a complete newbie needing advice

Anarcyninja, start in this forum. https://stockaholics.net/forums/educational-videos-and-material.20/

The link to the basic training through Investopedia has a lot of information in it and could help you figure out what your overall strategy or a blend of several strategies can be. Also, there is a forum on Vendors that have some info in there. I would recommend something like TD Ameritrade which is the one I've used for over 7 years now and still have high recommendation on them.

There is a lot to learn and being realistic you will not be able to replace your day job with this unless you already have a multi-million dollar base of funds to work with. I do not believe that someone can take say 100K and consistently turn that into enough profits that one could use those profits to live on and continue to grow a base portfolio. It is simply not realistic to expect that.

 

Try this site too:

https://www.forexpeacearmy.com/comm...-trading-education-forex-military-school.158/

AMD closed the week at 27.38. It had built an 8-year long base and a point & figure count gives a price target of 37.50 to 39.50. The March 2006 high is at 42.70. It's likely gunning for that 42.70. If you bought AMD here and sold at 42.70 you would realize a 56% return. Of course it could drop $7 (25%) and not have anything wrong with it, before it resumes its course higher. Can you sit on your hands when you've lost 1/4 of your investment? Or could you cut your losses at $24, and take the 12% loss and walk away?

The rule I use is not to risk any more than 1 to 2% on any one trade. The reason for that is that you can have many, many losses in row and still be in the game. So say you start with a $10,000 portfolio and adopt 2% maximum risk on any one trade, then you could risk $200. You buy AMD at 27.38 and put a sell-stop at 23.88, limiting your loss to 12.7%. Your potential loss on the trade would be 27.38 - 23.88 = $3.50. The number of shares you can buy would be $200 / $3.50 = 57 shares, say 50 shares. If the trade went in your favor you would turn your $1369 (50 x 27.38) investment into $2,135 (50 x 42.70). Of course the closer your buy point is to your stop, the more shares you can buy and the more you can potentially gain. So you see timing is a huge factor in this game no matter if you are a day trader, swing trader, or long term investor.

Here's another basic but important concept. You must cut losses short. Say you are down 10% on a trade, how much would the stock have to rise to break even?

Buy at 27.38. Down 10% gives a price of 27.38 - 2.74 = 24.64
To break even stock must rise back to 27.38: 27.38 - 24.64 = 2.74..... 2.74 / 24.64 = 11.1%

But allowing a 25% drop requires a 33.3% rise to break even.
And a 50% drop requires a 100% rise, a double, to break even. A double doesn't happen too often and could take a very long time.

 

I guess that depends on what you mean by "...a very long time". I would never advocate the "buy and hold" strategy as I firmly believe that fundamental analyses by outsiders is fundamentally flawed. Others here may have a different opinion and a different set of skills and may be willing to help you with that.

Also though, stock prices spend most of their time within trading ranges and relatively short periods of time in mark-up or mark-down. So why would you want to sit through those trading ranges and have your capital at risk? That's what you'd be doing if you buy and hold.

It is in those trading ranges where the big players are establishing their very large positions. When they are done accumulating or distributing, the price is marked up or down depending on how the big boys are positioned. If the they are positioned long, then they can control the supply of stock that can be traded on the open market. The supply and demand principal dictates that if there is a smaller supply of something available, the price will rise. Contrarily, if the boys are positioned short, then they have distributed all of their stock to the public and sold the stock short, and since the public is fragmented and cannot collectively control the supply of stock coming into the market, the price will fall.

You can believe in a company's fundamentals to a fault, because if the public owns all the float and owns the virtual shares that the big boys sold short, the market will be awash with shares for sale, and there isn't any amount of wishing or company actions that can turn the tide of selling, all the news will be bad news.

 

You really can't. The best you can do is use a valuation method that uses "projected" earnings growth 5 years into the future (which is not all that reliable) and using that project a price into the future. There is nothing wrong with having a good feeling about a company and take a long term approach on it but even that method should not be considered a hands off approach. You should have in mind some sort of fundamentals change that will cause you to consider an exit. It might be something that you expect 10% growth in earnings and if they show weakness in that area you get out. Maybe even a debt level that starts changing etc. and you get out. That means you have to review fundamentals even on long term stuff at least each quarter to confirm they are not turning weak.

 

AMD may or may not be worth hundreds of dollars, one day. It's possible to roughly predict the future value of a company using techniques developed by Benjamin Graham, and others. These techniques are not the end-all, to say the least, but they can bare a lot of fruit for those who know how to use them and, more importantly, when to not use them.

Buying shares in a company that seems to have some buzz in the industry journals is nothing short of gambling. You will think it's great when the markets are expanding and your stock goes higher on a rising tide of incoming money and you will hate life when the markets recede and your stock goes down. Generally speaking, by the time a company has people talking about it as an investment, it's too late to extract much value.

Anyone who does not consider the fundamentals of the company underwriting the security is gambling. No exceptions.

An investor believes in the company and wants to own it. An investor will hang in through adversity, if they believe the fundamentals of the company are strong. An investor will sell a company, even if it's going up, when they believe the fundamentals of the company are no longer acceptable.

I encourage you to go with an index strategy or a GIC ladder. These are simple techniques that will do well for someone without fundamental knowledge of the businesses which underlay the stocks they may wish to hold. Even if you wish to get into value investing and you start reading about it and following companies, stick with index and/or GIC ladders until you know what you are doing. It's going to take a year or two and, even then and even if you are gifted, you won't be great at it.

Alternately, you can put your money into the market and make random trades until that money is gone. Those of us in the market appreciate your contribution so, thank you. Once the money is gone, you will have two choices: either come back and consider learning a more conservative strategy or tell your friends the markets are nothing more than a rigged gambling house that can't be won.

I started investing in the 1980s. I'm 51 years old and we are confident enough in my capabilities that we don't question our ability to live a nice lifestyle, even when (not if) the market takes a 50% correction. I have no formal pension. There are quite a few people in my position but no one with real, long term, success will tell you it was either quick or easy. Most or perhaps all of the people posting in here will be gone the next time there is a global financial melt-down. I've been through a few. They aren't fun.

You make enough money to build a better life for yourself. Consider putting $500/mo into a TFSA and buy into an index strategy like couch potato. You will love the feeling of having a little bit of money set aside and, only then, you can start investigating strategies with daily reading and research.

Welcome to the site. I believe you are on the right track to a better future.