| Lessons learned...let's talk about rules... |
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jwhite622
Full Member
Cash: $ 17.25
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Joined: 02 Apr 2006
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| Lessons learned...let's talk about rules... |
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Let's be real! I love hearing about other people's experiences...so I'll tell you my biggest mistake if you tell me yours.
I bought LVLT at 4.93--let it ride to 5.50 and got greedy--corrected fast, but I still made a little profit.
I learned during that ride, that greed can conquer even the best fundamentals...
What type of rules do you use now that came from previous mistakes???
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Sat Apr 29, 2006 1:41 am |
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JBendar
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Location: Woodbridge, New Jersey
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| Talk about rules |
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There are plenty of rules you can list here, the few that work for me are listed below:
Go with your first instinct, put your sale price objective in and stick to it.
Don't wait too long for your profit objective, if it doesn't work, sell!
Greed is your worst enemy, a small profit is better than a large loss.
JBendar 
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Sat Apr 29, 2006 2:07 am |
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JBendar
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Location: Woodbridge, New Jersey
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Forgot to list a major mistake. Purchased a company based on advertisement mailed to me. Everything was working fine. Entered low and set a price objective. Talked to my son the conservative who told me to take profits or wind up a loser. I came out with a 400% profit, but the stock proceeded to take off (instead of 400%, could have been over 1000%).
Joel 
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Sat Apr 29, 2006 2:59 am |
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Safora
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My biggest mistake is not having learned how to invest, sooner.
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Sat Apr 29, 2006 3:45 am |
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Mike K
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Location: Doha, Qatar
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Major mistake #1:
Back in late 2002 early 2003 i was in the military making decent money when i was deployed, paid off all of my bills and had $5000 left over. I wanted to do something smart so i put it in the SP500 back when it was $850-900. Three days later (and a $300 profit might i add) i found something i wanted to spend that $5000 on so i closed my investment account and used the money to buy something i really didnt need. So to pigyback off of what Sofora said, i not only wish i would have started investing sooner, but i wish i would have stuck with it, how much would that $5000 be today
Mistake #2: (i have already told this story on here)
I just started investing full force starting in January. In march i heard about this 'great' company called Gamez-N-Flix. They do the same thing as NetFlix except they rent out console games as well (xbox, ps2, etc). Circuit City was testing them out to see if they wanted to use thier services in all of thier stores but at the time only had a few test centers. I did some research, found that the company's stock was just a little under 1 cent and Circuit City might be able to help them pull out of the holl. I invested some money and when the press release came out the stock shot up to 2 cents. I sold and doubled my money.... great.... except i got greedy and while watching the stock go down i saw what looked to be like a turn-around so i dumped all my money into it again, well the stock kept going down. I finally sold everything back at 1 cent... i made a small gain overall but lost quite a bit of money due to greed.
Thats why i am on here to learn as much as possible!
-Mike
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Sat Apr 29, 2006 4:11 am |
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jwhite622
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Joined: 02 Apr 2006
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Great responses...
First, I have to let you all know--I AM A TRADER, not an investor (maybe in alternative energy soon, but that's about it)
I guess I should have told you my rules--
1. If a loss drops below 8% on a bearish pattern I get out--
2. I never buy a company at the bottom of a channel (as with SLW--I lost some time waiting for it to settle in its new channel), instead I wait for a candlestick reversal and confirmation.
3. I buy stocks based on sector strength, market cap, and individual technical indicators (personal style).
4. I look as far out as 3 years--and work my way down to 10 day, compare highs/lows, look for cheap stocks with a good story and strong technical indicators.
5. I never buy on someones "guess" or a "hot tip"--
6. Selling short takes talent. As well as entry points/exit strategy (allow for 5% novice errors)
7. Margins are for people that have sure fire stocks.
8. Don't trade what you don't already have--
9. Slowly buy into a stock, it really mitigates risk.
10. On that note--slowly take profits as you feel rewarded (i.e. the 400% vs. 1000% situation)
11. As a trader, always find at least a half hour to analyze and review your portfolio--every day.
12. Enjoy it--and in my case--NEVER DIVERSIFY--you won't get rewarded...
I guess one thing that I've learned is that you can really make a lot of money in this game if you pay attention to what you are doing--and don't get caught up in day to day things.
Risk is a term used to scare away people who don't understand the concept of money--it's not going to kill you if you lose a lot of money, and it sure as hell won't cure AIDS if you make a lot of money. It only provides a diffrent quality of living...don't allow it to rule your emotions, or life for that matter.
Take time to enjoy the rest of your life.
This is great--keep them coming--Thanks
J
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Sat Apr 29, 2006 5:02 am |
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Mike K
Contributing Member
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Location: Doha, Qatar
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quote:
Originally posted by coaster
All right!! Someone else here who makes the distinction between trading and investing!! 
Thanks to google i found this:
TRADER:
An investor who holds stocks and securities for a short period of time (a few minutes, hours or days). The goal is to profit from short-term gains in the market. The stock selection is generally based on technical analysis or charting which relate only to the stock price rather than a fundamental evaluation of the company as a business. The IRS offers some tax benefits to traders: they can deduct their interest expense without itemizing, and seminar costs can be deducted as well as home office expenses in connection with investing.
Link: http://www.investorwords.com/5025/trader.html
INVESTOR:
An individual who commits money to investment products with the expectation of financial returns. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits.
Link: http://www.investorwords.com/2630/investor.html
So to sum it up a trader is short term and investor is more long term?
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Sat Apr 29, 2006 12:55 pm |
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Mike K
Contributing Member
Cash: $ 7.55
Posts: 37
Joined: 16 Apr 2006
Location: Doha, Qatar
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Ok... well that only sounds a little complicated  so i think i will stick with my current IRS filling 
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Sat Apr 29, 2006 1:18 pm |
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Safora
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quote:
Originally posted by Mike K
So to sum it up a trader is short term and investor is more long term?
That's how I saw the distinction too. But then I read in another post by coaster that said....
quote:
Originally posted by coaster
Stocks = investor
Futures = position trader
Coaster...Help!
What do you consider people who trade stocks on a short term basis?
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Sat Apr 29, 2006 2:59 pm |
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jwhite622
Full Member
Cash: $ 17.25
Posts: 84
Joined: 02 Apr 2006
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quote:
Originally posted by coaster
quote:
Originally posted by Safora
What do you consider people who trade stocks on a short term basis?
You use the word "trade" and that's how I'd classify it, too -- trader. Nothing wrong with that. Just take an approach that's appropriate for that kind of activity.
Well, I've never claimed any "stock" market income on my tax returns yet...what would you recommend on this? Books? Articles?Websites?--Keep it Simple bro...I want to learn, but only the pertinant stuff--
Think it's worth incorporating as my portfolio grows?
I already have some people interested in handing over thier money for me to manage--even though I'm a rookie--
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Sun Apr 30, 2006 12:34 am |
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jwhite622
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Cash: $ 17.25
Posts: 84
Joined: 02 Apr 2006
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quote:
Originally posted by coaster
Managing other people's money you take on fiduciary responsibility. Puts you at great risk of being held legally responsible if the money doesn't grow. I certainly wouldn't put my hard-earned assets at risk to make somebody else rich. And you can't give specific stock-selection advice, either....that puts you afoul of the SEC. You need a Series 7 and NASD registration to do that.
"Stock market income?" I don't know what you're asking. What's reported on the 1099 you get from your broker is required to be reported on your tax return.
I was more intereted in filing advice...you said that you wouldn't claim to be a trader...why?
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Sun Apr 30, 2006 2:41 am |
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jwhite622
Full Member
Cash: $ 17.25
Posts: 84
Joined: 02 Apr 2006
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quote:
Originally posted by coaster
You mean claiming to be a trader on my income tax return so I can file a Schedule C? I don't meet the requirements.....and they are onerous.
http://www.traderstatus.com/trader.htm
Ok, I see what you're talking about...
Definetily not me...Thanks Coaster...
J
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Sun Apr 30, 2006 10:30 pm |
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