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Thread: Investopedia

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    Ja mata, TosaInu Moderator edyzmedieval's Avatar
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    Default Investopedia

    ...and other trading platforms. (financial markets)

    But mainly Investopedia because it's a free stock simulator, it allows you to first of all learn - and learn a lot! - and it also gives you a comprehensive portfolio of stocks that you can trade, to test it out. Investopedia is the Wikipedia of financial stuff, so even if you're not into trading, go for it when it comes to finance and economics because of the wealth of information. (www.investopedia.com)

    Not much to say except hop on over there if you're interested in trading stocks and learning about financial markets.

    Anyone trading?

    Last edited by edyzmedieval; 12-20-2016 at 05:41.
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    Iron Fist Senior Member Husar's Avatar
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    Default Re: Investopedia

    While I like the theory of stock markets and people owning shares in their own corporation etc., my thoughts on the practical implementations of financial markets are for the Backroom.

    To answer your question: No, I don't, I do not currently have the disposable income/will/priorities required to partake in such leisurely/serious activities.


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    Ja mata, TosaInu Moderator edyzmedieval's Avatar
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    Default Re: Investopedia

    Husar, you can go for the demo account, it's free to use and it gives you virtual capital to test out your skills.
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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Husar View Post
    I do not currently have the disposable income/will/priorities required to partake in such leisurely/serious activities.
    This is a very important statement, although the leisurely part is concerning.

    One thing about trading is you have to be prepared to lose money. YOU WILL LOSE MONEY, GUARANTEED. The question is how much can you afford to lose? How much of a loss can you take so it will not ruin you?

    If anyone has a leisurely attitude toward trading with money, then that also is no reason to do it and a very surefire way to lose 100% of all that money.

    Trading should be conducted as a serious LONG TERM business plan. I don't mean buy a stock and hold it for 50 years. I mean you should limit your losses to a manageable amount so that when a winner comes it will pay for any losses and then some. Therefore, allowing you to stay in the game over the long term and begin to create an additional amount of income for yourself.

    This video is the very essence of trading. If you can understand it's meaning you have a very good start to trading profitably in the markets.

    Investopedia is fine if you want to know what a term means, but it will not teach you how to trade. In all honesty losing REAL money is the best teacher. If you can learn from your mistakes. The problem is humans have the capacity to repeat their same mistakes over and over and over again.

    A good place to start is to learn about the psychological aspect of trading. Jesse Livermore, one of the greatest traders of all time, said " it's not in the buying and selling that the big money is made, it's in the waiting."

    One book I recommend is The Art of Contrary Thinking by Humphrey Neill.

    Also, look at Dr. Van Tharp or Dr. Alexander Elder's books. Both deal with the truth about trading, that is, the state of our mind's at the time we begin to trade. Believe it not, some of my best trades are when I am at total peace and some of my worst have been when I was angry or sad or anxious, etc(I've blown up my account twice, last one was over 100k)

    Trading is great way to earn a supplemental income on top of your primary career. You can succeed at it over time.

    First you have to have goals and objective's of why you want to trade and how long you think it will take you to get there. If you think your going to become rich overnight just forget trading and go throw all your money on the roulette table. If you map out a plan, treat trading as serious business and make sure that your mind is in the right place, then you can and will succeed.

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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by edyzmedieval View Post
    Husar, you can go for the demo account, it's free to use and it gives you virtual capital to test out your skills.
    Sorry, I forgot to address this. Demo accounts, otherwise known as " paper trading" are useless. They remove the one key ingredient to trading.......emotion.

    When you paper trade you have no emotional connection to the trade. You will know exactly what I am talking about the minute you put on a trade with " REAL MONEY."

    All the emotions of hope, fear and greed come into play. That is why it is of utmost importance why you should be in a good mental state even before you put on any trades.

    Instead of using a demo account it would be best to " backtest " your trading ideas. This will give you a parameter of how your strategy would have worked, although past results are NEVER guaranteed.

    You can even backtest strategies using excel. Here are some computer programs that might guide you through the process. http://quantpedia.com/Links/Backtesters

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    Ja mata, TosaInu Moderator edyzmedieval's Avatar
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    Default Re: Investopedia

    Well, I differ a bit on the emotion part - because I tried demo accounts, mainly to learn, and I was always into it 100% because I really wanted to see how my knowledge stacked up to proper trading.

    So it depends.

    But I do suggest trying out paper trading accounts to see how it goes.
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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by edyzmedieval View Post
    mainly to learn, and I was always into it 100% because I really wanted to see how my knowledge stacked up to proper trading.

    That's what backtesting your system is for. To see how your system stacks up against prior market action. Remember, the market is constantly changing so past results are NEVER guaranteed. It's why it is so important to know your trading rules.

    You have follow your trading rules to the tee, to not let emotion rule you( you do have rules don't you?). In order to get to that point it takes great discipline. You cannot achieve that discipline without the risk of loss. Demo accounts have no risk. If this is your first foray into trading you will see that it's easier said then done to see how your knowledge stacks up in the heat of the market behavior.

    Instead of a demo account, a good way to start would be to begin trading with a small account($5,000). If you lose it, it's not the end of the world.

    It would be a good way for you to put your trading strategy into play with REAL money.

    The experience you will gain will be much better than a demo account. You will learn to perform under intense pressure, thereby honing your trading skills and mastering your particular strategy in real time with real money.

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    Senior Member Senior Member Othello Champion Montmorency's Avatar
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    Default Re: Investopedia

    Instead of a demo account, a good way to start would be to begin trading with a small account($5,000). If you lose it, it's not the end of the world.
    Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?
    Vitiate Man.

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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Montmorency View Post
    Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?
    Trust me brother, if you think $5000 is too much money, then you cannot even entertain the idea of trading. I'm sorry.

    In order to make money consistently, you have to be well capitalized, because YOU WILL LOSE MONEY.

    The key is to try and make sure your winners are greater than your losers.

    5k is nothing in trading. Look at the prices of the major stocks, those that move significantly( volatility is actually a good thing for price movement). Most of those prices are $50 or above. So, with 5k your only able to buy a max of barely100 shares, and that's not advisable because you don't ever want to have 100% of your equity at play at one time, especially in one stock. Note : I personally don't trade stocks, I trade futures. You can trade futures with $5,000 also but it is not advisable. Futures have better buying/selling leverage than stocks. Example. Apple's price is at $115/share. To buy 100 shares you will need to have $11,500 in your account. To trade the Nasdaq Index in futures, which Apple is in, you would need only currently $3,960 in your account. That $3,960 is actually a deposit which you get back when you are out of the trade. You basically have more purchasing power for less money.

    I apologize if I'm not clear in any of my definitions but I'm not a teacher. I'm actually a truck driver for the last 30 years. I started trading in 2003 and have actually traded only 5 full years since 03'. So you see, trading takes time, patience, learning and a lot of ups and downs if you are NOT disciplined, which I wasn't in the beginning.

    Just be patient. Live your life, get your career, stay out of debt, put a portion aside for trading and in the meantime find a trading strategy that fits your personality and test it, then test it some more, then learn it more, then test it more, and keep reading anything you can about trading until the day you are ready to trade with your own money. That day my friend is when the REAL LEARNING begins.

    What people need to focus on in trading is NOT how much money you are going to make, rather how much are you going to lose. You must know what you will do in any trading situation even before you put the trade on.

    If you concentrate all your energies on minimizing your risk, you will come out on top in the long run.

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    Iron Fist Senior Member Husar's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by ztrain909 View Post
    small account($5,000)


    Quote Originally Posted by ztrain909 View Post
    Trust me brother, if you think $5000 is too much money, then you cannot even entertain the idea of trading. I'm sorry.
    As I said, my commentary on this is all Backroom material. I'm sorry.


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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Montmorency View Post
    Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?
    Maybe I misspoke. I thought about it some more and I guess to answer your question it depends on what your goals are. There are brokerage accounts you can open for as little as $500. So yes, you can begin with very little money, but the biggest question is WHY would you?

    Why do you want to trade? If you have a good career path and are not really looking to make an additional amount of income then the answer is yes you can begin with little capital and have some fun with it. I'm assuming you want to have fun because I don't understand the " no meaningful experience to be gained or returns compounded" portion of your comment. Why would anyone NOT want to gain experience in any particular endeavor? Plus, if your not concerned with your returns then it must be for kicks and giggles, I guess.


    I come at it from a different point of view. All I'm trying to get people to avoid is the " pie in the sky dreams " of making a fortune or even making consistent money without being properly capitalized.

    I'd rather people avoid the mistakes that I made. I started with $5,000 and lost it all within a year. Now, that's all my fault and not necessarily a "proper capitalization" problem, but I have gained experience and I have immersed myself in many things having to do with trading for the last 13/14 years, and I can honestly say I'd rather start with good capital.

    Again, this is subjective because we're all different people with different objectives, goals and appetite for risk, but the question is the same for us all.

    Why do we want to trade?

    If the answer is to make a ton of money, then you are in for a rude awakening if you think you can do that starting without being properly capitalized.

    If the answer is to try something new and have some fun with it, then by all means, open up a demo account and have a blast.

    If the answer is to earn additional income as a steady source, then you have to begin with the proper capital and any free time you have must be consumed with educating yourself on anything to do with the markets and/or your particular strategy.

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    Iron Fist Senior Member Husar's Avatar
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    Default Re: Investopedia

    Okay, now I got some more questions, such as:

    If you have 100.000$ to throw away, why would you desperately need additional income from trading? I mean, you already have 100.000$ that you obviously don't even really need given that you're willing to lose them.

    What do you think of stocks as an investment? Does it even count as trading if you buy stock and keep it for ten years or so? What if you begin by buying a single share of the company you work for to start collecting more? Worth it if the company is growing?

    As for trading, can you even compete with people who build an entire data center two blocks away from the "trading grounds" to always be able to buy and sell faster than you can? Or are those the ones where you open an account and set auto-sell and auto-buy rules?


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    Ja mata, TosaInu Moderator edyzmedieval's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Montmorency View Post
    Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?
    Trading accounts can be started up for very little.

    For example, one of the most popular trading platforms - you can start with pretty much 30 dollars. If you're really into this, you can simply start and work your way up, as long as you educate yourself first and you stick to it.
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    Ja mata, TosaInu Moderator edyzmedieval's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Husar View Post
    Okay, now I got some more questions, such as:

    If you have 100.000$ to throw away, why would you desperately need additional income from trading? I mean, you already have 100.000$ that you obviously don't even really need given that you're willing to lose them.

    What do you think of stocks as an investment? Does it even count as trading if you buy stock and keep it for ten years or so? What if you begin by buying a single share of the company you work for to start collecting more? Worth it if the company is growing?

    As for trading, can you even compete with people who build an entire data center two blocks away from the "trading grounds" to always be able to buy and sell faster than you can? Or are those the ones where you open an account and set auto-sell and auto-buy rules?
    1. You don't throw it away. If you have 100.000 $ to invest, you do so to raise more money, not to throw it away or lose it.

    2. Stocks are an investment - and they offer the return, but it depends very much on what stocks you pick to invest. And yes it does, it counts as trading - even if you buy 1 share and you buy 5 shares a month.

    3. Yes you can, because you don't compete with anyone. You only compete with picking the right stocks, bonds and other trading offers - that's it.
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    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by Husar View Post
    Okay, now I got some more questions, such as:

    If you have 100.000$ to throw away, why would you desperately need additional income from trading? I mean, you already have 100.000$ that you obviously don't even really need given that you're willing to lose them.
    I'm a little unclear in what you mean. I'm not familiar with the European way of writing decimals. I'm assuming you mean $100,000.00.
    The way you write that it reads as $100 to me. If you think that $100 is a lot of money that you wouldn't need additionally because you may already have it then, I'm sorry we are just worlds and cultures apart.

    If what you meant was $100,000.00 to start trading then I can understand your concern. I've never stated an exact amount of what you would need to begin trading. That is because it is dependent on our own situations. It's dependent on our own goals, objectives, risk tolerances, etc. The best way I might be able to respond to that is by showing you a small excerpt from Dr. Van K. Tharp's book titled Trade Your Way To Financial Freedom. In the two pictures I provide there are some major questions people have to answer before they begin trading.Click image for larger version. 

Name:	VT 1.jpg 
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ID:	19309Click image for larger version. 

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ID:	19310 These and other very important factors are all included in knowing what the correct amount of capital is needed in order for someone to begin trading.

    If you think your going to start with $30 in a Forex account http://www.xm.com/no-deposit-bonus and turn that $30 into a boatload of money, good luck with that.

    Quote Originally Posted by Husar View Post
    What do you think of stocks as an investment? Does it even count as trading if you buy stock and keep it for ten years or so? What if you begin by buying a single share of the company you work for to start collecting more? Worth it if the company is growing?
    Any investment is a good investment as long as you preserve and grow your capital to fit your own personal needs.

    Quote Originally Posted by Husar View Post
    As for trading, can you even compete with people who build an entire data center two blocks away from the "trading grounds" to always be able to buy and sell faster than you can? Or are those the ones where you open an account and set auto-sell and auto-buy rules?
    The one advantage that a retail trader has over the big hedge funds and institutional investors is mobility. When the " big boys" buy/sell anything that action is reflected directly in price, they can literally move markets. Whereas we can buy/sell our few shares/contracts and no one will ever notice. All any of us are looking to do is possibly ride their coattails. Your not necessarily directly competing against them, your just looking to profit off their massive buying/selling for whatever time period YOU choose.

    Besides, most of the time it's the brokers who are taking the other side of your trade, NOT the funds. This is another misnomer about demo accounts. One thing that demo trading does not take into account is " slippage." There is always a spread between the bid(buy) price and the ask(sell) price. If you are a buyer very rarely will you get a fill at the bid, it's almost always at the ask. So, what this means is if the spread on a stock is .50 cents and you are gong long(buy) the stock you will get filled at the high end thereby reducing your profit potential immediately. Then, when you go to sell the stock you will get filled on the low end of the spread. This is called slippage. It is basically the cost of trading, and it's the brokers/market makers who put that cost on the retail traders. You can always use "limit" orders which specify a certain price at which you will buy or sell, but I promise you in a fast moving market you will rarely ever get filled at your limit price. Or you will get only a partial fill(you want to buy 100 shares and only 63 shares get filled). In demo accounts you will never get this, you always get the best fills.

    At the end of the day the market is going to go wherever it's going to go. You or I have little to NO chance of knowing the how's or the why's. That is why it's imperative to know your risk at all times, and limit it to whatever you can tolerate without it destroying your capital.

    I want to thank you for your questions, they were very good and I hope I answered them.

  16. #16
    Member Member ztrain909's Avatar
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    Default Re: Investopedia

    Quote Originally Posted by edyzmedieval View Post
    but it depends very much on what stocks you pick to invest. You only compete with picking the right stocks, bonds and other trading offers - that's it.
    Actually, this statement has little to do with trading profitably. I'm not picking on you edyz, I'm just trying to illustrate that there is so much more to trading than picking what to trade.

    I have been pretty vague in trying to explain what really goes into trading, nor do I have ALL the answer's. I realize that this is a gaming forum and not necessarily a place to find any experienced traders. I am just trying to help, so that hopefully anyone interested in trading will not make the same mistakes that I have made in the past and possibly avoid sleepless nights and lost revenue.

    In life, if you want to learn how to be great at something you try and mimic those that have achieved success.

    Tom Basso, who was an amazing trader/fund manger, with an incredible track record of success, was profiled in Jack Schwager's classic trading book The New Market Wizards. He once did an experiment where he chose his entries of futures contracts on a " coin flip." He had some strategy " rules," and he did not deviate from them.
    https://abitrade.wordpress.com/2011/03/01/random-entry/

    John W. Henry(Boston Red Sox fans should know who he is) was also a trader/fund manger. This is his fund performance from Michael Covel's book Trend Following.Click image for larger version. 

Name:	Henry.jpg 
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ID:	19314. You see Husar? You ask how can we compete with the big boys? Henry was a " big boy." Look at his performance, he had losing years also. Everyone loses money at some point. That's what happens in trading, it's unavoidable.

    Profitable trading has a lot to do with HOW you manage each particular trade. It has to do with how MANY shares/contracts to buy, when to add more, when to take some away, and so much more.

    There is more to it than just picking something. This is exactly what makes trading such an amazing endeavor. You are constantly learning, then once you think maybe you've got something figured out, the markets change and you have to learn to change with it.

    This is because the markets will always be made up of people. People are the same now as they were in the 1600's, 1800's, 1920's, 1980's, 2008,etc. People are driven by hope, fear and greed. As long as people are involved in the markets, you will always stand a chance at being profitable.

    This is why it's so important to know WHY you want to trade more than HOW you are going to go about it.

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