Making money from home by day trading
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Peace my friend Noon,
Thank you for some excellent information and advice. I agree with almost everything you said.
- Is making money by day trading gambling?
Yes al-maysiru/the wager is similar to day trading betting on outcome/price of a stock would go down (i.e. short sell) or up within a time frame which could be microseconds.
I slightly disagree with this but that's my personal opinion. I think day trading is gambling when someone has no idea what he/she is doing and making bets/trades blindly. The odds in this scenario are against the person and at best 50%.
I think if you know what you're doing, have the knowledge, discipline, and money management skills and can turn the odds in your favor then it is not gambling anymore.
In my opinion it is gambling when odds are 50% or lesser in your favor but it is not gambling when odds are 51% or better in your favor. All the casino games have odds against the players and you won't find a single casino game with odds in your favor by even 0.1%, hence it is gambling.
- Has any reader made money successfully by day trading? Yes
Is it someone you personally know? If yes, I am curious exactly what system/algorithm he/she uses for day trading. Is it reversal trading, momentum trading, previous day range breakout trading, 30 minute open range breakout trading, volume spike trading, something else?
Likewise unless you have access to super computers that are close as possible to trading floors or minimum latency to beat the others since your program can see buy/sell orders moments ahead of anyone else you'll be at disadvantage.
Agreed. I think it is called high frequency trading in which supercomputers get the information nanoseconds before others do and execute trades based on that information. They have almost a 100% edge. The bid ask spread is also not in your favor and puts you at a disadvantage. The market makers always win due to the bid ask spread.
However, I think there is a way to consistently turn the odds in your favor. Please see my next reply.
In addition, they have "wolf packs" or groups of wealthy individuals who decide on strategy to attack a particular stock e.g. at 210 pm they massively short sell the stock to drive it's price down then at 220 pm they signal to buy it all back at the low price then signal to dump it all again at 245 etc.
What if there is a way (computer software) to immediately/instantly detect the volume spike of the wolf pack or institutional traders and follow/ride their trade in the same direction and then get out at the earliest indication of a reversal. Like hit and run. It will give you a huge edge and put odds in your favor.
Whenever these wolf packs trade, they leave an elephant foot print in the form of volume spike, which is accessible on any trading platform and cannot be hidden. Their trading strategy is called scalping and when the little traders follow the foot print of the wolf packs, it is called momentum trading.
Momentum trading if done properly with knowledge, disciple, and money management, can turn odds in your favor and win in the long run. The wolf packs almost always win, so when you ride/follow their trades, you also win more times than you lose.
Either way it is harm and some gains and the harm greater so avoid what looks easy perhaps you'll be successful.
EXCELLENT ADVICE bravo
I wouldn't advise anyone to start day trading with real money unless you have mastered it, and have the appropriate knowledge, disciple and money management skills. Always do paper trading first until you have mastered the skills involved. The learning curve is about 2 years and you need a teacher who is consistently successful and has mastered day trading.
95% day traders lose because they do not have the knowledge, disciple, money management skills and a system that really works. There are however 5% day traders who trade for a living and consistently make money. So it can be done.
Reminds of a family dinner conversation, my brother boasts with the right strategy on playing craps at the casino said he'll guarantee 60% return to which my sister who is CPA and CFO replied "if you work you'll get 100% "
Your sister is indeed very wise.
I theoretically mastered the game of craps by reading almost 20 books and know every possible system in craps including DC7 and doey don't system with progression and/or parlay. These systems are supposed to give you an edge, but when you actually do all the probability/odds calculations and take into account the vig of the casino, the odds are against you even with those systems. Those systems reduce the casino odds to almost negligible but still don't put the odds in your favor. That's why even though I am a world class expert in craps, I don't actually play it with money, because it is a losing game no matter what.
The 60% return your brother is boasting is impossible. One can have a winning streak short term just by chance, but in the long run his system will lose. He can test his system out in a computer simulation of craps and see if it makes profit in 100,000 rolls of dice. The odds will eventually catch up.
Peace
- Is making money by day trading gambling?
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Peace Fusion,
Thank you for sharing your personal story. It is somewhat similar to mine.
I have the most personal experience with trading in that I was attracted to it in the beginning , and then my life reaches to a point where nothing was there 24x7 except the concept of trading.
There was a point in my life at which I was also obsessed with day trading and couldn't think of anything else 24/7 because I wanted to master it.
I spent 3 years tried to find the code or a holy grail system that could work in my favor. I gave up many times and then started again. Went into fundamentals and then leaning and mastering the trading concept via technical analysis. Made some real good friends across the globe.
I spent 2 years doing the same. However I stayed away from fundamental analysis because it is useless in day trading. I focused only on technical analysis and I think I have finally found the code that works! It is based on instantly detecting volume spikes on a 1 minute chart and also based on previous day range breakout and 30 minute opening range breakout, also known as momentum trading on a 2 minute chart. Basically it is based on price, volume, support, resistance and exponential moving averages.
Your only nemesis in momentum or breakout trading is a FAKE BREAKOUT which occurs almost 50% of the time. I have found a way to avoid the fake breakout almost 80% of the time, thereby putting odds in my favor.
Opened an account with 20,000, lost 10,000 in one bad gold trade. Took 30 days to win back lost 10k trading with patience. Then lost again bit by bit. In the end I realize the most successful ones are the ones who manage to break even but I ended up losing 7k in total and then I decided to quit.
Very similar to my story. I also lost big in one trade in the beginning (in option trading which I avoid now, instead I focus only on stocks) because I violated the basic rules of day trading. I did not master day trading first by paper trades and jumped right into it with real money without having the full knowledge, iron discipline and money management skills.
I am curious what system/strategy you were using when you won back the lost money with patience.
Trust me it is worse than any addiction in the world; drinking, smoking, girls... none of em matches what Trading makes a man.. want it 24x7. I ended up writing heaps of codes and eas in programming, spent time in reading books, trying out different strategies, the ones that were success were related to point and figure charting. But in the end, It all adds up to zero .
Agreed that it can be very addicting. I had to exercise iron discipline and self control to prevent myself from getting addicted.
I have also read many books, listened to many seminars, and participated in trading forums. A friend of mine who I met on a forum custom programmed a code based on my system in thinkscript which runs on Think or Swim platform. I have a watch list of about 20 stocks which meet certain strict criteria, and the code instantly alerts me whenever there is a breakout on heavy volume or there is a volume spike in any of those stocks. It also automatically draws the support and resistance lines. Then I make the final decision as to when to enter the trade, only when some other criteria are met, which I haven't been able to program into the thinkscript.
I have extremely strict money management rules. I know the exact entry point, stop loss, 1st target profit, full exit strategy, and position sizing even before I enter the trade and aim for a 21 reward to risk. I don't put more than 0.5% of my trading capital on any single trade. I have iron discipline and follow my rules very strictly like a robot and don't let emotions, fear or greed influence/control me. I try to trade only in the first 2-3 hours then I'm done.
Using my system I have won more than I have lost with real money over a period of 3 months, but it took me almost 2 years to reach that point.
Of many friends I made, a very few like one or two were so called successful and those ones have been involved for a decade and they do it full time.
Did you find out what day trading strategy they use, whether it is reversal trading, momentum trading, breakout trading etc.? How do they determine their entry point, stop loss, exit strategy, and position sizing?
Trading has severely impacted my health, my personal life and my job. I am lucking that I had some sense left and I call it a day. I was lucking to be survived.
I hope you are feeling better now. I have been a little fortunate in that aspect because I found what works and didn't lose too much of my capital in the learning process. Additionally I don't spend too much time on it and do it only sometimes part time.
About the questions, yes it did come to my mind about being it gambling but then the way it is done and organized and needs your efforts into trading, (unless you are just a newcomer and wants to make 1million from opening a 5k account and bet left and right). I do not think it is sheer gambling.
I tend to agree with that. My only conflict is if it is gambling, but my system consistently puts odds in my favor so I don't consider it gambling. I think it is gambling only if the odds in your favor are 50% or less. I agree it is gambling if you start betting/trading blindly without any working system, knowledge, discipline and money management.
What I realized in the end is that those who are successful (the ones better than break even) are those who realized its failure and went into training. Those who opened websites, schools to teach trading. wrote algorithm and programs to sell EAs. Those who offer one on one coaching based on past data, are the ones actually making money.
One should be extremely careful and wary of most of these coaches or mentors. 90% of what they teach you does not work. Very few will tell you the real secrets. Those that charge a lot of money are invariably frauds. I learned most of what really works almost free. The real masters and those who are really successful and have a system that really works are busy trading and don't have time for coaching or making money though seminars. If their system really works, then why are the so called gurus not using it for trading themselves instead of teaching it to others?
One should also be wary of systems that claim success based on past data. What they do is design a system to fit the past data, which works on back testing and then start selling it, but fails in real time.
Since I learned the secrets for free, I will be more than happy to share my complete system for free with anyone who is interested. The only requirement will be not to trade with real money and do paper trades only until you have mastered it. I will also make no guarantees that it works. You judge its performance for yourself. Day trading is an art as well as science and even when you know a system that works, it can take years to master it. 2 people can be using the same exact system and have different results.
All is not lost, I ended up knowing about financials, accounting and data mining. I think it was hell of a journey for me but I survived-)
I am glad there is a silver lining in your story and thank you again for sharing it.
Peace
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Peace reel,
I know someone who is used to making $10,000 from it. But this person is millionaire and has other businesses also.
Looks like he is one of the 5% who consistently make money day trading. Will he/she be willing to share his/her system/strategy?
Gambling can be taken as pretty much anything that we go into without any knowledge and realistic view.
Agreed.
Peace
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Peace reel,
Looks like he is one of the 5% who consistently make money day trading. Will he/she be willing to share his/her system/strategy?
Unfortunately, no
And I don't think the loss ever makes any difference to him because of the huge amount sitting in his bank account.Some of my friends who studied accounting also chose that direction. Can't say if it all worked for them. But I did hear of them talk about learning how to do it with paper trading.
But no matter what is chosen don't put all your eggs in one basket. I believe in expanding investment and being conservative about it.
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It depends on the instruments..
If it's company's stocks.. (not currency or commodity futures etc..) I say it's beneficial for the entire ecosystem.
Whichever trading style (day trading or long term position trading)
And whatever will be the results for you (profit or loss)
What you do shall actually brings positive effect to the society.From your money, the company shall be able to make investment.
From the investment, new job opportunities will be created, new supplier will be required etc..
It will bring positive impact to the surrounding ecosystem.
Much better effect for the society compared to putting your money in your home or in the bank. -
Peace Jafar,
Thank you for your valuable comment.
I trade only company stocks. No commodities, currencies, options, futures etc.
Peace
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Peace reel,
But no matter what is chosen don't put all your eggs in one basket. I believe in expanding investment and being conservative about it.
Excellent advice bravo
Peace
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Peace dear readers,
Some forum members have expressed interest in learning how to day trade and learning my exact system so I will start a series of lessons about my system to benefit everyone who is interested. Please PM me if you have any questions and you do not wish to post here, otherwise you can post your questions here.
80% of day trading success depends NOT ON THE STRATEGY but on MONEY MANAGEMENT and IRON DISCIPLINE. You have to have impeccable money management skills and be able to follow all the rules exactly and not let emotions, intuition, fear or greed influence you. In other words, you have to be able to trade like a robot and not risk too much on one trade. This skill set takes long time to master and YOU WILL SUCCEED ONLY IF YOU HAVE MASTERED THIS ASPECT. You might have the perfect strategy but if you don't have money management skills and iron discipline to follow all the rules, you will lose. Remember, slow and steady wins in day trading. Making big trades, not getting out of the trade at your stop loss, or trying to get rich quick will ALWAYS backfire and result in huge losses which will be impossible to recuperate.
Therefore I will start with money management and discipline first. I will assume some familiarity with basic trading terminology.
LESSON #1
Do not even think about day trading with real money unless you have at least $25,000 or more set aside for day trading, excluding money that you have saved up for at least one year of your expenses. Until then just paper trade if you would like to learn the basics and master a particular system. If you trade with a trading account of less than $25,000 it will be difficult to control your emotions including fear and greed. Additionally, you will be making small dollar amount profit on a winning trade and commissions will be a higher percentage of your win.
Even if you have $25,000 or more set aside for day trading, DO NOT TRADE WITH REAL MONEY until you have mastered day trading by paper trading and are showing a consistent profit on paper. The learning curve is about 2 years.
LESSON #2
I recommend trading stocks for day trading and to stay away from commodities, currencies, options or futures. I will explain later how to pick out stocks for your watchlist based on strict criteria designed to minimize the advantage of the money makers, and to allow enough liquidity to be able to get your order filled instantly without slippage. The watchlist should not consist of more than 20 top stocks which meet all those criteria, preferably 10 top stocks. Out of the watchlist stocks, on any given day, none to 2 or more will be good candidates for day trading based on my day trading strategy. The smaller the watchlist, the easier to concentrate and focus on stocks that are good candidates for day trading on a particular day.
LESSON #3
POSITION SIZING AND CONTROLLING YOUR LOSSES.
This is a very important aspect of money management.
- DON'T RISK MORE THAN 0.5% OF YOUR TRADING ACCOUNT ON ONE TRADE.
This way you won't blow up your account unless you have 200 consecutive losing trades which is very difficult to do even for a novice.
For example if you have a trading account of $30,000 then you cannot risk more than $150 on one trade. If your risk to reward ratio is 11.5 then you will be risking $150 to win $225. For a trading account of $100,000 you can risk $500 on one trade. In this case you will be risking $500 to win $750.
- CALCULATING NUMBER OF SHARES TO BE TRADED.
The number of shares to be traded depends on your stop loss. I will explain how to determine entry price and stop loss price in a later lesson. You have to know your entry point and stop loss BEFORE you enter the trade and you HAVE TO GET OUT when your stop loss is hit NO MATTER WHAT. This is the iron discipline part.
Let's assume you are going to trade a $50 stock long (i.e. you are going to buy the stock to enter the trade) and based on my system you calculate the stop loss to be 30 cents ($0.30) below your entry price. So you will exit if price goes down to $49.70. You have a trading account of $30,000 so you can risk only $150 on one trade (0.5%). Here is how to calculate the number of shares you can buy so that you risk only 0.5% if you hit your stop loss
Number of shares = (trading capital x 0.5%) divided by stop loss in dollars
In our example
Number of shares = (30,000 x 0.5%) divided by 0.3
Number of shares = $150 divided by 0.3
Number of shares = 500So if you enter the trade with 500 shares, and you hit your stop loss of $0.30 (exit price $49.70) you will lose $150, which is 0.5% of your trading account.
You should practice this over and over until you master calculating position sizing in your head.
For homework, what will be the number of shares traded
- Trading account $45,600 and stop loss $0.38, risking 0.5%
- Trading account $25,000 and stop loss $0.16, risking 0.5%
- Trading account $33,000 and stop loss $0.11, risking 0.5%
You can round up or round down the number of shares to nearest fifties or hundreds.
Once you have mastered this then you can proceed to next lesson.
TO BE CONTINUED ..............
Peace
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Peace dear readers,
Your homework
Please study the following 2 books about basics of day trading and to familiarize yourself with various terminologies and concepts. This will help you understand my system better.
http//www.forexfactory.com/attachment.php?attachmentid=822302&d=1320297242
https//books.google.com/books?id=x3_iUt43xt8C&pg=PP4&source=gbs_selected_pages&hl=en#v=onepage&q&f=false
Read as much as you can for free on google books from the 2nd book and that should be enough. You don't have to buy the book.
Peace
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I think speculation is a bad thing. These kind of transactions create bubbles and have created bubbles in the past.
When those bubbles burst, people lose their homes to the bank etc. People who never traded on the markets suffer the consequences of a practice that is motivated by greed for money and total disregard for anyone else.
Looking back at the latest bubble that bursted, thousands and thousands of people in the US lost their homes to the bank because of this type of speculation. When the bubble bursted those getting rich from speculation already cashed in. It's evil, it should be illegal and I'm pretty sure anyone involved in such a thing will get his/her punishment sooner or later.
For me it's equal to GAMBLING. A prostitute working for money is in my eyes doing a more respectable job than a daytrader. There are halal ways for trading but day trading by definition is excluded from that. Daytraders are not making long term investments. No one is benefiting from a daytrade but the daytrader. It is 'easy' money made by speculation/gambling, interestingly the root of the word used to denote gambling in Quran has the word 'ease/easy' in it.
Relating this to salat how does daytrading fit into that picture? Salat involves altruism, doing things for the benefit of all while expecting naught in return. Trees do their salat
"Trees create immense negative pressures of 10's of atmospheres by evaporating water from nanoscale pores, sucking water up 100m in a state where it should be boiling but can't because the perfect xylem tubes contain no air bubbles, just so that most of it can evaporate in the process of absorbing a couple molecules of carbon dioxide. Now I didn't mention the cohesion of water (that it sticks to itself well) but this is implicit in the description of negative pressure, strong surface tension etc."
Trees pump up water with an ingenious system of nanoscale pores allowing the water to reach the very top of its branches. Almost all the water a tree pumps up in it's efforts, it releases back to the environment, creating atmosphere.
Now how does daytrading fit into a Quranic context? You earn money you don't have to do anything for but click some buttons on your screen. There is no return for society in it. All of it is self-centered. Do you think you can compensate such lack of salat by doing zakat in good old sectarian fashion?
Peace
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Peace runninglikezebras,
Thank you or your input and one hundred percent agreed that speculation is a bad thing.
This is why I don't buy and hold stocks for long term or do swing trading because that is pure speculation and subject to huge overnight crashes and gap downs where even stop losses don't work. Buy and hold strategy almost always loses in the long run no matter how good you are, unless you are very lucky to have bought at the right time or have insider information. There is no way for a retail trader (small fish) to determine the right time to buy with low risk in a long term buy and hold strategy.
Day trading can be pure speculation when you don't know what you are doing, and have no discipline or money management. That is why 90-95% day traders lose because they trade blindly, with no trading plan, discipline and money management. It is definitely not easy money.
On the other hand if you know what you are doing, and have the necessary iron discipline and money management skills then day trading is not pure speculation. You also don't have huge gap downs in day trading and you always get the opportunity to get out fast if you start losing, provided you are trading the right stocks which meet certain criteria. You still have to work very hard to identify such trades and execute them properly so it is not easy money at all. Sometimes you have to sit for the whole day with extreme concentration waiting for the right setup and you still might not find a single trade. Sometimes you have 2 or 3 losses in a row before winning which can be extremely stressful. Definitely not easy money.
There are 5-10% day traders who consistently win over their entire career. According to probability laws, pure speculation cannot result in consistent wins over an entire career. Pure speculation is when there is 50% or less odds in your favor, but if you can find low risk trades and have iron discipline and money management then you can have 60-80% odds in your favor and you will consistently win 6-8 out of 10 day trades. In the 2-4 out of 10 day trades that you lose, you can use money management with discipline and get out fast. This way you can consistently win, and it is not pure speculation.
Day trading is governed by human psychology which is predictable. There are price support and resistance areas and certain set ups or patterns where price direction is predictable with a high percentage and day trades can be carried out with low risk. There is a way to identify those low risk trades and it is not pure speculation anymore.
If you drive recklessly then it is pure speculation that you won't get into an accident and most likely you will get into an accident and get injured. But if you drive carefully, have a knowledge of the streets of the area and the speed limits, wear a seat belt, and don't drink and drive then the odds of you getting in an accident and getting injured are very low and driving is not pure speculation anymore even though the odds of an accident are still not zero. Otherwise you shouldn't even drive because it is speculation that you won't get into an accident. You shouldn't even walk because you are speculating that you won't slip and fall and break your hip.
There is also another way to identify low risk trades in day trading. The institutional traders and wolf packs (big fish) sometimes gang up and make huge trades which makes the stock price move in a certain direction with 100% predictability and then exit their trades thereby winning 100% of the time. There is a way to identify such activity instantly and the little fish can follow/ride the big fish trades and make money with near certainty. This also is not speculation anymore.
Day trading does circulate money in the society even if for just a few minutes or hours which benefits the society as Jafar pointed out. In regular trading I can buy something cheap and immediately sell it at a profit and make money. Isn't that very self centered? To be altruistic, the trader should sell it for the same price that the trader bought it for and not take advantage of others by making a profit. That makes regular trading bad also right?
Of course if one makes money in day trading one should be charitable and help others thereby contributing towards betterment.
I, however, agree that pure speculation is very bad and it is gambling and one should stay away from pure speculation by making day trades blindly without any trading plan, discipline and money management or buying and holding long term.
Peace
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I think speculation is a bad thing. These kind of transactions create bubbles and have created bubbles in the past.
When those bubbles burst, people lose their homes to the bank etc. People who never traded on the markets suffer the consequences of a practice that is motivated by greed for money and total disregard for anyone else.
Bubbles in economy is a natural phenomenon
When there's a boom there will be bust..
When there's a bust there will be boom.
The central bank / financial authority is the one who are responsible to manage the cycle..
Put a brake to slow down the boom and put on the gas pedal when there's a bust.Looking back at the latest bubble that bursted, thousands and thousands of people in the US lost their homes to the bank because of this type of speculation. When the bubble bursted those getting rich from speculation already cashed in. It's evil, it should be illegal and I'm pretty sure anyone involved in such a thing will get his/her punishment sooner or later.
You are referring to "Subprime mortgage crisis"?
It's a totally different issue and it has nothing to do with stock trade..
It has a lot to do with cheap mortgage which lead to property's price bubble.. read the property price is over valued..People are PILING UP on valuable properties (Homes, Apartments, Offices, Lands) which they didn't use at all..
And it blocked the access for people who really need a place to stay as their home.
As the price for home and apartment were increasing to the insane level due to the bubbles...It's much better for people to pile up on non-valuable item (such as Cash or Money or Stock) compared to piling up on properties..
In this sense I support the "Socialist Government" who declared that all land belong to the state and the citizen can only "lease" or "rent" for certain period of time (e.g. max 99 years).
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Bubbles in economy is a natural phenomenon
When there's a boom there will be bust..
When there's a bust there will be boom.
The central bank / financial authority is the one who are responsible to manage the cycle..
Put a brake to slow down the boom and put on the gas pedal when there's a bust.You are referring to "Subprime mortgage crisis"?
It's a totally different issue and it has nothing to do with stock trade..
It has a lot to do with cheap mortgage which lead to property's price bubble.. read the property price is over valued..People are PILING UP on valuable properties (Homes, Apartments, Offices, Lands) which they didn't use at all..
And it blocked the access for people who really need a place to stay as their home.
As the price for home and apartment were increasing to the insane level due to the bubbles...It's much better for people to pile up on non-valuable item (such as Cash or Money or Stock) compared to piling up on properties..
In this sense I support the "Socialist Government" who declared that all land belong to the state and the citizen can only "lease" or "rent" for certain period of time (e.g. max 99 years).
Bubbles are not always natural phenomena (read not always tied to economic recession or whatever). The modern day bubbles are 99% caused by speculation. Short term strategy speculation.
I have degrees in economics and have worked in the financial sector for many years. I'm not here to debate economical theories. If you were qualified in economics you would realize the "subprime mortage crisis" was caused by an extreme form of speculation (derivatives market) and had nothing to do with a natural collapse of the housing market.
Truthseeker uses a strawman argument saying he isn't gambling because he is doing a lot of research and knows what he's doing. Well I know how companies do their accountancy and even knowing their balance sheets to the very details, it will not provide a guarantee it reflects the financial status of that holding. Those figures can be manipulated in zillions of ways. As such it remains gambling.
Peace
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Peace runninglikezebras,
Well I know how companies do their accountancy and even knowing their balance sheets to the very details, it will not provide a guarantee it reflects the financial status of that holding. Those figures can be manipulated in zillions of ways.
What you are talking about affects long term buy and hold strategy which is why I stay away from long term buy and hold. The beauty of day trading stocks is that financial status of a holding does not matter. Day trading depends on technical analysis not fundamental analysis. In day trading you go with the short term flow, and don't care what the actual financial status of the holding is.
Day trading is about EXTREMELY SHORT TERM HUMAN PSYCHOLOGY which is very predictable and causes price direction to be predictable at certain support resistance areas and under certain setups and patterns resulting in low risk trades. The skill is in identifying those support resistance areas, setups and patterns and then entering those low risk trades with proper money management and discipline. This is not speculation/gambling anymore.
I agree that subprime mortgage crisis was caused by speculation in derivatives market such as options, futures, CMOs, warrants etc. Derivatives are pure speculation which is why I stay away from any kind of derivatives trading.
Peace
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Peace runninglikezebras,
What you are talking about affects long term buy and hold strategy which is why I stay away from long term buy and hold. The beauty of day trading stocks is that financial status of a holding does not matter. Day trading depends on technical analysis not fundamental analysis. In day trading you go with the short term flow, and don't care what the actual financial status of the holding is.
Day trading is about EXTREMELY SHORT TERM HUMAN PSYCHOLOGY which is very predictable and causes price direction to be predictable at certain support resistance areas and under certain setups and patterns resulting in low risk trades. The skill is in identifying those support resistance areas, setups and patterns and then entering those low risk trades with proper money management and discipline. This is not speculation/gambling anymore.
I agree that subprime mortgage crisis was caused by speculation in derivatives market such as options, futures, CMOs, warrants etc. Derivatives are pure speculation which is why I stay away from any kind of derivatives trading.
Peace
Your technical analysis is nothing more than someone with a strong mind for maths during a game of poker calculating odds. You know this is true. It is gambling. With any daytrade activity you are at risk of losing your investment entirely. What you are doing is like any good gambler assessing the risks and manage them. Not different from someone betting on a horse race, assessing his risks by not betting on one race - spreading the risks to reduce it to a minimum but never zero. High risk = high return, low risk = low return. So how does this reasoning differentiate you from someone who is gambling?
Peace
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It's evil, it should be illegal and I'm pretty sure anyone involved in such a thing will get his/her punishment sooner or later.
Hmm, I tend to agree. *nod
I prefer ordinary trading (buying and selling the real things/products), I think it could be fun and enjoyable if done with passion. Therefore, I prefer to sell the things I like.
A prostitute working for money is in my eyes doing a more respectable job than a daytrader.
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Peace All.
Ask youeselves this simple question
Is it a just or unjust trade?
Let us use some "good logic" and compare this to honest trading
26182
"You shall weigh with an equitable scale.26183
"Do not cheat the people out of their rights, and do not roam the earth corruptingly.26184
"Reverence the One who created you and the previous generations."This kind of trading sounds "corrupt" to me?
It is a form of gambling!!!
Such trade never prospers.
Once we slip and start to compromise any of God's teachings, it is a given fact that we will gradually start earning a sin through the unrighteous choices and actions.
Our feet start to settle in a dangerous zone. If we do not recognize our deviation and allow God's ethics to be in full control again, we face the consequences for our own choices.
We are cheating others to earn money we do not deserve!!!!785
To Midyan we sent their brother Shu`aib. He said, "O my people,serve/ worship God; you have no other god beside Him. Proof has come to you from your Lord. You shall give full weight and full measure when you trade. Do not cheat the people out of their rights. Do not corrupt the earth after it has been set straight. This is better for you, if you are believers.You may well ask how are you cheating people out of their rights?
Think about it ! Some companies with hard workers in them are going bust because of such trading!
This is my opinion.
GOD bless you all.
Peace. -
Peace runninglikezebras, all,
Hard workers in companies go bust due to poor management and the poor choices made by the owners, which is the real reason behind why 95% of businesses fail.
Your technical analysis is nothing more than someone with a strong mind for maths during a game of poker calculating odds. You know this is true. It is gambling. With any daytrade activity you are at risk of losing your investment entirely. What you are doing is like any good gambler assessing the risks and manage them. Not different from someone betting on a horse race, assessing his risks by not betting on one race - spreading the risks to reduce it to a minimum but never zero. High risk = high return, low risk = low return. So how does this reasoning differentiate you from someone who is gambling?
I have already explained in my previous posts how gambling such as casino games is different from day trading but perhaps you haven't read those posts, so I will explain this difference to you in detail.
There is a HUGE difference between gambling such as casino games and horse racing, and day trading. In regular casino games and horse racing, the odds are NEVER CONSISTENTLY in your favor. You cannot put the odds in your favor no matter what strategy you use; you can only minimize the house edge or the odds against you. The odds are always less than 50% in your favor. You can have a short term streak of wins due to luck but you can NEVER consistently win. Therefore it is gambling.
You cannot reduce the total risk to a minimum in casino games or horse racing by any strategy; you can only reduce the house edge without completely eliminating the house edge but you can never reduce the total risk to below 50%. Your risk is still more than 50% no matter what. For example if the odds are 52% in the house's favor and 48% in your favor, the house edge is 4%. You can reduce this 4% by the proper strategy, but the odds against you (the total risk) is always greater than 50%. You are confusing house edge with total risk.
http//vegasclick.com/gambling/houseedge
http//wizardofodds.com/gambling/house-edge/
You CONSISTENTLY lose money (average loss) in casino games and horse racing. There are no tools, plans or strategies allowed by casinos and gambling establishments that can CONSISTENTLY win money in the casino games or horse racing. In day trading you can CONSISTENTLY win money with the right tools and trading plan.
I am an expert in poker, yet cannot even think about playing it because I know the odds against me and I know I cannot put the odds CONSISTENTLY in my favor no matter what I do. You are forgetting the VIG charged by the house in poker. The winnings distributed to the players is a small part of the total money pool collected which puts the odds heavily in favor of the house and heavily against the players, and there is nothing you can do about it. Even when you win you are robbed by not being given the money according to the real odds.
http//experience.usatoday.com/las-vegas/story/best-of-vegas/2014/04/07/gambling-odds-house-rules/7417029/
Day trading is different in that the odds ARE CONSISTENTLY in your favor if you employ the right trading plan, money management and discipline. The odds are CONSISTENTLY in your favor (more than 50% in your favor) with the right tools. Therefore it is not gambling. In regular casino games and horse racing the odds are NEVER CONSISTENTLY in your favor EVEN IF YOU EMPLOY THE RIGHT TOOLS. Mathematical analysis of the games has proven this. Otherwise the day someone can CONSISTENTLY put the odds in their favor, the casino games and horse racing will be shut down and the casinos will be out of business. This is why card counting is banned in casinos for Blackjack because it CONSISTENTLY puts the odds in your favor, and this is why casinos have a team of brilliant mathematicians working for them.
Day trading is exactly the same like regular trading. There are odds against you in regular trading also and you are at risk of losing your entire investment in regular trading/business also but you can put the odds CONSISTENTLY in your favor by choosing the right product, doing the right kind of marketing in the right way, managing your business properly etc. (trading plan). Even then YOU CAN LOSE YOUR ENTIRE INVESTMENT in regular business, so you can minimize the risk but not eliminate it completely. Businesses go bankrupt all the time. 60% or more of new restaurants opened in USA go out of business in first year and a staggering 95 percent of businesses will close their doors before they hit their fifth year of operation. Just like regular trading, with the right trading plan in day trading you can CONSISTENTLY put the odds in your favor i.e. more than 50% in your favor. Therefore day trading is not gambling otherwise regular trading/business is also gambling.
http//smallbiztrends.com/2013/03/infographic-failed-small-businesses.html
You buy actual oranges to sell in your business. You are speculating about oranges that you will be able to sell them for a profit and therefore taking a risk. Soon after you buy oranges, there is suddenly an overabundance of oranges in the market due to which prices fall drastically. You sustain severe loss because the prices don't come back up before the oranges go bad, or you sell them for a loss. According to your viewpoint there was speculation involved and risk was taken so this would be gambling right?
Peace
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Bubbles are not always natural phenomena (read not always tied to economic recession or whatever). The modern day bubbles are 99% caused by speculation. Short term strategy speculation.
Bubbles and bust is a natural phenomenon in market based economy.
Except in the "Controlled / Planned" economy, such as the great old Soviet Union.
Within "Controlled / Planned" economy the government will say it's always bubble while the (dissatisfied) people will always say it's always bust.I have degrees in economics and have worked in the financial sector for many years. I'm not here to debate economical theories.
So am I... nonetheless it has nothing to do with the subject being discussed..
If you were qualified in economics you would realize the "subprime mortage crisis" was caused by an extreme form of speculation (derivatives market) and had nothing to do with a natural collapse of the housing market.
You failed to see the underlying phenomenon of subprime mortgage crisis.
It was triggered by property boom which lead to property bust.
It has happened elsewhere in the world many times, not only in the US.
It never happened in Soviet Union (for example) because all properties were owned by the state.When property ownership are granted and not being limited.
And there's an easy way for people to buy it.. (e.g. aggressive mortgage loan)
Everyone will stock up properties, up to the point that the price is not 'reasonable' anymore.
And the bust (corrective force) will come and the property price goes down...
In parallel people who took the mortgage cannot pay up the loan which they bought at insanely inflated price..
Afterwards a domino effect happens..If you disagree, feel free to change the description on the wikipedia page.. and have our debate there..
https//en.wikipedia.org/wiki/Subprime_mortgage_crisisTruthseeker uses a strawman argument saying he isn't gambling because he is doing a lot of research and knows what he's doing. Well I know how companies do their accountancy and even knowing their balance sheets to the very details, it will not provide a guarantee it reflects the financial status of that holding. Those figures can be manipulated in zillions of ways. As such it remains gambling.
Everyone put a risk on something.. (relationship, business etc..)
And not all risk are so-called 'bad gambling'..
Something qualifies as "bad gambling" when- The deed doesn't provide positive effect to the society
- The deed provide more negative effect to the society (conflicts, laziness, destruction, slavery)
Playing poker game is a good example of bad gambling.. it doesn't provide any positive effect to the society and it cause conflicts between the losing party and the winning party. (Zero Sum Game). The losing party shall become poor while the winning party shall become richer, at the expense of other people become poor.
It's similar to Robbery, Raids or Invasion.. (including the invasion of the Islamic Arabs to it's surrounding area 1400 years ago and also the current invasion of Saudi Arabia to Yemen) where the winner took the "War Booty" from the loser or much worse enslave the loser (Zero Sum Game) with many destruction within the process.
Salam / Peace