'm fairly sure you at least had a pretty good idea what you were doing, whereas he seemingly has none.

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Put it this way. If you invested in the FTSE in 2000 your portfolio would have halved in value TWICE.

You'd be crazy to put serious money into the markets now. It's a deflationary time where cash is king, markets are at real extremes, but will probably go much higher. The question is, do you want to risk a 50% loss for a 20% gain?

I trade for a living. I took me around 7 years part time hobby to understand it and it's been my full time job for just over 2 now. It's literally the hardest thing in the world to do, reason being the psychological side. Working all week and losing money is tough on the facilities, now try years and years of that because no-one will show you how to do it. It's a constant battle, even when you know what you're doing, you always have to go against the herd.

If I could recommend anything, it's know what you're getting yourselves in for if you do decide to go down this road. The rewards on the other side are fantastic, but believe me you won't be getting to the end of it before at least 5 years of graft and losing money

Just added up this weeks profits £219.56. That's 8+ hours a day, 5 days a week. But I enjoy it, and live a frugal life. If it keeps me out of working for the man, I'm happy.

Of course if can be much better sometimes (and worse)

to add: those 8 hours+ a day are spent going shopping, walking the dog, watching movies. There is a lot of waiting around in this profession.

Your posts chime with me in a big way.

I too trade full time. I have been doing this full time now for two years, this is my third year. I read and reread all the classic texts, must have read all the decent TA books available and completely agree it's all about your own psychology. (I was always interested in the markets but, only now have I been able to devote to it.)

To make trading work for you, I can only make comments based on my own psychology and success rates. For me personally it's 60% psychology, 30% methodology and 10% luck.

I am fortunate though that I do not need to draw a wage from it currently, personally I want another year's experience and to increase the pot size where I can weather the inevitable down periods which will come along.

I only have ever traded from the long side and have never attempted to short from spread betting or other instrument, although I fully accept as the markets change, (which they do all the time), I may have to consider this as an option.

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"I too trade full time."

Why would you do this

You'll get creamed by volatility, systematic market manipulation and brokers fees

I completely disagree, it all depends on your time frames, your reading of the TA aspects of the charts and your understanding of the companies fundamentals, sentiments and the how the market is going to interpret the RNS as it breaks.

As to your direct question, because, to me, it's like a game, and I enjoy playing it. Plenty of really good books on trading and the psychology of trading. Personally I think unless you have a genuine passion for it, then stick with a good fund manager or a tracker fund.

But that's just me.

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Dividend yield is a cr#p measure of any shares profits as it isn't necessarily a result of profits

You are correct but I'm not seeing your point? I explicitly said yield and dividend cover if it's >1 then it's out of profit. Clearly the data is historical and past performance doesn't reflect future performance etc etc but you can get a pretty good idea of the current years performance by looking at the Investor Relations part of a companies website and RNS releases followed by a cursory glance at the balance sheet paying particular attention to liabilities, debts and amortisation. Not one of my shares selected this way in the last three years has yielded a loss. My high risk investment strategy is another story however.

Edited by longtomsilver
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I'm astonished to see there are people on this generally well informed site who are into amateur trading.

It really is the new big thing (and I mean that in a bad way).

I'm not anti-equities (most of my wonga is in shares and the divis pay me a "wage") but I don't understand how trading isn't a zero-sum game. Which is fine if you're the big money bank able to chuck zillions at technology and brains to make sure that you're not the party coming away with the -ve side of the zero sum. How does the school run mum or the corporate IT bod with an iPhone app even think he's competing?

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I'm astonished to see there are people on this generally well informed site who are into amateur trading.

It really is the new big thing (and I mean that in a bad way).

I'm not anti-equities (most of my wonga is in shares and the divis pay me a "wage") but I don't understand how trading isn't a zero-sum game. Which is fine if you're the big money bank able to chuck zillions at technology and brains to make sure that you're not the party coming away with the -ve side of the zero sum. How does the school run mum or the corporate IT bod with an iPhone app even think he's competing?

It depends on how deeply you genuinely want to go in to it would be my reply. If you want to do something properly then you have to devote the time and money to it.

Here's a guy's trading set up on youtube:

Remember 80 - 90% of retail traders will lose money, it's only when you've been through a bear will you really know if you are cut out for it, or, have the passion to keep going (and that time may be closer than we think).

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It depends on how deeply you genuinely want to go in to it would be my reply. If you want to do something properly then you have to devote the time and money to it.

Here's a guy's trading set up on youtube:

Remember 80 - 90% of retail traders will lose money, it's only when you've been through a bear will you really know if you are cut out for it, or, have the passion to keep going (and that time may be closer than we think).

But retail traders tend to go in for 'fading' and 'breakouts' which are not high probability trades. Indeed they are to some extent 'trained' to fail this way.

One of the other posters has the right idea with his 'balance areas'

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I don't trade but I've invested long term in companies I'm fairly certain will do well.

So far it's paid off but I'm planning my exit strategy as I adopt a cash is king approach.

Problem is I know my stocks inside out and trying to time an exit on a lull is hard to do when you know big news is around the corner...!

Plus thanks to my original investment I really enjoy my 10% dividend!

Theres times when I'm well aware of a 10% trading range in the stock....just too chicken to use it to my advantage

Edited by Gerinako
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I'm astonished to see there are people on this generally well informed site who are into amateur trading.

It really is the new big thing (and I mean that in a bad way).

I'm not anti-equities (most of my wonga is in shares and the divis pay me a "wage") but I don't understand how trading isn't a zero-sum game. Which is fine if you're the big money bank able to chuck zillions at technology and brains to make sure that you're not the party coming away with the -ve side of the zero sum. How does the school run mum or the corporate IT bod with an iPhone app even think he's competing?

I have similar feelings.

We are at the end, perhaps, of a bull run in equities.

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