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wwalker126

My 1st Stock Trade!

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Hi everyone,

 

I've decide to become an active trader. For the past months, I have been aggressively been studying stock charts. After feeling good about producing profits in my virtual account, I now feel comfortable to jump right into the real thing. So my question is: What's going on with the housing industry? I've been following the industry for the last 3 or so months. For the past couple weeks I have watch many housing companies post their earnings. Almost every company has reported quarterly losses. However according to their charts for the past 90 days, it seems many of those company have been uptrending. Is this a possible bounce? I bought BZH a few days ago because I think these companies are bouncing and headed upward.

For those who are experienced, please tell me if I'm on the right track and if have the mindset/criteria/research method of becoming an experienced trader such as yourself?

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When you say you are now an active trader I really hope you haven't quit your job to trade full time.

 

The score is this - to become 'reasonable' at day trading will take you 3-5 years(at a minimum) full time trading with real money to find your style that you are psychologically suited to of course this takes resources in and of itself not to mention lost earnings if you quit your job.

 

The best advice I can give you is:

 

  1. To trade technically off price action.
  2. To read books but NEVER follow what they say just incorporate bits into YOUR style.
  3. To trade using EOD signals, stop-limit orders and continue working your day job(once profitable here consider day trading).
  4. Remember that lots of pro traders risk 2 to make 1 the opposite of what newbies do and still make lots of money.

 

The total cost to me to learn day trading was £200,000 which included lost earnings as I dedicated night and day to trading which was a huge mistake, I really should have swing traded to start as I would have learnt how to trade just as quick and been much richer for it.

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there is no question that I am serious about trading stocks. And of course, I'm definitely excited. I'm not surprised if I get positive or negative feedback. But I was hoping that the negative feedback would support itself with reason(s) as to why I shouldn't be trading right now or why I shouldn't apply the research methods I've come up with?

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I also think that it is an extreme waste of time using the trading forums for reading about other peoples strategies as I can guarantee you they will be of no use to you and will just tire your brain reading all the posts which are written for the most part by unsuccessful traders. This will clog your brain with useless garbage, trust me.

 

You have to stop listening to the guru's (most of which who can't trade anyway) and you have to find your own simple techniques to use. You have to find your own way!

 

Find something you like and backtest it by hand using a spreadsheet, you will soon see if something has merit.

 

To me the forums like this one have been a tremendous waste of time over the years but do have value in answering basic questions.

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Hi everyone,

 

I've decide to become an active trader. For the past months, I have been aggressively been studying stock charts. After feeling good about producing profits in my virtual account, I now feel comfortable to jump right into the real thing. So my question is: What's going on with the housing industry? I've been following the industry for the last 3 or so months. For the past couple weeks I have watch many housing companies post their earnings. Almost every company has reported quarterly losses. However according to their charts for the past 90 days, it seems many of those company have been uptrending. Is this a possible bounce? I bought BZH a few days ago because I think these companies are bouncing and headed upward.

For those who are experienced, please tell me if I'm on the right track and if have the mindset/criteria/research method of becoming an experienced trader such as yourself?

 

I wish you well in your venture. Personally, I wouldn't touch day trading with a 20 foot pole, although there are day traders who make money. I actually met one the other day; he also trades options.

 

But to your question: I am not trading anything to do with the housing industry, but from another perspective, here goes: listening carefully to a number of people (in mortgages, real estate sales, banking) I keep hearing that the banks are sitting on an unknown, but presumed large number of homes which they could foreclose but have chosen not to, for the simple reason that the market is already up to its gills in foreclosures. Add to that fact that the next round of forclosable properties is either here or just around the corner (balloons coming due), the state of unemployment and under-employment, and I keep hearing that it may take until 2013 - 2014 to clear all of it out of the system.

 

It is not that no new homes are being built, or that none are being sold, but rather that builders were sitting on inventory - built homes, partially developed property, and bare land - that was priced when the market was overheated, and the reductions in value still have not been absorbed completely. Can any of the big ones make money? What I have seen locally is tremendous reductions in staff, bankruptcies, and buyouts (e.g. Centex, now part of Pulte). How do you make money when the debt yo are carrying is greater than the sales to service the debt? that, in turn, flows out to all the suppliers, and etc. and etc.

 

And the home builders are not just competing against one another; they are also competing against any homeowner, for reasons other than foreclosure, who wants to sell their home. I am not the least surprised that there were losses; how to explain the increase before? Not everything happens on the news, and not all the news is entirely accurate or complete. And not all professional investors/traders make the right decisions. The market will do what it will do, and we have a plethora of people who have opinions about why it did it or what it will do next. Their collective advice and something under $3.00 will generally get you a ride on the local transit.

 

Just as a point of curiosity, why day trading instead of swing or position trading? Patience?

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Otjm,

Thanks for your personal advice especially since you know those who work direct within the housing market. As I continue to study and learn, I notice that many of my strategies require me to hold a stock longer than 1 day. So for me, I have day trading in 1 hand and swing trading in the other hand, if I could predict the future I say that I’ll probably will be leaning more towards swing trading within the weeks ahead.

Also, going back to my original post; since a bought BZH a few weeks ago, BZH has made a day high of 20+% since roughly 2 weeks ago. Has anyone else traded BZH? Any advice, suggestions, news releases etc would be greatly appreciated.

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When you say you are now an active trader I really hope you haven't quit your job to trade full time.

 

The score is this - to become 'reasonable' at day trading will take you 3-5 years(at a minimum) full time trading with real money to find your style that you are psychologically suited to of course this takes resources in and of itself not to mention lost earnings if you quit your job.

 

The best advice I can give you is:

 

  1. To trade technically off price action.
  2. To read books but NEVER follow what they say just incorporate bits into YOUR style.
  3. To trade using EOD signals, stop-limit orders and continue working your day job(once profitable here consider day trading).
  4. Remember that lots of pro traders risk 2 to make 1 the opposite of what newbies do and still make lots of money.

 

The total cost to me to learn day trading was £200,000 which included lost earnings as I dedicated night and day to trading which was a huge mistake, I really should have swing traded to start as I would have learnt how to trade just as quick and been much richer for it.

 

Good post...

 

Although I don't think #4 is good advice, especially for someone new to trading.

 

.

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Fascinating thread - kinda of a duel discussion on the specific housing sector stocks which in itself is full of intrigue, and then how best to leap into trading successfully (or minimize the pain)

 

What I would say on the housing discussion is if I was thinking about fundamental trading -- and I'll preface this saying I'm a 100% technical trader since I just don't think I'm smart enough to really analyze the thousands of different datapoints in an industry. But, with that said if a housing stock company had a portfolio that included homes in the more solid areas of the country I would have an interest.

 

I can speak from some recent experience. Having sold a home recently in California, having purchased one in Texas. Also the same goes on a rental property in California.

 

If a homebuilder has a focus on the 250K - 500K part of the market in places, like Texas it is still quite strong. I know people getting multiple offers if you believe that - however when it advances above that price range it gets VERY slow. Yes, you are competing against foreclosures, etc... even in the lower range but those can at times be a real pain and people who price right, in a good market are moving. If I saw a builder who was representing this range and was not heavily invested in the areas that were part of the mania (California, Florida, Nevada, etc...) I think prospects are going to improve.

 

Like an above poster said the system is still in for its shocks but to me the bottom is already in in the stronger markets and actually probably 20% - 25% off those lows.

 

That being said, I wouldn't do anything personally unless the technicals that I would trust/follow led me to buy but even someone like me who is 100% technical likes to know the reasons behind the move as well. Or it gets boring.

 

MMS

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Mad,

I couldn’t agree with you more. If it’s not technical then I want to see first-hand the reasons behind a move. With that said, I am strictly interested in technical analysis trading. All, I mean all my trades derive from technical analysis. I bet many would agree with me when I say, It’s always great when a technical trade turns into reality news. In regards to the housing market, I have “read/heard” that the housing companies will start aggressively promoting the idea of BUILDING A NEW HOME to potential homebuyers. Let’s see how that play out in the months to come.

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Hi W. Walker.

 

One thing I would recommend VERY strongly is to WRITE YOURSELF A TRADING PLAN!

 

Yes, I was shouting. :D

 

90+% of all traders lose money.

90+% of all traders do not have a trading plan.

You do the math. :)

 

IMHO your odds of being successful without a written trading plan are almost nil.

 

I wish you the best of luck. But it won't help without a trading plan! ;)

 

Pluto1618

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Pluto,

Thanks for your advice. As you and many experienced trader have said to me, having a trading plan is crucial. However I have learned that some concepts you come up with may work for you and not work for other; or vice versa. Whatever your strategy is, technical or non-technical, long-term or short-term, whatever it is just make sure it works for you. You should be in control of your money whether it increases or decrease you should only be able to blame yourself for the outcome.

 

*Side note* my 1st trade has done well and continues to do well.

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