Making money from home by day trading
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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
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Those who are making money will not agree with your references in the direction that trading is corrupt.
And those who lost fortune will have a reconciliation feeling after reading your post. -)I think every one is judged based on his/her internal true consciousness. Deep down there in every trader, there has to lie the truth, is it gambling or not. I think he will be judged based on that niyaa.
On the surface we actually see 95% of people losing money in trading and to the point that it affects their families and they lose hard earned money which could have been put to better use for their families.
There are more bad things. Last week dow jones lost 1000 points at the opening
then there was a recovery of 400 points. Of course in between many poor folks must have margin call on their accounts but then again it goes back to how you trade.http//mashable.com/2015/08/24/us-stocks-teeter-on-meltdown/
In the same week people lost billions.
http//www.arabnews.com/economy/news/796611
Any one interested watch this movie
http//www.imdb.com/title/tt0094291/
I still think it is dangerous game and not for every one for sure.
Cheers
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 dear readers,
Hopefully you have finished studying the following 2 books to learn about basics of day trading and to familiarize yourself with various terminologies and concepts.
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
Basically there are only 3 day trading strategies
- Breakout or Momentum trading.
- Retracement or Pullback trading.
- Reversal trading.
RANGE BREAKOUT AND RETRACEMENT TRADING
My day trading system is based on a fusion of breakout and retracement strategies. The entry point is after stock price goes above or breaks out above resistance or goes below or breaks down below support. The biggest weakness of breakout trading is fake breakout or false breakout or "fakeout" which occurs about 50-60% of the time. My system uses some clever techniques based on volume and volatility to avoid most of the fake breakouts, thereby reducing the likelihood of entering the trade in a fake breakout to less than 50% and putting the odds in our favor by greater than 50%. This is followed by identifying a low risk entry point after a confirmed breakout, and incorporating money management strategies, which improves the odds to about 60-80% in our favor if done properly.
Your next homework is to study the following free information to understand the concept of breakout trading. This information will make it easier to understand my day trading system. Please do not buy or subscribe to anything if advertised in these links; just understand the concepts
http//www.stockchartpatterns.org/Stock-Breakout-Profits-System.pdf
http//www.hardrightedge.com/tactics/breakouts/falsebreakouts.htm
http//www.tradewithprecision.com/files/Coverstory.pdf
https//m.youtube.com/watch?v=b0bPL00SyCY
https//m.youtube.com/watch?v=Q07u9gszyGA
https//m.youtube.com/watch?v=b2wl4OTwaFg
http//wealthv.com/articles/PDFs/TradingThe10OclockBulls.pdf
http//www.marketgauge.com/open-ebook/TheOpeningRangeHandbook-Part1.pdf
http//www.investopedia.com/articles/trading/10/3-reasons-not-to-trade-range-breakouts.asp
My system addresses all 3 weaknesses of range breakout trading.
You can also study the following to understand concepts and terminologies used in my system in more detail
SUPPORT AND RESISTANCE
http//www.investopedia.com/university/technical/techanalysis4.asp
http//stockcharts.com/school/doku.php?id=chart_schoolchart_analysissupport_and_resistance
IMPORTANCE OF VOLUME
http//www.investopedia.com/university/technical/techanalysis5.asp
STRONG CHART PATTERNS
If a breakout is preceded by some of these chart patterns especially the continuation patterns, it will less likely be a fake breakout and will increase the odds of your success.
http//optionalpha.com/13-stock-chart-patterns-that-you-cant-afford-to-forget-10585.html
http//www.investors.com/images/editimg/ibded/BaseCheatSheet.pdf
http//stockcharts.com/school/doku.php?id=chart_schoolchart_analysischart_patterns
http//www.investopedia.com/university/technical/techanalysis8.asp
IMPORTANT CANDLESTICK PATTERNS
http//www.swing-trade-stocks.com/candlestick-patterns.html
http//www.investopedia.com/articles/technical/02/121702.asp
http//www.investopedia.com/articles/technical/03/010603.asp
http//www.investopedia.com/articles/technical/03/020503.asp
MOVING AVERAGES
http//www.investopedia.com/university/technical/techanalysis9.asp
POWER OF T-LINE OR 8 EXPONENTIAL MOVING AVERAGE
http//www.candlestickforum.com/PPF/Parameters/10_6735_/candlestick.asp
AVERAGE TRUE RANGE (ATR)
http//www.investopedia.com/terms/a/atr.asp
http//www.investopedia.com/articles/trading/08/atr.asp
AVERAGE DIRECTIONAL INDEX (ADX)
http//www.investopedia.com/terms/a/adx.asp
http//www.investopedia.com/articles/trading/07/adx-trend-indicator.asp
RETRACEMENT VERSUS REVERSAL
http//www.investopedia.com/articles/trading/06/retracements.asp
I do not use Stochastics, RSI, Bollinger Bands, Fibonacci tools, or any other indicators in my system. Use of Candlestick patterns is optional. The goal is to keep it simple and easy to understand and execute.
Once you have studied all this material thoroughly and have understood it, you can pm me for my complete day trading system and trading plan, which I will be glad to share with you for free.
Peace
