When I took direct control of my investing, I figured out what I would have at 10% a year average gain. Some years would be less, some more. I do look at the s&p 500 as a guide as to how I'm doing but 10% is the goal. I gain 16% in 2021 and I'm down 10% so far in 2022. Looking at the S&P 500 shows me that I could be doing worse. EQT has been what has kept me doing OK this year. Take that away and I'm way down.
Some people make money trading but its few and far between i think. I don't have the time to spend doing it. I would think my emotions would get in the way more than they do now so I definitely don't day trade. I think of myself as somewhere in between a swing trader and a long termer. I hold positions 1 to 3 months usually.
I consider anything under 5 years to be short term. I do not believe it's possible to beat the S&P 500 index on the long term with any short term trading strategy.
Terminology is pointless to me. I'm in it to win it. Sounds like you have it under control. I'm not the type to hold a losing position. Burned and learned. Watched Tesla and opened a position just before EARNINGS and the 3.1 split. It worked, haven't looked back. YET.
Not POSSIBLE? I can go with difficult or unlikely, but we know it's POSSIBLE because it has been done. Another thing to consider is that it's possible in part because of the amazing price swings of some stocks. If you make double your money on a large trade and then put the money in a CD or money market account for five years, that's roughly the equivalent of five years return at 20% or more! Depending on CD rates. Possible and impossible are very big words.
Yes. Not possible on the long term. Trading delays retirement because it underperforms the market, over time. It is also a problem for retirees because they can't afford to lose money. I'm retired. I have about 25 years to live, best case. The only strategy that will get me to the end is a long term hold strategy. Do not misunderstand this to be an argument. It isn't. We don't care what each other thinks. The mixing of different points of view are the value of a site like this. This is your opportunity to show us how much money you can earn with a trading strategy. If you are able to make money, I will reconsider my outlook and perhaps even consider taking up trading. This is how I can learn from you. On the other hand, if you under perform the market by a wide margin, like everyone before you, I expect you will get out of the market for a while and then re-enter after a period of contemplation with a new strategy to get rich quickly.
It absolutely IS possible! Winning the Super Bowl is extremely difficult, but 50+ players and a hundred or more team staff do it every year. So what does that make the odds? 160 out of 300 million? But to say it is not POSSIBLE...?!?! Not practical for most people, impossible for many if not most people, but certainly not impossible, because some number of people are doing it! Just because this is true for 75% or 90% of people (or whatever the undetermined percentage is), doesn't mean that there are not a LOT of people who make their living trading! I know this is true. I was in a mentoring program where I was making over 15% more a year than my regular investments, trading. But it was too much work, and too stressful. It was not worth it to me. I was getting online before 8am Eastern time and staying online most of the day, and often until 4pm - monitoring three screens. A combination of day trading and swing trading. There would be times when two or more of us would be working the same stock play (virtually, not co-located) - and one of us would make money on a stock and another would lose money on the same stock - because we executed our trades a minute or two, or sometimes even a few seconds apart. Not for me. But that doesn't mean those same people aren't making well into six figures - maybe more, I don't really know how much they were making, to be honest. But I was making more than 15% a year, (again, compared to my regular brokerage account) and that was after all mentoring fees, and they were seriously outperforming me, and I was watching them do it (online), so it wasn't smoke and mirrors. I didn't want a full time job after I retired!! Not even as a self-employed trader. And it wasn't something I could do on a part-time or casual basis - it required a huge commitment of time and mental energy - so I went back to being primarily a long-term investor. I say primarily because I do have a small amount of "play money", and I will also sometimes take profits if a particular stock jumps up high sooner than I expected it to. I'm not comfortable with "paper gains", unless they are the dependable kind. When something JUMPS unexpectedly, I usually take the money and run. I've had several occasions in the past when I held stocks that shot thru the roof, and lost my "paper profits". The above is also true for me, depending on what age we are going to call "best case". Actually, I do care what you think, in the sense that I respect your opinion and enjoy your posts. As I've already stated, I was able to make a higher percentage trading than I've ever made on my long term investments. Again, in a mentoring program, not on my own - but I was learning how to do it on my own. The select traders running the mentoring program were making SERIOUS money from trading - so much so that I don't understand why they cared about the relatively small sum they were getting from me. But they seemed to eat, sleep and breath the stock market! They were working as long and hard and as many hours as I did in the heart of my professional career. Again, not worth it to me at my age. I don't have the energy, and I want to enjoy my time in retirement. Several times that I have disagreed with you, I think it is over terminology and semantics. I can't help but disagree over those two things, sometimes. Words matter. My example of the Super Bowl is an excellent example. Just because most people can't do it, doesn't mean it's IMPOSSIBLE. As risk of repeating myself, IMPOSSIBLE is a big word and should be used advisedly. Do you not believe that there are hundreds, perhaps thousands of people who have made more than a few million dollars, trading? And are living on the proceeds? If you don't believe that, there's another situation where you and I will have to agree to disagree. I would go so far as to say it's probably a verifiable fact - at least the "hundreds" part.
Mr. Rayak. Our views simply do not align on this. Please understand: this is OK. Thank you for your respectful words and please accept my own offer of respect to you. While I don't share your point of view, I am absolutely cheering for you to succeed. I've shared my thoughts. I stand by my posts, however, that is all the negative energy I care to inject into this discussion. I only know a couple of ways to make money. There are more. Now it's time for me to type less and read more. This is not sour grapes at all. This is sincere interest and a desire to learn. Please accept my best wishes for success and, if you can manage the time, share with us as much of the journey as you care to.
I was going to give it a rest but let me blurt out several disembodied thoughts that may be relevant. - people make far more on the markets when they stop trying to get rich quickly. - people want to respond to stimulus but the correct course of action is nearly always to do nothing. - I did well in real estate with a defiant attitude and buying when everyone was telling me re is dead - I did well in the market when I embraced the advice of a mentor to be content with 8-10% average long term return. - Almost everyone ignores the business and focuses on the stock. The key to success is to ignore the stock and focus on the business.
The simple answer is if you can't protect 80% of your profits you expose your capital to the markets, it makes no difference if it is gold, art, real estate or stocks, the same applies where the benchmark is 1-2% per month return on capital, with experience and knowledge you can protect 80% of profits at that level. The S&P is running at 20%pa with a long term average of 12%pa which is what hedge funds achieve, protect 80% of profits at 15-20%pa, the issue they have today is that due to dynamics those hedge funds can only protect profits to 50% or they have to reduce returns down to 7-10%pa, hence ever increasing global fund redemption. You can think you won one month, one quarter, one year, only to find in the next cycle you have exposed both your capital and your profits to the markets, it usually does not end well, I have access to a unique architecture that guards 80% of profits above 20%pa, it's institutional and hedge fund grade plus runs family office using algos to do the work of people. For example I was provided the analysis last year to go long Boeing for a 70% gain and go short Tesla for a 50% profit via the fund managers who curate the content over the algos, that is how you beat the S&P as just those two trades went a long way to the 50%pa it creates for private funds (which is not to compound but for wealth management), the reason no one generates these returns is because those investments are closed and that is when you will hear about them, not before. Those fund managers in 2013 wrote an analysis about the GBPUSD going to parity within a 7-10yr timeframe, it was actually 9yrs and within 400pips after a 3,500pip move, that analysis was 3yrs aread of El-Erian who predicted the same outcome, in the markets knowledge drives everything but to action that knowledge takes confidence. Which is why these pieces of information rarely find their way to even Accredited Investors let alone Retail, you might get the tail end of it for the 3-5% and 7-10% level returns but that's about it, plus Quantitative Easing drove markets to highs which is now turning to Quantitative Tightening making what was difficult for most before many times more complex today.
I think the key to beating the S&P 500 index is to double your money as frequently as possible, probably using hot tips and leverage. Annual doubling is OK but monthly is better. I would say that weekly doubling is even more preferable to monthly but that's just my opinion. Even though only a few people in the last century have beaten the S&P 500 index long term, and essentially everyone who has tried has been hurt badly, it is vital that people continue to try. It's better to take the chance on a one in a billion success than to use methods that work 99% of the time. Every one of you has my sincere, best, wishes. I will be pleased to hold your beer while you provide an entertaining display.
Some would do better collecting coins or stamps. Others can do very well trading the trend, it's only as difficult as the individual makes it. Most simply don't advertise.
This is an interesting post. Is your position that most people who make money trading don't discuss it so the successful traders who chat online are the tip of an iceberg of financial greatness? Are you being sarcastic, like I was?
