Can we quit job and invest in stocks full time?

[violet]

Hi all,

Can you pls tell me if i can quit my job and invest in stock full time?
is it possible?
provided i have 100K cash
pls give me some practical ideas if you think i can do that.
thanks
Tony

[silence]

Well, there are many people who do. I plan to at some point.


However, there are so many things to consider.


First, you would want to have a solid backtested trading plan, and strict money management. You don't want to jump in and effectively gamble your life savings away on the stock market.


Are you consistently making money as a part time trader or investor?

If not, full time obviously isn't going to work.



Good luck!

[ducati916]

Hi all,

Can you pls tell me if i can quit my job and invest in stock full time ?
is it possible ?
provided i have 100K cash
pls give me some practical ideas if you think i can do that.
thanks
Tony

Unfortunately, by simply asking the question, you have illustrated that "you" are not yet ready to do so.

When "you" are ready, the question will be redundent.

jog on
d998

[clowboy]

Unfortunately, by simply asking the question, you have illustrated that "you" are not yet ready to do so.

When "you" are ready, the question will be redundent.

jog on
d998

Ducati916,

That has got to be the best answer there is. Violet, don't take offence by the abrubt answer, if it was that easy, everyone would do it, 100k is not that hard to come by.

Start by learning to trade/invest and see where it takes you, one day it may be fulltime, or you may do it to lighten you workload elsewhere, or even just for a suplementry income.

[Snakey]

yes you can do it... just stop work and start trading with only 10% of your capital... trial and error will teach you how trade successfully. i taught myself how to trade and am now earning twice my original income with 500% better life style. Once I turned successful only then did i look at other trading techniques only to see how others have succeeded and maybe incorporate their techniques as further analysis. good luck.
P.S. highly recommend self taught method

[stevo]

I guess anything is possible!

[KIWIKARLOS]

I do envy you guys a bit it would be good to be your own boss plus lifestyle advantages etc.

The only thing that would concern me would be income security, what happens if the market slows or you get sick etc? Plus if you have mortgage repayments etc or want to get a loan you could be in real trouble if things go pear shaped.

For me I have only maybe 20K to invest with, I've started heading more towards medium term investments which are more "safe" compared to speccies simply because of the risk.
I'm interested to hear what other peoples investment strategies might be for people with small capital like myself?

[tech/a]

Kiwi

5 yrs ago I was asked the same question with regard to small capital bases and if it was possible to gain a meaningful return.

So techtrader evolved.
4 yrs later a $30k starting capital traded on Margin (we used BT Bankers trust).

The original $30k is now $390K less the $70K borrowed.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

Many have used it as a base from which to develop their own methods.I have around 16 who keep in contact with me who are enjoying similar returns to the model on Reefcap.

[MalteseBull]

I wouldn't quit the job, however work less hours (casual?) just as a security to if the market or your shares in particular happen to crash.

[nizar]

I do envy you guys a bit it would be good to be your own boss plus lifestyle advantages etc.

The only thing that would concern me would be income security, what happens if the market slows or you get sick etc? Plus if you have mortgage repayments etc or want to get a loan you could be in real trouble if things go pear shaped.

For me I have only maybe 20K to invest with, I've started heading more towards medium term investments which are more "safe" compared to speccies simply because of the risk.
I'm interested to hear what other peoples investment strategies might be for people with small capital like myself?

You need to broaden your understanding of RISK. You need NOT take on more risk if you invest in specs. In fact, specs probably increase the return side of the equation, while the risk can be kept constant.

In my opinion, those safe bluechip buy and hold, never use a stop, permabull types take on HEAPS amounts of risk.

I started with around 20k, now well up, but yes it could all be a fluke (but who cares, i enjoy the gains anyway).

But of course i remind myself daily: Dont confuse genius with bullmarket.

[Julia]

In my opinion, those safe bluechip buy and hold, never use a stop, permabull types take on HEAPS amounts of risk.


Nizar

I'd be interested in the rationale behind your suggestion that buy and hold of blue chips involves "HEAPS" of risk. Don't know why you would imagine that people who buy blue chips and who prefer to hold for the medium or long term, would never use a stop, and are "permabulls" as you put it.

Julia

[tech/a]

Julia.

Nick Radge posted this once to me.
Its a copy of the ALL ords since inception.
It CLEARLY shows why a buy and hold strategy will be longterm profitable.

From a personal view point maximising profit can be achieved by having a TRAILING stop.
Initial drawdown can be minimised by using an INITIAL stop.

However those who arent proficient in their use can have comfort in the knowledge that in 130 yrs the market has shown steady increase.

Now for those calling a 130 yr top---Ive been trading 12 yrs and EVERY year there is a panick that THIS YEAR is the top of the market.

[dhukka]

Kiwi

5 yrs ago I was asked the same question with regard to small capital bases and if it was possible to gain a meaningful return.

So techtrader evolved.
4 yrs later a $30k starting capital traded on Margin (we used BT Bankers trust).

The original $30k is now $390K less the $70K borrowed.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

Many have used it as a base from which to develop their own methods.I have around 16 who keep in contact with me who are enjoying similar returns to the model on Reefcap.

I don't want to rain on your parade tech/a - 390k from 30k in 4 years is impressive however that 4 year period coincides nicely with the current bull market cycle wouldn't you say? I will be a lot more impressed when you can show the same kind of return in a protracted bear market. Good luck

[tech/a]

I don't want to rain on your parade tech/a - 390k from 30k in 4 years is impressive however that 4 year period coincides nicely with the current bull market cycle wouldn't you say? I will be a lot more impressed when you can show the same kind of return in a protracted bear market. Good luck

Well its a long method if it didnt perform in the conditions it was designed for then it would be pretty poor.

In a bear market the system wouldnt perform as profitably as it would in ideal conditions. This particular method may show that its best not to trade it in certain market conditions,not take new trades,or any number of possibilities.

I'm always amused by those who are quick to point out PAST conditions.
like telling a property investor that you'd be more impressed with their returns on property in periods of downturn.

Reality is taking advantage of opportunity that is offered up.
This is exactly what the system has been designed for---infact all long trading systems are designed for the same thing.

Strange how the large majority of traders cant make consistant profits regardless of longterm market conditions.

[theasxgorilla]

Now for those calling a 130 yr top---Ive been trading 12 yrs and EVERY year there is a panick that THIS YEAR is the top of the market.

But this year it's different! ;)

[KIWIKARLOS]

Can you tell me more about techtrader and reefcap?

What exactly are they, modelling software?
I haven't used any software to analyse the market from what I understand it is very expensive to buy and can be tricky to use.

[GreatPig]

But if you fit a curve to the bottom of that XAO chart, as vague as it is on that picture, I think the current value would be quite a long way above the line (I would put such a line currently below 3000 as a rough estimate).

Which means plenty of opportunity to lose lots of money as a long position holder if the market is due for another return to the base line.

GP

[theasxgorilla]

Hi all,

Can you pls tell me if i can quit my job and invest in stock full time?
is it possible?
provided i have 100K cash
pls give me some practical ideas if you think i can do that.
thanks
Tony

Without going into too much detail, the ASX200 index appreciated 15% over the last 12 months. I don't see how you can "invest" full time and live of this kind of a return on $100k. You'll need to figure out a method for outperforming the market and to consider leveraging your funds.

[dhukka]

Well its a long method if it didn't perform in the conditions it was designed for then it would be pretty poor. agreed


In a bear market the system wouldnt perform as profitably as it would in ideal conditions. This particular method may show that its best not to trade it in certain market conditions,not take new trades,or any number of possibilities. OK


I'm always amused by those who are quick to point out PAST conditions. I'm always amused by those who ignore past conditions.


like telling a property investor that you'd be more impressed with their returns on property in periods of downturn. like telling your mum you came first in gym class without telling her there are only 3 people in the class and one is blind and the other has a broken leg.


Reality is taking advantage of opportunity that is offered up.
This is exactly what the system has been designed for---infact all long trading systems are designed for the same thing. obviously


Strange how the large majority of traders cant make consistant profits regardless of longterm market conditions. Hardly strange given the lack of experience and expertise of the average trader.

[dhukka]

Without going into too much detail, the ASX200 index appreciated 15% over the last 12 months. I don't see how you can "invest" full time and live of this kind of a return on $100k. You'll need to figure out a method for outperforming the market and to consider leveraging your funds.

Good point. Lets assume you quit your job with $100k and have no other sources of income. You own your own home have no debts and your expenses are food and the usual bills such as electricity, water, telephone, internet, yearly rates etc. What's the minimum you would need to sustain this relatively frugal lifestyle? 15 - 20k? Thus you need a 15 - 20% return just to preserve your initial capital. What are the chances of making this kind of return consistently over a 25 year time horizon?

[tech/a]

Without going into too much detail, the ASX200 index appreciated 15% over the last 12 months. I don't see how you can "invest" full time and live of this kind of a return on $100k. You'll need to figure out a method for outperforming the market and to consider leveraging your funds.


The whole idea is to out perform the market.
20-30% return should be relatively attainable by a half average trader.
Trade margin (Same ASX200 stocks) so your leveraged around 2:1 so thats a 60% return.

Starting capital is the key and $100K would be far to small.

What sort of business would you be able to buy for $100k---not a lot.

$300-500K would make the maths more viable.
Continued drawings to live and the tax issue of 3-50% depending on how your structured all eat into return.



I'm always amused by those who ignore past conditions.

This method was designed and tested with data from 1995-2001 market performance was less than stellar in that period.

**** Most methods designed by traders are nothing more than a set of trading rules---- This normally equates to in consistent return at best and failure at worst as traders follow blindly flawed plans.
Those who properly test will have a set of numbers which show positive expectancy and a "blueprint" of tested performance.
provided the trading in realtime stays within the blueprint---then results will be as expected. if not then you'd immediately stop trading your method---In 4 yrs all is within the Blueprint.---This is the main criteria I see missing from traders plans.

Abundant in "should be's" but no definables.


like telling your mum you came first in gym class without telling her there are only 3 people in the class and one is blind and the other has a broken leg.

Hardly---but I can see youve seen me on the parallel bars!


Hardly strange given the lack of experience and expertise of the average trader.

I really do think the answer lies in the above. ***

[Julia]

Julia.

Nick Radge posted this once to me.
Its a copy of the ALL ords since inception.
It CLEARLY shows why a buy and hold strategy will be longterm profitable.

From a personal view point maximising profit can be achieved by having a TRAILING stop.
Initial drawdown can be minimised by using an INITIAL stop.


Hello Tech,

Exactly. Thanks for posting Nick's chart.
That's why I'm curious as to the basis of Nizar's assertion.

Julia

[tech/a]

Just on Techtrader.

I get the impression that everytime I post referring to T/T that there are some who believe I'm putting it up as the system of systems.

Thats NOT the case.

A group asked the question years ago of wether it could be done ( develope a profitable system and trade it profitably by people who werent "In the Industry")---so we set out to see if it could.
Its the only system that I know of which is fully disclosed and on the nett traded live. Results have not only suprised many but are well above my own expectations.

If there are more please let me know I like to see where there maybe areas of improvement. T/T isnt perfect I know that.

Its purpose was initially to answer the question and now has taken the position as an example of what can be achieved and how to go about (In one way) of achieving profitable results using a tested system.
A basis from which others can work through.

I have tested over 200 trading systems from various sources.
I have only found a handful which return consistent profit beyond their index.
Even in this "bullmarket".

Stevo here trades one of them.

Its an easy,time saving and profitable way to trade but only one way of many.

[nioka]

And don't forget to take into account inflation, The silent destroyer.

[violet]

Hi all,
Thanks alot for your time to answer my question,
100K is not a big amount when it comes to stock, as you all said, self-study is the best way to go, i am learning this bit by bit and for the next few months, i will be reading this forum and try to learn as much as i can
I hope i can find a system where i can use to at least not to risk 100k
I put the money in the bank now and the return is 5.45% /year only.
I think we can do better than that.
Thanks for your time.
Tony

[GreatPig]

I put the money in the bank now and the return is 5.45% /year only.
I think we can do better than that.
Remember though that it's also easy to do a lot worse!

GP

[theasxgorilla]

Remember though that it's also easy to do a lot worse!

GP

I was just thinking that!

[Julia]

Hi all,
Thanks alot for your time to answer my question,
100K is not a big amount when it comes to stock, as you all said, self-study is the best way to go, i am learning this bit by bit and for the next few months, i will be reading this forum and try to learn as much as i can
I hope i can find a system where i can use to at least not to risk 100k
I put the money in the bank now and the return is 5.45% /year only.
I think we can do better than that.
Thanks for your time.
Tony
Tony,

If you've decided you're eventually going to invest/trade with the funds,
if you add a couple of $ and open an E-trade account, you will get 6% on the entire balance, i.e. they pay 6% over $100,000.

Julia

[violet]

Hi all,

6% over your capital is better than the NAB bank already!

I will definately put some money in stock, i dont have experience on stock, but i think i will gamble a big time.
cant sit on the fence any longer,
thanks alot for your time
Tony

[tech/a]

i dont have experience on stock, but i think i will gamble a big time.

I'll take a punt and say---

So that will be a BIG TIME not a LONG TIME.

[sails]

Hmmm, interesting. Topping markets always seem to bring out the newbies wanting to give up full time jobs and throw their savings at trading :eek:

I guess the big boys need plenty of new buyers so they can sell. Not saying the top is in place (unfortunately I don't have a crystal ball), but there's been a few of these types of posts lately - just interesting!

Take care out there and at least make sure you know how to use good risk management!

P.S. Tech - good to see you still posting!

[violet]

I might try blue chips first and then see what happens next.
thanks for your advise

[Porper]

Hmmm, interesting. Topping markets always seem to bring out the newbies wanting to give up full time jobs and throw their savings at trading :eek:

I guess the big boys need plenty of new buyers so they can sell. Not saying the top is in place (unfortunately I don't have a crystal ball), but there's been a few of these types of posts lately - just interesting!

Take care out there and at least make sure you know how to use good risk management!

P.S. Tech - good to see you still posting!

Good post Sails, I was going to post something similar but you beat me to it.

I can remember the crash in 87 well although I had only just left school.I remember people giving tips who had never traded or invested before, we all know what happened soon after.I am not saying we are at the top but I suppose when we are supposedly all making easy money we get a bit nervy as to what is around the corner.

[violet]

I dont believe when people say that 97% will lose money no matter what!
How can I lose money if I invest 100K cash in Woolworths and take out after 1 year, I am sure Woolworths will still be around by that time, am I right?

[markrmau]

What if you invest $100k in WOW, and it drops 20%?

It can happen. If there is an outbreak of inflation (and our labor market is VERY tight). Then cash will be a more valuable investment than shares, and consumer spending (even on essentials) will go down as well. WOW COULD drop 40%.

[tech/a]

I dont believe when people say that 97% will lose money no matter what!
How can I lose money if I invest 100K cash in Woolworths and take out after 1 year, I am sure Woolworths will still be around by that time, am I right?

As you'll find out its easier to lose capital than to gain it. Traders (over the long term) are at more risk than those investing.
But there are no guarantees---in the short term.
The use of the word gamble has got a few eyebrows raised. If you want to gamble buy $100k of lotto tickets.

[violet]

thanks for response,
this 2year chart looks OK to me

[Kauri]

thanks for response,
this 2year chart looks OK to me

What does the next two years look like???

[violet]

yes, i agree with you, chances of losing 100% capital is very slim, and they are not scammers i hope

[ice]

It's all in the timing.
A 2 year chart of BHP looks mighty impressive too....if you pick the right 2 years.


ice

[violet]

WOW last 5years performance below:
Hopefully it will be fine for the next 2 years, I will leave my 100K for the next 2 years....

[tech/a]

What does the next two years look like???

Man you crack me up!!

[nioka]

I can remember the crash in 87 well although I had only just left school.I remember people giving tips who had never traded or invested before, we all know what happened soon after.I am not saying we are at the top but I suppose when we are supposedly all making easy money we get a bit nervy as to what is around the corner.

Acting on the advice of my accountant and a financial adviser in 1987 I lost $320,000 in 3 months. It DOES happen. (They are still in business.)

[violet]

Lost more than 300K !!! that was a dssaster!
My next plan is to buy all potential shares under 1$ mark and keep them for 3 or 6 years, if i lose, i wouldnt lose alot, but if i win, that will be a large amount, do you agree ?

[ducati916]

Acting on the advice of my accountant and a financial adviser in 1987 I lost $320,000 in 3 months. It DOES happen. (They are still in business.)

In business....................... pushing up the daisies business.

jog on
d998

[vicb]

I was talking to my accountant the other day, he was telling me that at least 2 people had come to him last financial year with over 200K loss on the market for the year (borrowed money).
Buying blindly on recommendation.
Violet take 10% of your 100k and try to do something with that.
Do you homework and see a financial advisor or you could be in the same boat.
Have you ever had stocks before?
Is the 100k savings or have you been given it recently?
Best of luck and let us know how you go

[tomcat]

Lost more than 300K !!! that was a dssaster!
My next plan is to buy all potential shares under 1$ mark and keep them for 3 or 6 years, if i lose, i wouldnt lose alot, but if i win, that will be a large amount, do you agree ?

Violet...you seem to be changing your mind at every post here :eek7: I think that back to your original question your best bet is to invest your 100K and keep your day job. your talking long term investments where your money is tied up...or is this a bit of a joke thread ;)

[vicb]

The thought that this had to be a wind up did cross my mind.

[violet]

i am serious, no joke here
i actually have two plans:
1) invest into blue chips, take out every year
2) buy potential shares under 1$ leave it there for at least 3 years.

100K is my saving, that is why i am serious. dont get me wrong.

[tech/a]

You're asking a bunch of strangers on a forum what you should do with your $100K?
You've made up your mind.
Go for it!

[doctorj]

i am serious, no joke here
i actually have two plans:
1) invest into blue chips, take out every year
2) buy potential shares under 1$ leave it there for at least 3 years.

100K is my saving, that is why i am serious. dont get me wrong.
This is surely a wind up.

If not, best of luck. You will need it. Also, if this is real, what is the point of this post? You've told us what you intend to do, why not, instead start discussing how and formulating a plan. Then you will find some here will take you seriously and you can start making use of the vast amount of experience here at ASF.

[tomcat]

Hey Violet,

Understood!! Perhaps look to a broker for advice on the blue chips and then look at a lot of the threads on stocks under a dollar on ASF...some of the people here provide good insight and have done a fair bit of research.

Whether or not to keep the small caps <$1 for more than 3 years is questionably...perhaps pick an exit price you are happy with and stick with that...then take your profits and look at something else.

Good luck whatever you do, everyone has different ideas and different stocks they like whether it be a tip, emotional linkage to a company or day trading based on charts and fundamentals.

[violet]

thanks alot guys,

[GreatPig]

see a financial advisor or you could be in the same boat
I'm also tempted to say: see a financial advisor and you could be in the same boat! :D (see Nioka's comment above)

GP

[Young Gun]

One of the best most important things I have learnt about trading shares especially leveraged instruments is that the moment you ask another person / people for advice you have lost control of your trade and are not thinking logically. You need to act on your own expirience, motivation and your own accord.

Sure its ok to ask the opinion of wether you should start day trading but in the end you yourself should decide. If your already having doubts and are confused about the idea then I dont believe you can be a succesful trader. In order to be a succesful trader you need to backyourself 100 % and be prepared to loose atleast 50 % of the money that you are playing with. If your depending on the income gained from shares your exposing yourself to whole new set of pressures and stresses.

Furthermore, to be a succesful day trader you need to be discplined and have a plan. One of the biggest traps woud be day traders get into is they jump into any stock position just for the sake of entering into a position. A good disiplined day trader will let the positions come to him an act not out of necessity.

[Realist]

What a ridiculous thread!! :cool:


No you can not retire (and invest) with only $100K. Get back to work!! :sly:

[tech/a]

Furthermore, to be a succesful day trader you need to be discplined and have a plan.

Love this line whenever I see it.

So a plan eh!
How do you know the plan your trading is a profitable one.
A plan on its own maybe a plan to ruin!


Get back to work!!

Thats funny!

[Young Gun]

Love this line whenever I see it.

So a plan eh!
How do you know the plan your trading is a profitable one.
A plan on its own maybe a plan to ruin!

Obviously you would only consider day trading if you had built up enough experience and developed a plan. What I am saying is its not like you can say one day I am going to day trade.

[EEE]

Love this line whenever I see it.

So a plan eh!
How do you know the plan your trading is a profitable one.
A plan on its own maybe a plan to ruin!



Thats funny!

I would hope that common sense would prevail and that if your trading plan was continually losing money and eating into your capital base, you would take a time out and review and tweak it.

But I guess common sense is a scarce commodity these days.

Violet, there are a number of issues with your plan that I think you need to seriously address if you are genuine about pursuing this.

1.) If you plan on quitting your job and putting your money in blue-chips for a year or into speculative stocks for 2-3 years, how do you plan on putting food on the table and paying the bills on a weekly basis.

2.) In order to replace your wage (not sure what the ave wage in Aust is now, lets say 45k) you need to be making 45% p.a on your capital. This is high even for an experienced investor/trader let alone a rank beginner.

3.) Linked to the above is your starting capital. Even experienced investors/traders on this forum would be loathe to try and trade full time on such a small amount. It leaves very little margin for error and one bad trade could have you in serious trouble.

As vicb mentioned previously, take 10% of your savings and educate yourself before jumping in head first. It will save you a lot of heart ache.

EEE

[professor_frink]

In my opinion, those safe bluechip buy and hold, never use a stop, permabull types take on HEAPS amounts of risk.

:screwy: :dunno:

what a stupid comment to make. How is an investor taking an excessively large risk?
Do you think that CBA, BHP, WOW,etc aren't going to be around tomorrow?

[Realist]

:screwy: :dunno:

what a stupid comment to make. How is an investor taking an excessively large risk?
Do you think that CBA, BHP, WOW,etc aren't going to be around tomorrow?

They'll be around tomorrow, the next day and next year and they pay nice dividends too. :D

[Freddy I]

That seems a bit harsh...

I suppose someone was saying the same thing about HIH and Enron a few years ago...

[insider]

What would be cool would be travelling and getting the stock market to pay for everything.... AWESOME...

Yes, quit your job now!!!! :rolleyes:

[theasxgorilla]

What would be cool would be travelling and getting the stock market to pay for everything.... AWESOME...

The ASX pays for my trips back to Australia, albeit once a year. To travel endlessly though...ask me again in a few years, I'm working at it ;)

[professor_frink]

They'll be around tomorrow, the next day and next year and they pay nice dividends too. :D

Where you been hiding Realist????? :)
exactly. And look at the worst possible situation- we have an 87 style crash tomorrow- you'd still be profitable from the start of the bullmarket. With the added bonus of a few years of dividends on top of the cap gains, and no tax bill.

[petee]

what the %$*)@...is this really a question LOL???...ill answer this question with a question....how long is a piece of string???? haha :)

[violet]

Thanks for those who honestly response to my initial question

[wayneL]

This seems like another apples and oranges thread.

Are we talking investing or trading with 100k.

If investing... fuggettit! Come back when you have another zero on the end.

If trading... yes possible (but more capital needed if a noob), but it will be run as a business so you won't be retired.

Be aware, as pointed out 64,528,984,752,865,276,561,928,759,657,682,374,658 ,237,456 times already on these boards, that the odds are apparently stacked against you as a trader.

[nomore4s]

But I guess common sense is a scarce commodity these days.

Common sense isn't that common. :rolleyes:

[2020hindsight]

Common sense isn't that common.
common sense is not that common, it's a symptom of the times,
and/or cents are much more common, than are nickels and/or dimes
ahh shuddup - whatta lotta bull.!!!

PS no way could i live on my investment earnings lol - I mean, I like a beer every now and again ;) - and there go my profits for the week. (bludy overheads lol !!)

[constable]

Hi all,

Can you pls tell me if i can quit my job and invest in stock full time?
is it possible?
provided i have 100K cash
pls give me some practical ideas if you think i can do that.
thanks
Tony

Well being in a similar situation to this scenario i would say a definite absolutely NOT to your question !!
Unless you are some sort of genius noob trader who has familiarised himself with stock trading patterns and application of trend analysis, fractional plays, disciplined psychological control and an expert in activating stop losses etc etc etc etc you will be bent over and given a good rodgering.
Myself personally with no experience have been able to etch out an average of about 1500 per week trading with 100 to 150k in stock on any one day. HOWEVER i have taken some hits up to 20k in the beginning.
AND I DO NOT RELY ON TRADING AS MY ONLY SOURCE OF INCOME.
Otherwise the pressure of being a noob would screw me for the following:

I OVER TRADE because i am quick, too quick, to sell my winners.

I HAVE been caught out NOT activating my stop losses because i have been sucked in by fundamentals. TAS and EKA are a great example of this.

I SOMETIMES IGNORE fixed fractional % and place a move well in excess of 40k. SEN great ex.

I LISTEN to hype rather than analysis GDN (still think this is going to be money for jam).

AND I AM DOWNRIGHT GREEN when it come to t/a.

HOWEVER, i find trading can be extremely stimulating and in some instances extremely rewarding.
I feel as though i am reaching the other side in relation to my trading however its taken 4 months, (note here that even in two years from now i will still be realistically a noob in the scheme of things) and a lot of stress, some big hits (either way) and the luxury of no pressure on my immediate financial situation.
Anyrate if i had to rely on this as a sole source of income NO QUESTIONS ASKED, I SIMPLY WOULD NOT!
My last piece of advice is "easy cometh easy goeth". You will learn this too, fast!!

[2020hindsight]

here's a thought ...many here wont like it ...
but a council worker who digs just one post hole a day DOES something for Australia.
Most of us here are just gamblers (fun? pleasure?) who contribute nothing. :2twocents
Shouldn't confuse work with pleasure imho.

PS i forgot to add that it's better odds than the casino ...
AND you can play in your pyjamas ;)

(but in summary, Violet, imho, you would have to be lucky to make a living in the long term). There are a few clever quotes around here eg one that comes to mind is "the market can stay illogical longer than you can stay financiallly fluid" etc. BUT equally, there's one chance in 10 (20?) that you make a motza ;) question then is can you live with those odds? (again imho) What are the consequences of failure as they say? :2twocents

(PS one of the passwords I use to trade with includes "IOU" - lol - just a way to remind myself with every trade that I'm not a millionaire, and not to kid myself or to carry on like one ;)

[violet]

thanks alot guys.
your comments definately help.
it makes sense to me.
thank you.

[2020hindsight]

let us know how you go violet ;)
will it be a case of "ultra violet" - lets hope so -
or "violet crumbles" :(

[steven1234]

Hey Violet,

I think this is what you are after, Bankwest online saver account, pays 6.8% pa and your money is available when its needed for trading...


http://www.abetterdeal.com.au/

[violet]

Thanks alot Steven, I will check it out.

[The Red Baron]

Hey Violet,

I think this is what you are after, Bankwest online saver account, pays 6.8% pa and your money is available when its needed for trading...


http://www.abetterdeal.com.au/

Just opened one of those today, 6.8% half decent saving account for the Euro Contiki trip in August.

[Julia]

Hey Violet,

I think this is what you are after, Bankwest online saver account, pays 6.8% pa and your money is available when its needed for trading...


http://www.abetterdeal.com.au/
I checked this out a while ago. It's not available for Self Managed Super Funds which they consider a "business"!

Julia

[kennas]

I checked this out a while ago. It's not available for Self Managed Super Funds which they consider a "business"!

JuliaIsn't it good that a self managed super fund is considered a business Julia? I thought there were some tax advantages to it. Curious as I'm thinking about setting one up.

[porkpie324]

Yes you can quit your job, I did 3 years ago. I have made far more money share trading since I quit work than I did as a part time trader. Mind you it depends on your job, you may have a nice cosy number as a company director with a nice fat annual bonus, or you could have been like me 30yrs as a firefighter, it all depends on your risk tollerence with me it did'nt change much. porkpie

[Julia]

Isn't it good that a self managed super fund is considered a business Julia? I thought there were some tax advantages to it. Curious as I'm thinking about setting one up.
Yes, certainly the main advantage of super is the tax advantage. I guess I was just a bit peeved to be unable to access that term deposit rate.
However, a very minor disadvantage in the overall great benefit of a SMSF.

Julia

[stink]

:2twocents

For my mind there are two ways of looking at it.

1. Sure if you have the balls and practice sound money management using tight stops there is 50/50 you could make a consistent profit. :)

2. The main point which is why point 1 will fail. You are looking for reassurance someone to back you up and say "yeah mate great plan its fullproof". Clearly you are not educated in the markets enough to come to your own conclusion, otherwise you wouldnt be asking.

Do successful traders say on a forum " Hey guys if i do this and that do you reckon i will make money?"

My point is not intended to be offensive, i am just highlighting alot of noob traders are in such a rush to get in the market before they are ready (myself included).

Take a step back mate, the market will be there tomorrow. (thx Nick)

Cheers Stink

[porkpie324]

Yes Stink your absolutly correct I learnt my share trading sometimes the hard way (there's nothing like a loosing position it's worth a couple of seminars), but it's good now because I think of a loosing position as a necessary part of trading I've gone beyond having sleepless nights over taking the wrong positions (which I have recently done I closed my long pos in MCR & SMY and went long on KZL), the fact that I'm now in a position to travel and trade full time is a great lifestyle. porkpie

[Broadside]

Hi all,

Can you pls tell me if i can quit my job and invest in stock full time?
is it possible?
provided i have 100K cash
pls give me some practical ideas if you think i can do that.
thanks
Tony

The question and topic title suggests to me we are in the last stages of a bull market and a correction is due.

[porkpie324]

Yes Broadside thats a Jack Kennedy theory, he sold all his stocks when his shoeshine boy started recomending which stocks to buy just before the great 1929 market crash. porkpie

[Laz]

Yes, certainly the main advantage of super is the tax advantage. I guess I was just a bit peeved to be unable to access that term deposit rate.
However, a very minor disadvantage in the overall great benefit of a SMSF.

Julia
I think this is the one you want Julia. 6.35% is not too bad.

http://www.bankwest.com.au/Business/Business_Accounts/Business_TeleNet_Saver/index.aspx

[tech/a]

Can we quit job and invest in stocks full time?

If you bought a business what would you pay for one that returned say $70,000 a year.
While I know this varies I would suggest that if you were actively involved in a Business V Being a passive owner drawing a salary,that you'd have to pay around $350-$500,000.

If your going to Trade as a living you would need this sort of capital base in my view to do it comfortably.
Undercapitalisation is a business killer trading as a business is no different.

[constable]

Can we quit job and invest in stocks full time?

If you bought a business what would you pay for one that returned say $70,000 a year.
While I know this varies I would suggest that if you were actively involved in a Business V Being a passive owner drawing a salary,that you'd have to pay around $350-$500,000.

If your going to Trade as a living you would need this sort of capital base in my view to do it comfortably.
Undercapitalisation is a business killer trading as a business is no different.
Hi tech, my base needs bumping you got a spare 200k you could spot me! :D

[theasxgorilla]

Hi tech, my base needs bumping you got a spare 200k you could spot me! :D

Excessive debt can also be business killer ;)

[tech/a]

Agree with you both.

I would hope and doubt that anyone looking to buy a business of any size would be financially savvy to the point of understanding cashflow.P/L and of course Balance sheet.

Again trading Business are no different.

Constable.

Send over your P/L & Balance Sheet and I'll consider the investment.
What return are you offering? ;)

[questionall_42]

here's a thought ...many here wont like it ...
but a council worker who digs just one post hole a day DOES something for Australia.
Most of us here are just gamblers (fun? pleasure?) who contribute nothing. :2twocents
Shouldn't confuse work with pleasure imho.


2020 is spot on. I don't understand why Violet would want to be a full-time trader with $100K capital. I am probably in a similar position in life: now have about $130K in assets, doing well(ish) on the stockmarket, but I would never dream of not working again (give me another 35 years or so). Work is great for the self and the world (depending on what you do, of course).

And why haven't any of the full-time traders responded to 2020hindsight?

Good luck trading and/or investing.

[markrmau]

2020 is spot on.

I disagree totally. Speculators in the stockmarket also provide a vital service to society. Our input in determining asset values ensures capital is invested in the most efficient manner: in successful businesses which employ workers and provide goods and services.

The most successful countries (with the best health of population, best infrastructure and most easily accessible recreation) are generally those with the 'free est' financial systems.

The council worker may dig a fence post hole, but the financial market tells us if a fence was wanted in the first place.

[constable]

I disagree totally. Speculators in the stockmarket also provide a vital service to society. Our input in determining asset values ensures capital is invested in the most efficient manner: in successful businesses which employ workers and provide goods and services.

The most successful countries (with the best health of population, best infrastructure and most easily accessible recreation) are generally those with the 'free est' financial systems.

The council worker may dig a fence post hole, but the financial market tells us if a fence was wanted in the first place.
Great points!
I'd also like to add that its the speculators that hold the shares for the other people who are still making up their minds whether or not to buy them! Then of course we on sell them for a small fee!! (most of the time :) )

[Flathead Flick]

Can we quit job and invest in stocks full time?

If you bought a business what would you pay for one that returned say $70,000 a year.
While I know this varies I would suggest that if you were actively involved in a Business V Being a passive owner drawing a salary,that you'd have to pay around $350-$500,000.

If your going to Trade as a living you would need this sort of capital base in my view to do it comfortably.
Undercapitalisation is a business killer trading as a business is no different.

I'm with you here tech/a. Trading as a living means that it's your business and you need capital and yearly growth for it to make sense to continue in the business over the long term.

What's more, people have to understand is that there is an opportunity cost to trading. Can you make more doing something else full-time (either as an employee or with an alternate business), or working full-time and trading on the side? If you can, then financially you're better off. Of course there are other considerations, such as the flexibility of trading vs a full-time job.

If you do something else and trade on the side, then you're hedging yourself with an alternate career to that of the trader - if things go awry, you get bored or lose your nerve, then you've always got a Plan B.

Remember that the stockmarket doesn't always go up and we've been on a golden run for a few years now. (Of course, different story if you use derivatives or hedge, because you can win (or lose) in any market.)

FF

[Halba]

I finished uni last year majoring in finance. I decided to try full time trading/investing. More medium term trades, not too short term.

So far being doing fine especially in my first 7-8 months of trading. Of course plenty to improve! I don't know how many stocks i exited and they've doubled or tripled after my sell.

My access to capital is pretty good through my dad's business.

[justasx]

An interesting thread :)

I am just starting to explore the idea of working full-time as a day trader and so make a living from it. I have several friends who have swapped their corporate slave jobs to working from home by trading shares and are doing very well.

I currently have 16 books on my bookshelf relating to the sharemarket and options trading, and a similar number of books on my online library, all waiting to be read and learned from. So far I have read 4 books and the general conclusion is: YES you can make a living on the stockmarket starting with $100,000 (however it is best to start with no more than $10,000 to $20,000 and put the rest into a more secure interim investment).

The caveats however are many, one of which being, EDUCATE yourself about this area of investment/speculating. It is an apprenticeship and you will surely lose all of your $$ unless you know what you are doing. You can learn by reading many books, doing paper trades and gradually developing a system that will give you a positive cashflow at the end of your trading day/week/month.

It is definitely not a career for the lazy (they will lose all). But if you are willing to commit yourself to learning and then developing your own system (which will limit your loss and maximise your profits), then you will be able to make a living by trading on the sharemarket.

I cannot see it as an easy road to riches, but it can be done with patience, dedication and the use of your brains.

[noirua]

If you are very, very patient indeed, then eventually you will be able to leave that day job. Build up your pension fund so you can retire early and, of course, have a good property fully paid for; The ultimate fall back. Always very good to be called on occasionally to do part-time work at a lucrative rate, adds to confidence if they can't fully do without you.

Take care, never borrow, and remain high in cash as markets rise, mature and if you are invested in small stocks or the highly speculative sector. Always remember the Dot-Com crash; the 1987 crash and the 1973-75 crash. Believe you me, it will happen again and catch most, and all of the greedy.

[professor_frink]

....Take care, never borrow, and remain high in cash as markets rise, mature and if you are invested in small stocks or the highly speculative sector. Always remember the Dot-Com crash; the 1987 crash and the 1973-75 crash. Believe you me, it will happen again and catch most, and all of the greedy.
Didn't you hear noira-it's different this time!
China?
India?
They need lots of resources.
The old economy is the new "new economy"(or something like that :D ) Put all of your money into small cap mining shares....you can't lose!
How can the markets ever crash when China is growing so much :confused:

[Magdoran]

Now I know we’re going to have a correction of some sort! I read some crazy article from Fairfax Tradingroom that 7000 here we come… this just smacks of what you’d expect at the end of a bull run. The expectation the market is going to shoot to the stars.

It’s funny, but I remember the same kinds of comments such as “it’s different this time” and “it’s the new economy” around 1999-2000, and the belief the bull market would last for years. Don’t you know, we’re still in that bull market (except for that little detour – check out a NASDAQ chart for a graphic illustration at the time…).

What is different though is that fundamentally (and I’m no expert) there are some glaring differences… the over extension isn’t as great, so any correction would probably not be as deep or as long (suspect this is a big wave 3 going on currently).

However, if you investigate the whole raft of derivative transactions that may well be going on, there are significant exposures going on. Amaranth is just one example of this, and the rest are hidden. Despite China and India, there is a powder keg of activity tied up in a whole lot of hidden derivative trades right now that aren’t obvious, and are not on the books.

Just watch the financing boom via the Yen carry trade. If this wound out suddenly you could have a Mexican Peso effect (in reverse), but on a much wider scale.

Who knows what kind of damage this kind of thing could do. Just remember Enron and Worldcom, and imagine a widespread meltdown like Amaranth suffered… even a muted version could put a hole in the major indexes.

The point is not that I’m banging the doom and gloom drum, but that we have to be aware that there are very real possible and not that unlikely scenarios of some kind of correction, and even a crash. Most just won’t see it coming, which is more the rule than the exception.

Trader/investor beware!


Regards


Magdoran

P.S. I’m beginning to see some potential for the April 1st scenario over the February 24th one… may see some action mid March in the states too…

[Halba]

this is the silliest mkt. i bought stuff expensive and still make money even a 2yr old can make in this

[Techbuy]

this is the silliest mkt. i bought stuff expensive and still make money even a 2yr old can make in this
Easy to see you were not around in the market in 1987 when it crashed and wiped out a lot of traders.
Who know what will happen tomorrow?

[justasx]

Is it not possible though to limit one's loss due to sudden market correction to always have a 'stop' in place? Hence, the only traders that lost during the last crashes were those who had no risk limiting stop on their stocks?

I'm still a learner, so please enlighten me.

[mrWoodo]

Is it not possible though to limit one's loss due to sudden market correction to always have a 'stop' in place? Hence, the only traders that lost during the last crashes were those who had no risk limiting stop on their stocks?

I'm still a learner, so please enlighten me.

During a crash, the buy price is tumbling so fast that stops get passed by (Slippage is the term I think). Stops are only good if there's buyers within the stop range !

[noirua]

Didn't you hear noira-it's different this time!
China?
India?
They need lots of resources.
The old economy is the new "new economy"(or something like that :D ) Put all of your money into small cap mining shares....you can't lose!
How can the markets ever crash when China is growing so much :confused:

"IT's DIFFERENT THIS TIME", in my view, the most DANGEROUS words ever spoken in Stock Markets, and arguably, the most common after a long bull run. I heard these words first after the 1970's mining boom and repeated so often, most may have believed it. What happened? The market was shot to pieces, bombed and crushed and investors with it.

So big was the boom that some stocks rose one hundred fold in the 1970's. Monthly newsletters boomed and became weekly newsletter and one twice a week. Everything was resource stocks and not much else. The newsletter I had became monthly, after the crash, and resource stocks disappeared from its content.

[constable]

"IT's DIFFERENT THIS TIME", in my view, the most DANGEROUS words ever spoken in Stock Markets, and arguably, the most common after a long bull run. I heard these word first after the 1970's mining boom and repeated so often, most may have believed it. What happened? The market was shot to pieces, bombed and crushed and investors with it.
What goes up must come down! I hope someone rings the bell at the top!! :D

[Magdoran]

What goes up must come down! I hope someone rings the bell at the top!! :D

"Ring, RING!"

[noirua]

"Ring, RING!"

Unfortunately, like the little bell that rings at the bottom of a bear market, the end of the bull market will be signalled by just one "Ding" and few will hear it, and again, unfortunately, most will need a stick of dynamite to make them sell, at that point.

[nizar]

Unfortunately, like the little bell that rings at the bottom of a bear market, the end of the bull market will be signalled by just one "Ding" and few will hear it, and again, unfortunately, most will need a stick of dynamite to make them sell, at that point.

Instead of talking about all this doom and gloom, why dont you just enjoy the good times while they are here?

Thats my own approach anyway. We all know its gonna end, so enjoy it while it lasts.

[Noskcid]

Umm but if everyone does that = no one works hence how will the share prices go up, when company employees buys their shares instead of work!! LOL!!!!

[Halba]

hmmm fair points yes the industrials sector looks expensive!

[theasxgorilla]

Instead of talking about all this doom and gloom, why dont you just enjoy the good times while they are here?

Thats my own approach anyway. We all know its gonna end, so enjoy it while it lasts.

Couldn't agree more. And thru this approach, running with the trend while it is in place, you'll make so much more money and hopefully prop yourself up and be happier when the "ding" comes and the music stops.

[Magdoran]

You know, I have seen some tops and falls in my time in the market. I remember people bleating during 1999 about how it was never going to end, and that this was the “new” economy, and that we’d practically abolished the downside of market cycles.

I remember the effects of the pull back in 1994.

I clearly remember the carnage of 1987, where people lost their savings, houses, jobs, and some even (horror of horrors) took their own lives.

I was even around and cognisant of the oil shocks through the 70s, and had some inkling of what was going on in the pull back in 1973 (although it was only many years later that I understood to some extent what was going on).

I remember the unbridled optimism during these times, which was often at its peak right up into the tops.

I wonder how many people have actually studied historical tops (technically)? I mean really studied them in depth?

Sure if you are a random walk theorist, then you’d believe that there is no pattern, hence trying to study trends would be an exercise in futility, and you’d see technical analysts as being involved in self deception seeing something that wasn’t there.

This view may well be true, but it is a view I don’t believe to be correct. If you believe this is so, then nothing I say will be of benefit. However, if you accept that there are tradeable patterns, and there are ways to determine probabilities that can be utilised, then maybe this perspective may be of some interest.

As for the idea of sitting back and “enjoying the good times”, many did this in 1929, 1973, 1987, and 2000 for instance. And they will again this time around. They will do exactly as those in the past did. Ignore the cycles of trend.

It is precisely the mentality that a bull or bear market will last forever that leads to the preconditions for a strong move against a major trend when it ends. Just go to a chart and study the bull campaigns that I listed above. Blank out the right hand side of the chart and gradually move through the trend to completion, and examine the patterns (this actually will be coloured by both your innate capacity and by your training and experience and style of analysis).

The art of a good trader in my view is to be prepared for any eventuality, and develop the capacity to recognise when the trend is at risk of competing, in order to reduce risk and also to potentially look to benefit from a trend change.

I’m not a doom and gloom merchant, and I don’t have a crystal ball either. What I do have is the capacity to analyse the patterns of trend, and to imagine the future, and build scenarios and assign probabilities to those possible outcomes. I’m looking for an opportunity to profit substantially from the short side when this market terminates. Knowing the patterns which precede this kind of event, and positioning correctly is the key to taking advantage of this kind of move.

That means taking action when your methods allow you to perceive a pattern that has a probability of being terminal, and determining the most appropriate strategy. Otherwise there is the potential for the blind leading the blind like lemmings over the cliff edge.

I have commented on various threads recently about the potential danger signs I see technically to this trend, if not Friday 23, then 10-14 March, and 01 April could be danger points. I have talked at length on various threads ranking how various scenarios may pan out, like a quick “ABC” (or McLaren “two thrust” pattern) ranging up to a full blown correction.

Sure, the market is so bullish right now it could easily move on up for a while. But study a few charts, and you’ll see that some stocks are looking toppy. My hunch is that we are heading for (or have reached) some kind of wave 3 top, will have a pull back, and then continue bullishly in 2008. Bull markets tend to correct to set up for the next leg, and some of these pull backs can (look at May last year) last for a few months…

Because I don’t have a crystal ball, and don’t know what the future will be, any of my forecasts can be totally wrong (as can anyone’s). The key point I am making here is recognising when the potential risk is high, and taking action, or at least setting up strategies to respond to the market as the price action pans out…

The art of bear plays is knowing when to take profits, especially for all the times it isn’t a major top but a quick pull back. But you can still profit (often better than going long) from the short side even when the counter trends are quick, because they are usually deeper than bullish moves (with the exception of bullish blow off moves). This is especially true when using options correctly (especially if you understand volatility in options).

I see a good probability of a pull back in a lot of stocks in the not too distant future. If it’s a quick pull back, this can still offer great opportunities, both shorting, then entering long if a bullish continuation is signalled. If there is a big correction, those on the short side will clean up very nicely.

Preparation and flexibility of mind is everything. Forewarned is forearmed.


Regards


Magdoran

P.S. Sceptical? Just have a look at my various posts from well before where I identified Feb 24 as a significant date (Zinc thread, trading the SPI Gann thread, ZFX thread -where I gave 6025 as the target for the 23rd Feb, and many others) Mag.

[canaussieuck]

Interesting post Mag...add to this the 'toppiness' of the Shanghai markets, the US markets (although not a spectacular), Japanese, India...the staggering level of debt around the world, and like i've mentioned its a perfect storm brewing. I'm watching as much as i can as closely as i can right now...it will only take one straw to start things off i reckon.

Cheers,

[Magdoran]

Interesting post Mag...add to this the 'toppiness' of the Shanghai markets, the US markets (although not a spectacular), Japanese, India...the staggering level of debt around the world, and like i've mentioned its a perfect storm brewing. I'm watching as much as i can as closely as i can right now...it will only take one straw to start things off i reckon.

Cheers,Hello canaussieuck,


I agree, it may be that one proverbial straw that sets it all off… and it is well worth being vigilant right now…

Actually I’m divided about the US patterns, they’re either accumulating for a blow off top, or distributing in a kind of ending diagonal (wavepicker has done a lot of work on this). I’ve been watching the NASDAQ with great interest (not to mention the DOW, and the S&P 500), and thought this was about to take off, but not so sure now. The struggling pattern I think has the potential to unleash a fast move.

I don’t know if this will be an almost vertical bullish blow off move, or a strong ending diagonal sharp corrective move, but this sort of pattern when it resolves tends to be strong.

I see the same kind of pattern in the DAX, CAC and FTSE too…

Japan though is different, because of the depressed Yen, whether that market booms, or the Yen adjusts back up, in both cases Japanese stocks may maintain their value if there is some kind of bearish pull back, but there’s no guarantee.


Regards


Magdoran

P.S. Interestingly from a derivative perspective, (especially for those who have read Frank Partnoy) there could be significant (Amaranth style) exposures to complex derivatives that are not on many companies books that are hidden in a labyrinth of accounting smokescreens.

It’s too hard for me to even attempt to estimate the possible effects of a melt down in this area, but I can imagine the house of cards that has been built up over the past decade. The last big bangs were Enron and Worldcom, and the preconditions for this kind of collapse haven’t really been addressed for political reasons.

I’m not sure if this is at issue now, or will be in the future, but something to be aware of. Mag

[ducati916]

Mag's

What's happening baby?
Actually I've been looking at the derivative side etc in my blog for about the last two weeks odd....check it out and say hi.

jog on
d998

[Magdoran]

Mag's

What's happening baby?
Actually I've been looking at the derivative side etc in my blog for about the last two weeks odd....check it out and say hi.

jog on
d998Hey Duc!


How have you been in sunny NZ??? Sure, I’ll check out your blog, I do pop in there from time to time and have a browse…

Always interesting to see what you’re up to.

I’ve been working round the clock on charts and derivative strategies, made a few breakthroughs in both areas… hence too busy to post much… (but obviously still find some time! Ha!) – been working with some gifted minds recently.

Hey, have you been researching collateralised bond/mortgage obligations (CBOs and CMOs) in your travels? This is a freaky area of structured derivatives. Still trying to understand the mechanics, they’re quite involved, but I’m sure your methodical mind would find it a breeze!


Regards,


Mag.

[tech/a]

Can we quit job and invest in stocks full time?

Reading through this thread the original question seems lost and the answer seem complicated.

The answer is YES

Here is WHY not HOW

(1) The advent of CFD's make shorting of many stocks possible.
(2) The advent of CFD's make leverage easy.(3:1 is safe and sufficient).
(3) A capital base of $200,000 would be comfortable ( No more than a standard business start up cost or capital.
(4) A return of 30% on Turnover (No more than a standard profitable business)

$200,000 x 3:1 leverage x 30% = $180,000/year.

Like any business work out the how.

[Seneca60BC]

Hey Tech

I like ur answer.
Cheers

[violet]

Thanks tech/a and all who directly responded to my initial question.

I know for a beginner like myself it will take a long time to get there.

[ducati916]

Hey Duc!


How have you been in sunny NZ??? Sure, I’ll check out your blog, I do pop in there from time to time and have a browse…

Always interesting to see what you’re up to.

I’ve been working round the clock on charts and derivative strategies, made a few breakthroughs in both areas… hence too busy to post much… (but obviously still find some time! Ha!) – been working with some gifted minds recently.

Hey, have you been researching collateralised bond/mortgage obligations (CBOs and CMOs) in your travels? This is a freaky area of structured derivatives. Still trying to understand the mechanics, they’re quite involved, but I’m sure your methodical mind would find it a breeze!


Regards,


Mag.

Mag's baby,

Yes I have, have been interested in Bank's generally, sub-prime, and the CMO's + CDO's [have a few thoughts on the blog]

I note Greenspan called a US recession by years end in a lecture he gave in HK over the weekend.

There's also been another sub-prime implosion [NFI] in the US
This market is falling apart at the seams.

jog on
d998

[wayneL]

Mag's baby,

Yes I have, have been interested in Bank's generally, sub-prime, and the CMO's + CDO's [have a few thoughts on the blog]

I note Greenspan called a US recession by years end in a lecture he gave in HK over the weekend.

There's also been another sub-prime implosion [NFI] in the US
This market is falling apart at the seams.

jog on
d998

Nice work!... hope you don't mind me linking to your posts elsewhere in cyberspace.

Cheers

[ducati916]

enzo baby

Absolutely, feel free.


jog on
d998

[Magdoran]

I really didn’t see the need to say much on this thread directly to Tony/violet. Most of the poster’s aren’t full time traders, but despite this the undercurrent was cautionary as it should be. This is the hardest game in town, and requires considerable effort and ability to succeed.

However, there was a subtle message in my posts… Who was listening? violet, if you didn’t get my subtle message on this thread, you are just not ready… Just read the Duc’s first post on this thread (number 3). It says it all. Also, Margaret/Sails’ comment about tops bringing out the “newbies” is prophetic.

Why not consider what I was conveying in my last posts. Did you get my “subtle message” about trading? Think about it this way. Who in the posts on this thread are full time traders/investors? What methods do the full time players use, and how do they operate? Vicb made an excellent comment suggesting taking a minority portion first to see how you go.

If you are really considering going full time into trading, who would you ask? - a part timer/hobbyist, or someone who lives and dies “by the sword”? I’m a full time trader (mainly trade the swings, bit with some long term strategies too), others use long term bullish methods, and a few here do trade the swings too.

But it seems to me you already have an approach loosely mapped out – by a few blue chips and hope. This is not sufficient in my opinion to beat the odds. You need to be across a host of disciplines. If the market does correct, can you trade short effectively? If the market does correct, and then goes sideways, can you trade non directional markets effectively? If you are relying on a bull market, you have left your run a little late when there is real risk this year of a significant pull back or consolidation.

If you are holding straight unhedged shares, the potential exposure to a significant fall is considerable. Also, any comment about using CFDs without sufficient derivative knowledge and experience is also inviting considerable risk.

How is your derivative knowledge? If you can only trade shares and have no derivative knowledge, this is a significant set back. Trading on margin is very exposed if you get it wrong (particularly if there’s a significant sharp move against you), let alone CFDs which also require a full knowledge of leverage and margins to trade effectively (let alone their exposure and the pit falls of exposure and the need for having deep enough pockets). So I fully agree with Wayne here too.

Me, I prefer options, but I also study all derivatives both exchange based and OTC instruments, including structured financial instruments. But that is my personal choice. You need to find out sufficient information to make up your own mind. Many of the posters here giving advice are not well versed in derivatives. Go to the derivative area and start looking at what is required. This is a significant discipline in itself.

Do you have sufficient capital? What happens in the lean/negative months? Can you survive? Is $100,000 sufficient? If you’re just trading shares I really doubt that is enough without leverage, unless you have very good small cap trading skills (and lots of luck).

Do you have a workable business plan? You need to develop a series of well structured highly organised areas of knowledge, and be able to develop and modify effective plans and follow these. You are contemplating setting up a business, and this requires all the required boxes have a tick. – Analysis, psychology, system, strategy. And then all these have sub categories, they all need a tick too. This is the hardest game in town, and if you are not fully prepared, you are unlikely to succeed (at least the first time).

Have you ensured you are fully resourced and equipped? This means more than having a good PC network and internet access.

This is about being psychologically prepared for probably the most gruelling pressure you will ever be confronted with. Have you done enough work on your own psychology yet, let alone understanding market psychology?

This is about having an edge – be it technical analysis, fundamental analysis, specialist knowledge of a sector, economic segment or company (can be specialising in a future for instance, or a currency, or an index, or a stock, or a sector of stock – you get the picture). Maybe you trade a pattern (e.g. Elliott Wave analysis). But you need a way as Douglas says to “be the casino”.

You need to cover all contingencies, office set up, insurance, taxation, essentially you are running a business…

Do you get what we’re talking about re the threat to the bull market regarding structured derivatives? Do you understand the Yen carry trade for instance and what it means to the world economy?

I’m a full timer, and I tell you, it’s a 24x7 challenge. Are you prepared to put in 100%? Are you prepared to learn everything you can? Are you prepared to invest years into evolving and developing effective approaches?

As you can see, in my view Tony you need at least 3-4 years concerted effort to even think about going full time. Learn at least 1 analysis discipline and become a master in it, learn about derivatives and become a master in that, learn about risk management and become a master in that, fully research and develop the right mindset (reads psychology) and become a master at that too. In fact, you will really need to become proficient in all areas covered on this thread that are relevant to your success.

Got your foot on the start line? Ready, set….


Regards


Magdoran

[theasxgorilla]

Terrific post Mags.

I notice you only have 500-odd posts but if there were WPP index (words per post) I suspect you'd be top 3 on the forum ;)

[Magdoran]

Terrific post Mags.

I notice you only have 500-odd posts but if there were WPP index (words per post) I suspect you'd be top 3 on the forum ;)Thanks theasxgorilla,


Thank-you for your kind words…

If I can only reach 1 person and make a positive difference to their life via posting, then it’s all worthwhile.

There were times when others have helped me along the way, so I try to “pay it back/forward”…

So, you’ve read (all) my posts? Now that’s scary. Just imagine, I had to write them! (There are other notable posters here too like Wayne, Margaret, Duc, tech, and I bet they had fun typing too!!!).



Regards


Magdoran

[Magdoran]

Wayne you goose!

I just noticed your new epitaph! You Grizzly bear you! So is that “count bear” in the early hours of the morning?


Mag

[violet]

Hi Magdoran ,

Thank you very much for your time and effort to write such a comprehensive post which required me years to understand them all. !!!
you're right, it needs a lot of time to be a full time trader,
i need to print your post a read it again and again...
Thanks alot for your kind help.
i am sure your post will help others too.
cheers
Tony/Sydney

[Magdoran]

Interesting post Mag...add to this the 'toppiness' of the Shanghai markets, the US markets (although not a spectacular), Japanese, India...the staggering level of debt around the world, and like i've mentioned its a perfect storm brewing. I'm watching as much as i can as closely as i can right now...it will only take one straw to start things off i reckon.

Cheers,You were spot on canaussieuck,


It was the Shanghai markets that were the trigger for this corrective event. Good call!


Regards


Magdoran

[Magdoran]

Hi Magdoran ,

Thank you very much for your time and effort to write such a comprehensive post which required me years to understand them all. !!!
you're right, it needs a lot of time to be a full time trader,
i need to print your post a read it again and again...
Thanks alot for your kind help.
i am sure your post will help others too.
cheers
Tony/SydneyGlad it helped, best of luck!

[canaussieuck]

You were spot on canaussieuck,


It was the Shanghai markets that were the trigger for this corrective event. Good call!


Regards


Magdoran

Thanks Mag....now, wheres that bottom?

If it wasn't for Nick's teachings i wouldn't have even seen it coming. VSA has taught me to pay attention to the volume. To me, Friday was a giveaway. I'll try to post a chart later.

Cheers,

[Magdoran]

Thanks Mag....now, wheres that bottom?

If it wasn't for Nick's teachings i wouldn't have even seen it coming. VSA has taught me to pay attention to the volume. To me, Friday was a giveaway. I'll try to post a chart later.

Cheers,Yup, canaussieuck,


Good T/A skills will help with that.

Working on the pattern now for the bear campaign.

I suspect a 1-4 day bullish counter trend, then…


Should be an interesting ride.


Mag

[canaussieuck]

Yup, canaussieuck,


Good T/A skills will help with that.

Working on the pattern now for the bear campaign.

I suspect a 1-4 day bullish counter trend, then…


Should be an interesting ride.


Mag

Not sure this is the right thread Mag, anyway heres what i saw. After this i was watching everything to see where the spark would come from.

For me to pick the bottom, i'll need to see some accumulation, like a selling climax. It may be difficult though. I'll be keeping an eye on your posts too!

[So_Cynical]

Some very smart posts on the first couple of pages of this pre GFC crash thread from early 2007.



You need to broaden your understanding of RISK. You need NOT take on more risk if you invest in specs. In fact, specs probably increase the return side of the equation, while the risk can be kept constant.

In my opinion, those safe bluechip buy and hold, never use a stop, permabull types take on HEAPS amounts of risk.

But of course i remind myself daily: Dont confuse genius with bullmarket.


Nizar

I'd be interested in the rationale behind your suggestion that buy and hold of blue chips involves "HEAPS" of risk. Don't know why you would imagine that people who buy blue chips and who prefer to hold for the medium or long term, would never use a stop, and are "permabulls" as you put it.

Julia


Hmmm, interesting. Topping markets always seem to bring out the newbies wanting to give up full time jobs and throw their savings at trading :eek:

I guess the big boys need plenty of new buyers so they can sell. Not saying the top is in place (unfortunately I don't have a crystal ball), but there's been a few of these types of posts lately - just interesting!

[poverty]

Thanks for digging this up So_C very interesting read!

[goponcho]

quick question, has the site reefcap relocated?