OT Online Stock Trading - saving for my next boat

[bntii]

Sounds good.

My first year of trading was a real fight.
I started by doing high frequency day trading in a falling market (buying rallies) and just managed to hold the account intact.

I was treading water like a mad man to just stay afloat.

When the market direction changed I went long & immediately started to make money.
I had stopped for several years and I am just returning to the markets.
My strategy this time is buying into some neglected sectors whose price per share in individual stocks have fallen to multi year lows.
Some of these are trading far below their book and in some cases even below earnings.

My game is sort of a 'value investing' though I am entering stocks which have sector or business liabilities which have them trading far lower than just the normal beaten down issue.
I also am taking on more risk by selecting companies which have term based liabilities. A traditional 'value investor' has greater safety by disdaining these risks.

I made several rookie mistakes when I started trading again.

I purchased several stocks just on being cheap with no real clear signal that the stock had bottomed out in a technical sense.
I also did not pay sufficient attention to fundamentals to asses that the stock was if fact trading sufficiently below value so as to protect from downside.
Stops are a wonderful thing and protected assets as they were triggered.

As the market reminded me that I was being too sloppy I tightened up my trading and have made some large gains on several purchases. I also am positioned comfortably in stocks I understand well and will hold long term.

Check this site for a simple means of assessing fundamentals:

http://ycharts.com/

I have started to use three rules for purchase:

Price- the chart must indicate the stock is at the correct purchase point.

Fundamentals- the published numbers must demonstrate that the price paid is a value based on current earnings/assets, or if I am speculating, a clear trend must be shown which indicates near term strength.

Market- I try to keep an eye out and am not buying into issues which are so strongly market bound that a sell off of the DOW will immediately collapse the price.
The market is casting about for the worry of the day- don't get whipsawed out of positions as by the herd mentality of rushing back and forth between confidence and gloom.

To my mind the single most important aspect of trading is understanding trend.

Understanding price evolution as expressed on the chart is the strongest tool in my trading strategy. This is the helps you to pick stocks which hopefully will move in the direction of your trade. It also makes clear the significance of price changes.
The second most important concern is a accurate appraisal of value.
This insures that the stock with has begun to change in price (increase) has a inherent market reason for trend: towards the real value of the company.

Markets can price stocks far below or above their real value- I typically trade in these out lying regions.

I buy based on chart- it doesn't help to buy below value if the markets are willing to sell the stock far lower.
If a stock is trading in a range- understanding that range comes from the chart.
Trend same.

Six months or so should tell the tale- I'll let you know if I loose my shirt!

[WestVanHan]

Originally Posted by IMP-ish

Not very fast. I have a fidelity investment account now. I've funded it with $10,000 to test the waters. I've been up, down, up, down, and up and have a realized gain of 2.1% from where I started. At least I am slightly ahead as I type this instead of slightly behind but I will be doing a lot more testing before I put any more money at risk.

So you're up 2.1/$210 that's quite good as you've just beaten the banks and many mutual funds.

Any option plays?

[IMP-ish]

Hope everyone had a happy Thanksgiving holiday.

No, no options or other derivatives yet.
Not even close to more advanced things yet.
Still much to read and understand.

I also have not made much use of the fidelity simulation tools yet. At first try they look basic.

[SamSam]

Originally Posted by IMP-ish

Hope everyone had a happy Thanksgiving holiday.

No, no options or other derivatives yet.
Not even close to more advanced things yet.
Still much to read and understand.

I also have not made much use of the fidelity simulation tools yet. At first try they look basic.

Well, how's it going now?