How much should I invest in short term trades?

[aus_trader]

Well if you're wanting to make money, short-term trading is about the worst way to go about it.

How about this radical idea: look for large companies, with good track records, solid earnings growth, competent management and invest in them?

Roughly 95 percent of short term traders lose money. That's nineteen out of twenty. Would you bet ten thousand dollars of your hard earned money on a single roll of a 20-sided dice? That's not the sort of odds I really like.

OK, you might have a point Lomu. But the reasons why people like myself and Zaxon are hanging around forums like ASF are to be the 5% that don't lose money in the long haul.

It is certainly not an easy game to be in because there will be long losing steaks along the way that 95% will not tolerate, see my Speculative Stock Portfolio, and I was a little sick in the tummy too (I am only human) to invest on the next opportunity after so many trades that went against me. Despite all that the portfolio still has a small edge or +ve expectancy so far... My other portfolio Medium/Longer Term Stock Portfolio, is a little bit more consistent so far...

I like large cap companies as well and I like the consistent dividend offered by them even more. But some of the smaller companies can offer better capital gains which could double/triple or more in a shorter period of time than established companies. A recent example is Zip Co Ltd (Z1P), which has tripled within the last 12 months that we have been discussing on this forum and Zaxon/myself have made some money along the journey.

How about this radical idea: look for large companies, with good track records, solid earnings growth, competent management and invest in them?

You are most welcome to discuss the performance of the large companies you are referring to, we might learn something as well.

 

[Knobby22]

I think it is easier to make money in smaller companies They are less closely studied and as a small investor they are liquid enough. The big fund managers have to buy into large companies and have access to better research and can talk directly to management.
Small companies are less studied so the small investor can be one of the better informed.

 

[tech/a]

Wow
I don’t know about majority of these comments
Futures traders?

If your good at what you do you’ll succeed
If you just punt you’ll fail

 

[Boggo]

Hello everyone,

I'm trying to work out how much I should invest in short term trades, buy and then sell within days and weeks rather than hold for months... I have never done this before but I have been doing a lot of research and getting advice on which stocks I should trade.

One approach example.
Where is your entry, where is your exit, how much of your $$ are you prepared to put at risk ??

This determines how many shares you buy.

Weekly chart of TLS below as an example of what I mean (and not my trade $$).

(click to expand)

 

[tech/a]

Fixed Fractional position sizing Boggo
You can also have a fixed parcel size and a % of purchase price as risk
Eg split your trading capital into same parcels say 5
Then say 10% of capital invested this would equate in this case
2%
10 and 10% would be 1%
Work toward % return on investment.