Do you trade full time?

[Joe Blow]

Do you trade full time or part time?

If you are a part-time trader do you aspire to be a full time trader or do you prefer having a workplace to go to during the day? Are you afraid of making the leap to being a full time trader because of the security a day job provides and the high rate of failure amongst full time traders?

Perhaps you are not a trader at all and take a long term view with your stock market investments.

Feel free to tell us about what sort of trader/investor you are are how trading/investing fits into your life.

 

[TjamesX]

Share trading/investing is definitly a part timer for me.

My main aim is to get a return on my cash of around 10%pa. Currently I am about 9% after 7 months so this year is pretty good....so far. I tend to be a discretionary buyer/seller looking at fundamentals with a bit of techical analysis, with influence of the overall market and economic sentiment thrown in - this probably sounds like a recipee for disaster but I think it suits my personality :

TJ

 

[RichKid]

I'm not quite sure what I would be best described as. Definitely not a hold and prayer.

I trade with a timeframe of a few days to months (or longer if the profit runs). Prefer TA and currently trying to figure out how to get a good system going. Takes so long to understand simple concepts, maybe then I'll know what suits me best.

Can't imagine missing out on life by being stuck in front of a screen all day. I don't think I'll be as good as WayneL for example so I won't be able to get away from the trading screens as often as good traders like him do (also can't handle the time in the crypt, I get claustrophobic). Maybe my views will change as I learn more. Been fun so far.

 

[brerwallabi]

The question is , do you trade full time, my answer is now no, Jan 04 to Oct 04 is yes, that is if you call 1325 trades in that time full time and only source of income.
Profit sorry unannounced, only to the taxman, but believe me guys if you want to try you need discipline and dedication, going out to lunch some days cost me a grand many a time, watching two screens being up and computerised at 7.00pm and not knocking off till 5.00pm takes its toll, playing with money is not a game having the odd $20k like most on here dabbling and posting seems the way and its exciting, but planning your buys and selling to make money with a few bit more capital is something beyond most on here I think. I am talking short term of course, life is short and I want to buy todays car tomorrow not next year. LOSE QUITE A FEW TRADES BUT WIN A LOT MORE. If any of you guys have hacked 6 months and are still going please give me your secret.

 

[wayneL]

If any of you guys have hacked 6 months and are still going please give me your secret.

Nearly 5 years now full time. The secret? Dunno, you just gotta love it I 'spose.

For me it's still a passion.

Cheers

 

[Porper]

Definately my goal is to trade full time, eventually.Still have a couple of years at least before I get anywere near where I want to be regarding educating myself.

There is still an awful lot I need to get my head round, I suppose there always will be something to learn, which for me makes it all the more exciting.I love the whole concept of trading, definately enjoy it and can't get enough information inside my head.I get frustrated through lack of time to research and set up a system that suits me.

I have definately had beginners luck last year, and this so far, I am sure I will find myself out when a few trades go pear shaped.All part of the learning process.

Waynel is correct, it needs to be your passion, for me it is.

 

[tech/a]

There is a group who dont fit into either of the 3 catagories.
Those who dont have to or want to trade for a living.

I fit there.

Of all traders I have found to be successful trading short term and fulltime its only those who trade Futures or Options.

Im yet to find let alone meet a trader with a method which can turn a profit good enough to make a living from trading stocks.

I think possibly brerwallabi may understand.

Those that I know who do(Trading futures and or options) are bored out of their brains.Sure they make good $$s but they really have (after a time) lost the job satisfaction.Its no longer PASSIONATE.

I also believe that like most businesses many aspire to trade fulltime and are undercapitalised.
You can be the best electrician in the world but have a sick business due to undercapitalisation.
Trading in my veiw is very suseptable to this and so there is a high attrition rate.

If your trading $50k as a capital base and you want to make $150K a year then thats going to mean a very high return!
Trading with $500K makes it much easier.

Trading longterm and with a share portfolio means little time is required and sound returns with only as little as 30 mins a day input.

That appeals to me and is MY style of trading which suits me.
While it certaintly returns a wage its not my purpose for trading.
A large number of phsycological pressures are removed not "Having to make a living from trading".
There are few wives/husbands who could accept or understand 5 losing weeks in a row as part of your trading methodology!!!


To me atleast true financial security is a continual flow of passive income.
(1) From a business where you have limited input(EVENTUALLY).
(2) From trading or super from profit derived from your trading (Free trades)
(3) From Freehold property.
(4) From naturally appreciating (Owned) rare items like Art,Coins,Bank notes,Stamps,Books,etc.----an area often forgotten!

The eventual aim is NO DEBT and passive income flow---coupled with appreciation of those assets held with no debt.

Here is true diversification and risk limitation.
4 income flows beat 1 in my veiw.

 

[Investor]

Do you trade full time or part time?

...Perhaps you are not a trader at all and take a long term view with your stock market investments.

Feel free to tell us about what sort of trader/investor you are are how trading/investing fits into your life.

I am a long term investor using only fundamental analysis. I review the companies in which I invest in periodically. Some are set and forget - unless they make an acquisition or change management, in which case I have to analyse.

Others require more active analysis (all resource sector shares that I hold and some industrial sector shares).

I developed an interest in investment in my Economics degree (accounting major). Later, I joined the banking industry as there was a perception then that it was secure employment and one would have a job for life. This changed of course.

When the retrenchments started, I realised that I needed to accelerate my investments to achieve financial freedom asap, as job security went out the window. The irony was that I survived all the waves of retrenchments but had reached my goal of financial freedom much earlier (age of 43) than I targeted (age of 50). I resigned from a job paying $120K p.a. Had enough of the 60 hours working week that I had to do for years. Work / life balance was way out of kilter.

The huge rises in shares in 2003 and 2004 gave me a quantum leap because I went from zero gearing at the end of 2002 to 60% gearing when my instincts told me that the ASX had bottomed at 2700. Bought lots of BHP under $9 in early 2003. Later bought Rio Tinto in April 2004 at $32. Also bought lots of WMR at under $5 in mid 2004, ZFX in 2004 (in that infamous ZFX thread - must be the longest thread on record due to all that repetition - one can get RSI just reading all that repetition ). Bought some Alumina and Iluka shares as well. A true believer in the mining boom. All doing okay so far, but I think the big test might come, if it has not already. Will try to be out before the cycle really turns but I think it has further to go. Time will tell. Meanwhile, WMR is "underwritten" by BHP for $7.85. Have reduced the gearing level since to a comfortable level, but mainly due to big price rises.

From experience, I think the requirements to be an investor are (no one has to agree with me):

1. Capital. Once you achieve compound growth off your initial capital base, the growth can get exponential.

2. Skills / knowledge. There are no shortcuts to fundamental analysis. A lot of studying (I did three post graduate studies part time, despite working long hours in my job) is required. On the job training with financial analysis and financial markets also helped. A lot of reading since the 1980's with BRW, Financial Review, The Age, and later Shares Magazine, The Economist, The Bulletin, etc. has to be done. Also watch Business Sunday and Alan Kohler's Inside Business program on Sundays. Have also read books on investments and books on Warren Buffett.

3. Courage and confidence. Have to eliminate all emotions (fear and greed) from the investment approach. Have to try to use clinical analysis in terms of buying a part of a business. Ignore daily market volatility unless they bring buying opportunities.

With some cyclical stocks, I do try to time the market by buying low and selling high but the time frame could be anywhere between 3 months and 8 years or longer, depending on my reading of the economic cycle.

Have not held any stock that has totally collapse so far (and hopefully never will), but I hold my portfolio with a view that any company can fall at any time and it would not bother me too much (tax deductions against CGT can cushion the blow if it happens). Difficult to see stocks like WOW, AGL, CCL, ORG, IVC, BHP and RIO ever collapsing.

If a bear market sets in, I merely reduce my gearing level and sit it out. If the bear market is long, I will probably reduce my gearing level to zero and wait until my instincts tell me the market has bottomed. Then I gear up again and buy big time.

 

[skin]

I have a stockbroker handling trust shares and super shares but however I have a stash which I have started buying and selling with. I've found the last couple of weeks hard to handle. They say the sleep test is wether you are in too far. Reading this site helps to keep me focused. It is a lonely game and no one to bounce ideas off - just taking in information and more information. I have lost plenty of money through my broker and have made some so I think what the heck, I can lose and win too. I am forever fighting my natural instincts. I do not use a chart or the like. I buy a piece of a company where I like its business and future ideas. I especially like resources and biotech. Big risk and Big gain style - no wonder I'm half insane.

 

[Investor]

In the March 2005 issue of Shares Magazine, there was a story about a guy who won a "pretend" share trading competition and decided to give up his job to become a day trader.

He revealed that he is merely breaking even. This is tragic considering that 2004 saw one of the biggest rises p.a. in the ASX. Even the "dart board" and Year 10 student could make money.

I think (could be wrong) that the term "Day Trader" might have started during the tech boom. Many were wiped out with the ensuing tech wreck.

 

[wayneL]

In the March 2005 issue of Shares Magazine, there was a story about a guy who won a "pretend" share trading competition and decided to give up his job to become a day trader.

He revealed that he is merely breaking even. This is tragic considering that 2004 saw one of the biggest rises p.a. in the ASX. Even the "dart board" and Year 10 student could make money.

I think (could be wrong) that the term "Day Trader" might have started during the tech boom. Many were wiped out with the ensuing tech wreck.

I won't try to pretend that day trading is easy...it aint. Just like any type of trading.

A lot of traders did amazing during the tech boom.....despite themselves....just buy in the morning, sell in the arvo.

But I want to point out that daytrading is a valid technique used by lots of traders, even today. No matter the time frame everything comes down to positive expectancy.

Daytrading is no different. My article here discusses this. The article mentions euro futures but daytrading stocks is the same deal.

Cheers

Cheers

 

[Investor]

..But I want to point out that daytrading is a valid technique used by lots of traders, even today. No matter the time frame everything comes down to positive expectancy.

....Cheers

Yes. I am aware that there are traders that do well. George Soros (self made net worth USD 7 billion) is a prime example.

 

[Investor]

....
Feel free to tell us about what sort of trader/investor you are are how trading/investing fits into your life.

G'day Joe,

How about yourself?

Which category are you in? Or is that a trade secret?

 

[Joe Blow]

G'day Joe,

How about yourself?

Which category are you in? Or is that a trade secret?

I'm definitely a part-time trader.

I'm not sure I could make it work full time because of my relatively modest pool of trading funds. As tech/a would say, I'm undercapitalised.

I don't have much of a trading plan and I've lost about as much as I've made in this game over the last decade. I'm an impulsive, reckless trader (maybe I should be a stockbroker ). Too much of the gambler in me I'm afraid.

So it's no wonder I ended up working in sales and running a website.

Although I must say, I have learnt a lot from the posters on this forum over the last eleven months! Thanks everyone!

 

[tech/a]

I'm undercapitalised.

I don't have much of a trading plan and I've lost about as much as I've made in this game over the last decade. I'm an impulsive, reckless trader (maybe I should be a stockbroker ). Too much of the gambler in me I'm afraid.

Joe.

You are a product of being undercapitalised.

There will come a time when your not and youll be suprised how much if not all of the above evaporates.
You and many others will be in a position to best utilise their capital through taking time in preparation as you are now.

tech

 

[Joe Blow]

You are a product of being undercapitalised.

There will come a time when your not and youll be suprised how much if not all of the above evaporates.
You and many others will be in a position to best utilise their capital through taking time in preparation as you are now.

Yes, the one lesson all my mistakes have taught me is that preservation of capital is everything, so set your stops and stick to them.

Right now I am in cash, watching and waiting.

 

[tech/a]

Right now I am in cash, watching and waiting.

As of yesterday me too.

 

[RichKid]

To me atleast true financial security is a continual flow of passive income.
(1) From a business where you have limited input(EVENTUALLY).
(2) From trading or super from profit derived from your trading (Free trades)
(3) From Freehold property.
(4) From naturally appreciating (Owned) rare items like Art,Coins,Bank notes,Stamps,Books,etc.----an area often forgotten!
The eventual aim is NO DEBT and passive income flow---coupled with appreciation of those assets held with no debt.

Here is true diversification and risk limitation.
4 income flows beat 1 in my veiw.

Great points Tech, diversification is the key in terms of smoothing out risk too via holding different assets. The other benefit of your point (4) is tax: collectibles are taxed differently so you get some tax benefits as well. Only issue is expensive collectibles don't get treated as well as they could be and sets of collectibles don't count. The $500 limit per collectible should be lifted to $1000 at least.

 

[RichKid]

Daytrading is no different. My article here discusses this. The article mentions euro futures but daytrading stocks is the same deal.
Cheers
Cheers

Wayne,
But isn't money mgmt a key issue in futures? Most of the MM techniques in those leveraged situations don't seem to be applicable to a diversified stock portfolio and most sharetraders don't even think of money mgmt as much as futures traders do (futures trades would get wiped out far quicker as a result), some share traders just buy and sell on instict or some other untested method.

 

[RichKid]

In the March 2005 issue of Shares Magazine, there was a story about a guy who won a "pretend" share trading competition and decided to give up his job to become a day trader.

He revealed that he is merely breaking even. This is tragic considering that 2004 saw one of the biggest rises p.a. in the ASX. Even the "dart board" and Year 10 student could make money.

I think (could be wrong) that the term "Day Trader" might have started during the tech boom. Many were wiped out with the ensuing tech wreck.

Yep, read that too, also affected his life as he was stuck in front of the screen a lot not to mention the anxiety he experienced. He would have been better off paper trading first, wonder why he day traded instead of just investing it- might have been a condition of the comp?? He may have won the battle but he lost the 'war'.