Surely, it can't be this easy?!

Nonchalant · 11 September 2011

Hey all

Just recently invested some funds in blue chip stocks, major 4 banks, BHP & the like with the express purpose of holding them long term. Watched them oscillate between minor losses and minor gains. Pretty uninspiring experience. So in my infinite wisdom (?) I thought I'd try this "trading" thing. Admittedly, I am apprehensive about the looming hit descending upon my stocks next week, and possibly beyond. My situation/ philosophy is follows. I haven't financed my initial foray into the stock market. I don't require the funds for incurred expenses for my day to day lifestyle. Consequently, I figured I'll leave the stocks as is, if they take a hit, they take a hit. I'll receive my dividends twice yearly and whatever capital loss on paper occurs, will be recouped long term.

Getting back to my trading experience, I made a further purchase of one of the aforementioned stocks as I wanted to "participate" and ultimately have a measure of control over the profitability of my shares. Bought X stock at X price, shares went up approx 0.25 cents, sold them and made close enough to 1K. Thanks for coming! Surely it can't be this easy! I'm considering doing this full- time Just kidding. Question is, what sort of "run" have members had? Is this typical? The saying of "if it seems too good to be true, it isn't" is ringing in my head.

Tysonboss1 · 11 September 2011

Re: Surely, it can't be this easy!

No it is not that easy,

The market will test you, and if your principles are not sound you will lose.

tech/a · 11 September 2011

Yes it is pretty easy.
Total profit needs only to exceed total losses.
See how that goes over the next 50 trades.

Oh
A paper loss is a real loss--- it's what you can liquidate your holdings at NOW.
Just as aaper profit is a very real profit!

Nonchalant · 11 September 2011

tech/a said:
Yes it is pretty easy.
Total profit needs only to exceed total losses.
See how that goes over the next 50 trades.

Oh
A paper loss is a real loss--- it's what you can liquidate your holdings at NOW.
Just as aaper profit is a very real profit!

Yup, thread title needs to taken in jest. Was meant to be more of an observation/comment as well as a genuine interest to read others experience in real day to day trading.

Insofar as to paper losses. Each persons circumstance will dictate whether the losses are real or on paper. As you're well aware, the loss is only realised if you sell. Only other circumstance I can think where a paper loss would be pertinent is if you're looking to use the shares as collateral.

Yep, I'm old enough and wise enough to know that you cannot make every post a winner and concede that not all trades will end up in my favour. Doesn't stop us from
trying thou!

Good luck everyone with the trading day tomorrow.

Nonchalant

So_Cynical · 11 September 2011

Nonchalant said:
Getting back to my trading experience, I made a further purchase of one of the aforementioned stocks as I wanted to "participate" and ultimately have a measure of control over the profitability of my shares. Bought X stock at X price, shares went up approx 0.25 cents, sold them and made close enough to 1K. Thanks for coming! Surely it can't be this easy! I'm considering doing this full- time Just kidding. Question is, what sort of "run" have members had? Is this typical? The saying of "if it seems too good to be true, it isn't" is ringing in my head.

Yes it is that easy, however the market is a 2 edged sword and its not consistently that easy....like i always say if you put alot of though into buying good shares cheap, have an accumulation strategy if they get cheaper and are prepared to wait for the market to re-price your shares to your advantage, then "big picture/long term" it really is easy to make good money following a few simple (reverse trend following) rules.

Muschu · 11 September 2011

Nonchalant said:
Hey all

Just recently invested some funds in blue chip stocks, major 4 banks, BHP & the like with the express purpose of holding them long term. Watched them oscillate between minor losses and minor gains. Pretty uninspiring experience. So in my infinite wisdom (?) I thought I'd try this "trading" thing. Admittedly, I am apprehensive about the looming hit descending upon my stocks next week, and possibly beyond. My situation/ philosophy is follows. I haven't financed my initial foray into the stock market. I don't require the funds for incurred expenses for my day to day lifestyle. Consequently, I figured I'll leave the stocks as is, if they take a hit, they take a hit. I'll receive my dividends twice yearly and whatever capital loss on paper occurs, will be recouped long term.

Getting back to my trading experience, I made a further purchase of one of the aforementioned stocks as I wanted to "participate" and ultimately have a measure of control over the profitability of my shares. Bought X stock at X price, shares went up approx 0.25 cents, sold them and made close enough to 1K. Thanks for coming! Surely it can't be this easy! I'm considering doing this full- time Just kidding. Question is, what sort of "run" have members had? Is this typical? The saying of "if it seems too good to be true, it isn't" is ringing in my head.

Hi NC and welcome

I suspect you already know the answer to your question. ASF is a "forum" of contributors and you'll get a variety of responses of course. Many will naturally advocate their own strategy.

For me there are many variables. So you might want to backtrack the other posts of some really good people as to their risk profile, "age" [as in retired versus heading that way versus starting out], and investment platform [technical, fundamental, balanced, ...].

But, at the end of the day [as you know], the strategy and decisions are your own... and you can change them as you wish.

My only recommendation, particularly now, is to tread carefully.

Regards

Rick

Gringotts Bank · 12 September 2011

The stock market is not inherently easy or hard. You make it easy/hard by your attitude (ie. dominant thoughts). If it's easy for you now, maintain the attitude and you will maintain your profits. If you let it drop, so go your profits.

Coming on here and asking if others find it easy/hard is already showing that you have doubts, or that you want or need your attitude reinforced by someone else. You have to reinforce your own attitude daily. If you can't do that, you have the option of paying someone to reinforce a positive attitude, by subscribing to a newsletter. To be effective, the newsletter must use very persuasive language. It must be unrelenting in its certainty and positivity. Something like 'Diggers and Drillers' or 'Slipstream Trader' fits the bill here. There's nothing inherently superior about the way they research their companies, but their attitude is quite encouraging, and that's what you're paying for.

Nonchalant · 12 September 2011

Hey all

Thanks for the sage advice.

So Cynical, that's a nice set of stats!

Gringotts, nah, don't need affirmation. As stated, the thread title needs to be taken in jest.

Boy, what a tumultuous day!!! You certainly require nerves of steel and it's definitely not for the fainthearted.

skc · 12 September 2011

Gringotts Bank said:
The stock market is not inherently easy or hard. You make it easy/hard by your attitude (ie. dominant thoughts). If it's easy for you now, maintain the attitude and you will maintain your profits. If you let it drop, so go your profits.

Your language seems to suggest that positive attitude is necessary and sufficient for maintaining profits!?

Or have I mis-interpreted that?

Gringotts Bank · 12 September 2011

skc, yeh I think it might be sufficient, strange as that might sound. I don't expect anyone to buy this, because the psychology of trading is a bit of a taboo subject here on ASF.

I base my claim on quite a number of experiments with my own trading, and observations of friends and family members with their trading. I have looked at the influence of positive attitude and found it to be far more influential in determining profit than any other factor (including method or system, time in the market, experience, or phases of the market). I also have a small but compelling bit of evidence to suggest that no knowledge of the market at all is necessary at all.

skc · 12 September 2011

Gringotts Bank said:
skc, yeh I think it might be sufficient, strange as that might sound. I don't expect anyone to buy this, because the psychology of trading is a bit of a taboo subject here on ASF.

I base my claim on quite a number of experiments with my own trading, and observations of friends and family members with their trading. I have looked at the influence of positive attitude and found it to be far more influential in determining profit than any other factor (including method or system, time in the market, experience, or phases of the market). I also have a small but compelling bit of evidence to suggest that no knowledge of the market at all is necessary at all.

I think it's ok for one to believe that positive attitude is far more influential than other factors (even though I disagree). But that doesn't make it sufficient.

All successful traders have the right psychology, but not all traders with the right psychology are successful traders.

It's a huge leap of logic here. Do share your compelling evidence if you don't mind.

Julia · 12 September 2011

skc said:
It's a huge leap of logic here. Do share your compelling evidence if you don't mind.

I'm also fascinated to understand how being positive about an outcome in the market can necessarily bring success.
It rather reminds me of that awful book "The Secret" which I didn't read but enjoyed the satire The Chasers did of it where they 'envisaged that something they wanted became theirs". It was very funny.

Gringotts Bank · 12 September 2011

I came across a person who 1. had amazing general confidence and self-esteem and 2. knew nothing about the market. I thought he'd be a perfect subject for my continuing experiments, so I asked if he'd mind taking part. I gave him my laptop, and after a little explanation about candle charts, told him to scroll through a list of sub $1 stock and asked him to pick the next day's top gainer. First day he was successful in picking the highest gainer on the ASX for the day (and no, it wasn't one with a huge exponential run up). The following day he had picked the 7th top gainer. When i told him what had happened he was not at all interested, and I haven't seen him since.

On its own, this story means nothing. But in conjunction with all the other little stories and observations I have made, adds up to quite a strong argument. Such experiments are very easy to conduct yourself, if anyone wishes to do the work. But you must be able to assess a person properly - tricky for some, easy for me!

If you want to try something even more random, go to a fundraiser function where they are selling raffle tickets. Now if you can be bothered identify the people who are having the most fun. I've done this twice and correctly identified those who would later win. You know how you hear people say "I never win raffles?". Well, there are also people who always win raffles.

Now you can all laugh. But are you laughing all the way to the bank?

Julia · 12 September 2011

Gringotts Bank said:
I came across a person who 1. had amazing general confidence and self-esteem and 2. knew nothing about the market. I thought he'd be a perfect subject for my continuing experiments, so I asked if he'd mind taking part. I gave him my laptop, and after a little explanation about candle charts, told him to scroll through a list of sub $1 stock and asked him to pick the next day's top gainer. First day he was successful in picking the highest gainer on the ASX for the day (and no, it wasn't one with a huge exponential run up). The following day he had picked the 7th top gainer. When i told him what had happened he was not at all interested, and I haven't seen him since.

On its own, this story means nothing. But in conjunction with all the other little stories and observations I have made, adds up to quite a strong argument. Such experiments are very easy to conduct yourself, if anyone wishes to do the work. But you must be able to assess a person properly - tricky for some, easy for me!

Pretty easy to read a philosophy into random anecdotal events if you are determined to so do.

If you want to try something even more random, go to a fundraiser function where they are selling raffle tickets. Now if you can be bothered identify the people who are having the most fun. I've done this twice and correctly identified those who would later win. You know how you hear people say "I never win raffles?". Well, there are also people who always win raffles.

Is it just remotely possible that those people 'having the most fun' are those who have purchased the most raffle tickets? I don't imagine you know this, so cannot know whether those people had a greater than average chance because they were holding a big bunch of tickets.

These esoteric hypotheses are a bit of fun, GB, but you haven't at all justified the validity of the suggestion that a positive approach to a stock will bring success.

If, on the other hand, you carefully select a stock on either technical or fundamental basis, and then when you place the order, indulge yourself by thinking "I positively believe I will make money from this stock", carefully keeping it open ended so as not to be more likely to be disappointed, then probably there's nothing wrong with that.

tech/a · 12 September 2011

Amazing.
I find winners of raffles and competitions buy more tickets or enter more times.
I've actually got quite a few friends who buy book after book year after year on all sorts of mental gymnastics.

What I've found is these guys ALL keep looking for direction from positive affirmations to listening to positive thinking tapes as they sleep.

They ALL have one thing in common.
They are GUNNAS they're GUNNA succeed in everything they do--- just you wait and see--- and wait and wait and wait.

Gringotts Bank · 12 September 2011

When it comes to making money, I have looked at every angle. I don't rule things out because they sound odd. I test them. My tests are as rigorous and 'scientific' as I can make them, taking every care to remove extraneous variables where possible. I'm not fluffing around. I document these things and I think them over and over for potential 'holes'.

Having done an enormous amount of work on traditional methods of stock picking, I would prefer it if these traditional methods were more influential in determining success. But my work says that's not true.

It ain't fun or esoteric for me Julia. I want to know what works.

And tech, there's no need for books, tapes, lectures, seminars or any of that. Mostly such things are counterproductive, IN MY EXPERIENCE.

Muschu · 12 September 2011

Any psychics here?

[Disclosure: I'm not one]

skc · 12 September 2011

Julia said:
It rather reminds me of that awful book "The Secret" which I didn't read but enjoyed the satire The Chasers did of it where they 'envisaged that something they wanted became theirs". It was very funny.

Exactly what I had in mind.

Gringotts Bank said:
When it comes to making money, I have looked at every angle. I don't rule things out because they sound odd. I test them. My tests are as rigorous and 'scientific' as I can make them, taking every care to remove extraneous variables where possible. I'm not fluffing around. I document these things and I think them over and over for potential 'holes'.

Having done an enormous amount of work on traditional methods of stock picking, I would prefer it if these traditional methods were more influential in determining success. But my work says that's not true.

Thanks for your response GB. It's hard to believe, not because I don't have an open mind (or that trading pyschology is taboo), but because it is completely irrational.

I don't know how much work you think you've put into your research... but no matter how much work you have done the best you can prove is that a positive attitude is "the most important" factor. You will never be able to prove, nor it will ever be true, that positive attitude is sufficient. You are still making a logical leap from what you've said.

So what happens if person A with a positive attitude longs a stock and person B with an equally positive attitude shorts the same stock?

The only argument one can come up with is that the loser did not have enough positive attitude.... then the whole reasoning become circular...

- Positive attitude is sufficient for trading success
- If a person with a positive attitude did not succeed, they were not positive enough!

LostMyShirt · 12 September 2011

I think Gb has loosely defined his theory here.

From what I can gather, and correct me if I'm wrong; do you mean to say that two individuals on equal grounds of knowledge, one positive (in what-ever sense positivity is percieved), another negative (percieved) would have the positive individual closing out more winning trades than the negative? So in reality, positivity can help bring about, as a key point indicator, success?

It certainly does remind me of secret quantum mechanistic Depak Chopra type theories about consciousness and its effect on reality.

GB; speaking from a purely philosophical basis - if you have closed out more winners than losers, and are ahead of the game, then I personally would attribute to the information and education you have aquiered and not a direct cause of your positivity. Perhaps your optimism is a strong ideal - though nothing more than optimism.

That is certainly something to be positive about.

Gringotts Bank · 12 September 2011

skc said:
Exactly what I had in mind.

Thanks for your response GB. It's hard to believe, not because I don't have an open mind (or that trading pyschology is taboo), but because it is completely irrational.

I don't know how much work you think you've put into your research... but no matter how much work you have done the best you can prove is that a positive attitude is "the most important" factor. You will never be able to prove, nor it will ever be true, that positive attitude is sufficient. You are still making a logical leap from what you've said.

So what happens if person A with a positive attitude longs a stock and person B with an equally positive attitude shorts the same stock?

The only argument one can come up with is that the loser did not have enough positive attitude.... then the whole reasoning become circular...

- Positive attitude is sufficient for trading success
- If a person with a positive attitude did not succeed, they were not positive enough!

I have thought about that scenario (along with many others) skc. Two people, one long, one short, both very strong winning attitudes at that specific moment in time. One possible explanation is that this sort of situation would never occur. Another possible explanation is that our understanding of one or both traders is flawed - we thought trader #1 was very positive, but he always got the wobbles after a huge winning streak. His inner dialogue is "wow things are going well.... a little too well" and doubt has crept in just at that very moment. Perhaps trader #2 has a brilliant attitude, but when placed under the microscope, falls to pieces. A third possibility would involve the idea of parallel universes wherein whatever trader #1 believes will occur occurs, whatever trader#2 believes also occurs, and whatever you believe will occur, occurs, and whatever I believe will occur occurs, perhaps all in sych inside the one universe, perhaps in 4 separate universes, all identical apart from one factor - viz the outcome of the trade. If the two traders had absolutely identical attitudes, then both would win in different universes. The idea of "observer dependence" - read here: http://www.sciforums.com/showthread.php?t=85553

By the way, parrallel universe theory isn't new age mumbo jumbo. Lots of links on the web.

Surely, it can't be this easy?!

Nonchalant

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