Financial Freedom: Stock trading?

Discussion in 'Indie Related Chat' started by GBGames, Aug 10, 2004.

  1. GBGames

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    I just recently started reading "Safe Strategies for Financial Freedom" after a suggestion from Justiciar. One thing I am interested in is the stock market.

    I am really kicking myself right now for not already having an account somewhere. I read in the paper that Nvidia's stock dropped on Friday morning. It has stuck aroun 9.5/share until today where it is currently trading at 10.5/share. That's over 7% increase in only a few days! Definitely much better than what you could get at any bank over the course of a year.

    And even better, I KNOW it will go up this next quarter and this year, especially since Doom 3 came out and the introduction to the dual-GFX card configuration they own the patent on.

    Anyway, I'm looking to open an account to do stock trading. etrade.com's Power account seems nice, but I was wondering if anyone else preferred a different brokerage.

    I also do not have much to invest at this point. etrade's $1000 account minimum is still a HUGE investment for me. It is the primary reason why I haven't already gone ahead and applied. I know that fees and the like aren't the only things to look for, but my knowledge stops there.
     
  2. robleong

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    I use Ameritrade - was formerly with Datek Online but was bought over by Ameritrade. I've had no problems with Ameritrade, and would strongly recommend them - trades only cost $10.99 or thereabouts. I wouldn't suggest you invest in stocks if you cannot afford to lose the money, as, whichever way you look at it, it's still a gamble. If Osama does his thing to the US again, all the stocks will fall, even Nvidia!
     
  3. Bluecat

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    Also, and a friend gave me this advice, don't make lots of small trades.

    Even with a ten dollar fee, this reduces the percentage of your return. A lot of people recommend trading only in blocks of $5000 or more. This keeps the fees eating into your profits. Note, I am not a stock broker, financial advisor, or other economic luminary. So don't sue me!!!! ;)
     
  4. princec

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    ...buy stocks in weapons and anti-terror technology then...

    Cas :)
     
  5. svero

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    Stock trading eh? Fun game... if you're a gambler. My advice is hook up a big slot machine arm on the side of your monitor and have it make a random trade every time you pull the handle. You'll probably do about as well as if you would if you learned the details of complex put and call strategies.

    Course if you want to see how you'd do join up one of the trading sites that gives you play money to trade with but uses real stock feeds for the results. There are quite a few. It's not perfect because with your real money you tend to make different decisions. You're Less likely to sell at a loss and so on. But it may make you hesitate.
     
  6. GBGames

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    This is what keeps me from getting into it. Nvidia closed at 10.63, up 0.78 (7.92%). That's almost 8% in one day. Of course, with a $10 fee, it would have cost me $20 to buy and then sell. If I would have invested $1000, $60 ($80-$20) in profit in one day sounds nice.

    But I can't make small trades, like buying one or two shares of stock. There would be no point.

    I believe my best bet for now is to wait until I get more regular earned income before worrying about stocks. Stock investing/trading seems to require too much of a percentage of my current savings to be a good idea at this time.
     
  7. Mark Currie

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    I got lured into the stock market back when the NASDAQ was at 5000. I would spend a couple hours a day doing researching and making trades. I got out of the market when the NASDAQ bottomed at 1500. I was lucky in that I only lost about 10% of my initial investment. My real loss though was all that time. It was sort of fun, but I think I’m better suited for developing games instead of checking tickers.
     
  8. robleong

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    Or, you could combine the two - write a stock trading game!

    Or, have you considered www.sharebuilder.com ?

    Oh, and you could PM me and I'll give you a stock tip too!! :)
     
  9. Valen

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    From what I understand, the best way to make money in the stock market is to build a company and take it public. :)
     
  10. Hamumu

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    I'm with svero... if you want to learn, either find a fake trading site, or just do it yourself fake - track how much pretend money you have in each stock on a spreadsheet, and see how you do. I think you'll learn quickly that it's very very difficult to make money trading stocks! If it wasn't, it'd be free money. Remember that on the end of every great sale is the sucker who bought it... and vice versa! I've got the bulk of the vast Hamumu Fortune invested, and I used to day trade (but that was when the market was nothing but roses). Nowadays, I'm just letting it all ride in ones I feel I can trust, and I don't even check it more than once a week or so. I'm probably still down overall from the big crash. Luckily, I'm only playing with money I don't consider 'real', or I'd be in some deep dung. It's extremely fun when it goes well, but if you're going to try to rely on it, the parts when it doesn't go well will give you grey hair, and possibly send you to the poorhouse.

    It is gambling, and gambling's addictive... Damn that random reward schedule!
     
  11. Coyote

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    What's a good 'fake' trading site? I wouldn't mind getting some practice in...

    Right now, I have a portfolio that I don't DARE look at after the bloodbath of the last 4 weeks. I figure I pretty much lost all the gains I've made this year.
     
  12. Screwball

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    You will always make more money in the long run investing in blue chips then you will trying to pick the big market fluctuators. Investing in blue chips is also not a gamble.
     
  13. Mithril Studios

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    Like anything where there is a risk of losing, it's only gambling if you play with losing odds. If you come up with a system that has an edge to it, you are no longer gambling.

    I'd definately recommend doing this, and to continue paper trading until you are able to pull the trigger without hesitating.

    Two sites I know of:
    Wealth-Lab is where I have my sandbox at.
    Another is at investopedia

    You can see my wealth-lab "score" at aweissen -- not stellar by any means (yet), but my goal is learn how to consistently be a profitable trader.

    There are also other market simulators, like for commodities, or currencies, but I don't remember where they are at as those markets are beyond my expertise at the moment.

    Anthony (aka Justiciar)
     
  14. Mithril Studios

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    Interactive Brokers is the best online deep discount brokerage I know of.

    Per transaction you are looking at a minimum of $1 per trade, with a cost of $.01 per share up to 500 shares. Over 500 shares, the fee drops to $.005. However, their requirements for opening an account a bit more strict than with Scottrade or Ameritrade, for example.

    Scottrade is the next cheapest I've found, and you only need $500 to start off.

    Anthony
     
  15. Mithril Studios

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    For the most part, this is sound advice. Always take your commission and slippage costs into account when determining the profitability of a system!

    Anthony
     
  16. svero

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    The problem is that there are no "systems" that work. The only people who consistently make money in the market are company insiders, and crooks.
     
  17. Sillysoft

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    Buy and hold is a "system" that has shown itself to work quite well over the long term. It may not be as fun or exciting as active trading, but 'fun' is not a good reason for getting into the stock market.
     
  18. Captain Nemo

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    For good information about the stock market (and sometimes fun reading) look at http://www.fool.com.

    Making a living from your stock investments is not easy, believe me!
     
  19. Mithril Studios

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    Sorry Steve, but this is flat out wrong. There are plenty of people who have come up with honest systems that will consistently bring profitable returns on the market. Will they always be profitable? No. But given enough time and proper discipline they will generate profits.

    Learning the markets is very similar to learning your customers buying habits. Just like you conduct A/B tests to find out what "settings" generate the most profit, if you expect to do well with equities you need to come up with a hypothesis and test it. In my limited opinion, making money in the markets is just as difficult as taking a game from concept and bringing it to the point where it's a successful seller.

    I could give you a list of people who are well known for making quite a bit of money in the markets, but I suspect you would categorize them as being crooks or insiders, so how about someone you (somewhat) know -- Thomas Warfield.

    I'm not saying it's easy, or it's for everybody, and there certainly are crooks and insiders; but to say you're a crook if you are making money consistently off the markets...?

    Anthony
     
  20. svero

    Moderator Original Member Indie Author

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    You can buy a stock and hold it as it loses value of a number of years and the company goes bankrupt. Holding a stock long term is no guarantee of profit.
     

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