Can you make a living from the stockmarket?

[suzanne]

Hi All,

I am also new to this forum and have only been investing in the stock market for about a year and a half. I have read all the basic books and read every magazine I can get my hands on, such as Personal Investor, Shares, BRW, Your Trading Edge and buy the Fin. Review nearly every day.

I am now reading Technical Analysis books such as Guppy and Bedford.

We have invested mostly in property over the past 4 years and built up a good portfolio and we have some money to invest and would like to put it into shares hopefully to bring in a weekly income .

Now my two questions are - as we have fairly recently moved to another state and haven't got jobs at the moment - can one make a living out of share trading and about how much - if any one doesn't mind answering- just an estimate would be great? I realise it depends on the individual but are there any benchmarks to go by or statistics?

I realise as there are so many people involved in the industry there must be money to be made but is it sufficient to live on as a sole income.

Also the other day I went to a share market seminar where they showed us a software trading tool that gave Pre-alerts of when large volume of traders were purchasing a particular stock and this allowed you to get in before prices went up. Does anybody have an idea what it is called ( I thought it was market analyser ??) and/or could they recommend a good software program to use. Also is it necessary to have such a program to trade successfully.

Looking forward to any replies,

Cheers

suzannne

 

[japer]

Re: Can you make a living from the stockmarket

Hi Suzannne,

I asked the same question myself and we are in a bit of the same situation and recently one company here in Australia contacted me and offered me their start trader computer program. MCI technology is the name of the company which is based in Queensland you can visit their website and this is the URL http://www.mcit.biz , the cost to purchase the software is 9,500 AUD and way too expensive. I do not know if anyone heard about this company and I do not know their background. Let me know if you find some info about them.

Regards,
Japer

 

[still_in_school]

Re: Can you make a living from the stockmarket

Hi Suzanne,

you will find many of the members on here, are of different levels of share trading/investing level or background.

personally for me, share trading is my own source of income, not only is, share trading just investing and trading, but i treat it like a business, like many others do, who are real serious about there trading or currently enjoying the bull run, where having.

though i've heard of black boxs and all, that tell you to buy and sell... if this was true, we would all be millionaires...

bit of technical, fundamental analysis is all you really need to understand, than spending many $$$ in these black box systems, a good broker, who can give you full service, maybe a good option as well...

Cheers & Happy Trading,
sis

 

[stefan]

Re: Can you make a living from the stockmarket

Also is it necessary to have such a program to trade successfully.

No. You don't need any "magic" software to become a successful trader. It all depends on what sort of trading strategy you're following. If you are a technical analyst then you probably need some sort of charting software but there are many free or reasonably priced versions available.

we have some money to invest and would like to put it into shares hopefully to bring in a weekly income .

I have some doubts that this is going to be possible without being a rather experienced trader. Generating a weekly income would mean you'd have to buy and sell A LOT of shares per day to achieve this goal. If you don't have the experience you will find yourself buying and selling frantically trying to make a profit before Friday only to find that after tax there isn't much left. I have never found the Australian Market liquid enough to achieve this goal. You'd have to look into foreign markets (especially NASDAQ) where prices are moving quicker and within a larger range. Don't forget, shares are a long term investment and as such you are up against this principle, trying to get a weekly income. I was a daytrader on the NASDAQ for a few years and I've switched to longterm investment on the ASX to get my life back

If you have a cash reserve that you can live off then you might not need to create a weekly income, allowing you to build a solid portfolio that will hopefully return you a nice yearly salary. Weekly? I don't know... I really don't see it happening. It's a bull market and everybody is in a frenzy to get into shares these days. It all looks too easy and you may get lured into a false sense of security.

Just my way of thinking. Maybe other members have some more upbeat comments to make regarding a weekly income on the ASX.

Have a nice weekend

Stefan

 

[brerwallabi]

Re: Can you make a living from the stockmarket

Yes you can make a living and a very good one but there are a few differant ways i.e daytrading and investing, right now with good research in a bull market its almost like the Midas touch but be warned its not always like this and to be a newcomer to professional trading and find yourself trading in a bear market with little experience can be quite daunting and financially ruinous.I have day traded from April to early October this year and yes found myself in situations where income even after CGT would be taken account far exceeded my previous jobs however to be in this situation it was becoming almost 10hrs (incl research) a days sat in a chair watching screens. Not every trade was successful and sometimes a big loss did occur. For me I found it changed my lifestyle. I became engrossed by the markets and was oblivious to family and friends. I decided to take full time employment again and to go back to shortterm and long term investing rather then daytrading although now I am still making some money there is no daily stream. My income this way will come through some divedends and some improvement in the share price, it might still be possible that the income this produces may be enough to live on. It also depends on how much money you are prepared to play with, I mean invest.
$50,000 purchasing shares @ $1.10 for example and then selling @ $1.12 gives you a $909 profit now take tax and brokers fees and your left with about $425 profit, you will need to do that every day what happens when the price goes down do you sell at a loss or wait, it could go down even further, your capital is decreasing and other opportunities are lost. Play with $100k profits increase/losses increase etc. Buy blue chips and sit back, divendends coming in some good capital gain like Wesfarmers, whoops NAB (or your portfolio) loses $5.00 your $100k has just became $84k or your $500k has became $420k. Market falls same thing. Yes you can make a living good luck.

 

[The Barbarian Investor]

Re: Can you make a living from the stockmarket

I think it depends on Time available, Knowledge level and funds available?

A Full time intraday share trader may require $100 000 and 'work' 5 days a week, maybe only $50 000 for a intraday derivatives trader.

I'm more comfortable being a part time positions trader/investor and still learning, spending 5hrs + a week at this, i believe even an end of day part time trader would need 2hrs a night/ 10hrs per week?

A lot of my learning is taking place on this site,from more experienced investors..who can maybe steer me away from mistakes they ave made when starting.

i've been told that entering the market with less than $10 000 is not really worth it due to brokerage fees/risk/funds management.


Is it worth 'playing' the Penny Dreadfulls? I don't think so for someone with my limited trading knowledge..even have a look at the'picks' of some more experiencedinvestors here (Stock Picking Comp), you ca't get it right 'every time (LEGEND STATUS)

The Barbarian Investor

 

[still_in_school]

Re: Can you make a living from the stockmarket

Hi Barbarian Investor,

it really depends, personally i like putting big quads of money into blue chip stocks that are either rangeing or trending, the reason being is, the need for liquidity and piece of mind at night when sleeping.

though for day trades - option trading and cfd's (cfd's depending, on open interest and the spread amount) are favourites for both shorting the market and going long, but can be excellent intraday trades, or even over night trades, but also there leverage ability.

warrants are also favourites, but personally i look at them more as a superfund, or a longer term asset, but mainly there traded on a medium term timeframe, but are traded for dividends (dividend capture), but because of there long dated time decay, leverage effect + dividend payout... (i much prefer to buy stocks for there dividends, via warrants).

though overall, i woudn't say you need huge amounts of money in the stock market, the bigger the money you have the more different stocks you can hold, but also, there is tendencey to hold more blue chip stocks, due to the volume, liquidty, but due to the less adverse risk associated, than putting large amounts of money into speculative positions.

Cheers,
sis

 

[suzanne]

Re: Can you make a living from the stockmarket

Hi All,

I would just like to thank you all for replying. You have certainly given me something to think on.

I'll keep reading the messages and I know I will learn a lot.

I have found keeping in touch with property investing forums one can learn lots of new ideas and that is my aim here as well.

Thanks again,

Cheers

suzanne

 

[idribble]

Re: Can you make a living from the stockmarket

DON'T buy software programs that tell you what orders to put in or what stocks to buy. If they were that good why are they being sold for a pittance?

i ain't a newbie to the sharemarket.

 

[tech/a]

Re: Can you make a living from the stockmarket

dribble's.

While I agree with you in principal,I have a method which I have given to the general public for ZERO/ZIP/FREE/Gratis.

Im a nice guy!

(I do have an alteria motive though and its that having developed a method that has proven profit becomes a handy tool when questioning developers of "Black Boxes" who invariable ask why I dont do it myself asking all those difficult questions.------voilla)

Its Traded live on the net and has returned in the test case on the net around 430% on initial investment in 2.5 yrs.
My own portfolio has returned a little over 200% in that time( traded different stocks than the test case (Damn!) and I know of around 15 other users or bastardisations of the original, who are returning the same sort of figures--------so they are out there.

Why am I not selling it???

I dont want to as it was developed to answer the question CAN IT BE DONE. IE Can traders not in the industry develope and trade a mechanical system and trade it to profit--------the answer is a resounding ---YES

We've been doing it here for 2.5 yrs------

http://www.reefcap.com/ubb/Forum8/HTML/000390.html

My personal opinion is that most traders are undercapitalised

They want to turn $20K into 100K a year-aint going to happen!!!
What return would a business costing $20K nett-----

However if trading or buying a business worth $250K then the return would be very different.
30% on 20K which is very achievable is $6k hardly a living.
30% on $250K is $75K---------you see my point!

tech

 

[idribble]

Re: Can you make a living from the stockmarket

tech / a ..... i see your point.

my point, in answer to the original post, is that there is NO EASY WAY to make money on the stockmarket, certainly not paying $7k for a foolproof system. most / if not all are a con.

 

[idribble]

Re: Can you make a living from the stockmarket

i've looked at your list and like what i see. you would be fairly quiet in a bear market i would guess, which is good!

correct me if i'm wrong but wouldn't buffett's style have come up with a similar list?

 

[tech/a]

Re: Can you make a living from the stockmarket

Dribbles I dont know I only know of Buffet and some of his thinking which was based on finding "True" undervaluation with a view of buying the controlling interest.We dont do that!

The list is the one I put up as picks.They are not selected in the same way as those in the system (Tech Trader) are.

Still selection of universe has a great effect on trading result as Im sure you know.

 

[Jett_Star]

Re: Can you make a living from the stockmarket

To tech/a

"selection of universe has a great effect on trading result as Im sure you know".

Please explain. Selection of the universe?

 

[tech/a]

Re: Can you make a living from the stockmarket

Jet.

The stocks you trade are your univrse of stocks.

Most have a blanket approach.They will use the whole ASX.

However if you spent the time to weed out either technically of Fundamentally those stocks with least chance of performance,then your chances of success rise dramatically.

You may have heard of the "Top Down" Approach
Simply this means choosing the index with the best performance and trading the stocks within that index which are performing best.

Thats one method(Not one I like) but illustrates the idea of selecting a universe of stocks.

I trade on Margin and BT (Bankers Trust) have a list of stocks they allow to be traded.These are my universe.
There are many ways of selecting YOUR universe of stocks.It could be ONE stock!

 

[potto_10]

Re: Can you make a living from the stockmarket

my uncle has made a living from the stock market.

when he was young he invested small amounts in blue chip companies and never really sold them...

now he has so many shares, in many blue chip companies, and he sold the majority of them, and now invests in manged funds..some conservative and some growth, etc. he has just kept growing his balance sheet from there

 

[malh786]

Re: Q for Tech/A - re: Can you make a living from the stockmarket

My personal opinion is that most traders are undercapitalised

They want to turn $20K into 100K a year-aint going to happen!!!
What return would a business costing $20K nett-----

However if trading or buying a business worth $250K then the return would be very different.
30% on 20K which is very achievable is $6k hardly a living.
30% on $250K is $75K---------you see my point!

Tech/A, would like to know your thoughts on how much capitilisation is needed minimum, to make a 'reasonable' living from trading? And would the minimum also require the use of margin?
_

 

[tech/a]

Re: Can you make a living from the stockmarket

Thats a complex question.

But I'll see if I cant work backwards to find a logical answer.

Like any business---
It boils down to your projected return.
If I was to open a business---- or buy one,Id want to know what my return on investment is likely to be.
In a new business we can do this by projecting a cashflow.
In an established business we can have a look at profit--directors wages--perks etc.

So like in business if you KNOW you have a trading methodolgy that can consistantly return 20% P/A and you need $100k a year then youll need $500K to run it.On Margin thats around $200K.

However if your returning 100% P/A then youll only need around $100K or around $40K on Margin.

Personally I think it easier to return 20% P/A than 100%

Ofcourse if you dont KNOW your projected return then its all a guess.

Yes I know if your starting out then your cashflow projection is just that---a projection.Well I'd also answer that there are well devised projections and poor ones.
So answering your question is something that sound planning will be able to answer for you in the end.

Hope that makes sense.

 

[malh786]

Re: Can you make a living from the stockmarket

Yep, perfect sense. Thankyou