Ask HN: Do you day trade in stock market? What are your investing strategies?
Do you day trade in stock market? What are your investing strategies? Please share some insights and learnings along with what worked and not worked for you.
I know this question has been asked on reddit and other forums too but I am curious to know the opinion of HN community and what fellow Tech crowd in the Valley and around the world does about investing.
Thanks.
6 comments
Well, I don't know if it varies from country to country. But in my country (Turkey), there are prestigious companies which are almost %100 guaranteed to be stable.
What I do is, as long as the stock price drops, I keep on buying. As long as it is increasing, I sell. I just don't buy or sell all of them; I just do it as it increases/decreases.
What I do is, as long as the stock price drops, I keep on buying. As long as it is increasing, I sell. I just don't buy or sell all of them; I just do it as it increases/decreases.
Throw away account here as I'll share some financial details.
tldr: You won't make money day trading. Invest for the long term taking into account tax considerations and your risk appetite. I have and it has served me well.
In general I've learned that reducing fees [0] and thinking carefully about how to allocate investments across asset classes [1] is a much more successful strategy than picking individual stocks. Also try to hold on to investments for more than a year so you're taxed 15% on the profits rather than 30+% [2].
First thing you'll want to do is consider your asset allocation. I haven't used this tool myself, as I used an advisor, [3] but I consider Vanguard trustworthy as they are owned by their customers and have a good reputation. The purpose of a tool like this is to get a feel for how much you should be investing in equity vs bonds, vs real estate vs other exotic investments (hedge funds /private equity). I took a similar test through a financial advisor years ago and found it useful.
Over the last 9 years, I've invested roughly in this order of priority:
1) 401k for company matching & tax benefits - total profit of ~70k over the years. Starting from 0 balance 9 years ago, but recently have been maxing out contributions at ~17k per year 2) Exchange Traded Funds - SPY, DXJ, HEDJ. Essentially diversified, low fee investments in the US Stock market, Japan stock market and Europe. Total profit of ~30k over the years. 3) Bought a house, which I ended up renting. On paper profit of ~100k, but transaction costs (costs to buy and sell) eat into a large part of it. Long term it's a good plan. 4) Invested in a few individual stocks, lost a few hundred dollars. 5) Invested in options on a few individual stocks, lost ~3k. Learn about time decay before doing this.
Hope this helps!
[0] http://www.cfapubs.org/doi/sum/10.2469/faj.v66.n2.7
[1] http://www.sec.gov/investor/alerts/ib_fees_expenses.pdf
[2] https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_Unite...
[3] https://personal.vanguard.com/us/FundsInvQuestionnaire
tldr: You won't make money day trading. Invest for the long term taking into account tax considerations and your risk appetite. I have and it has served me well.
In general I've learned that reducing fees [0] and thinking carefully about how to allocate investments across asset classes [1] is a much more successful strategy than picking individual stocks. Also try to hold on to investments for more than a year so you're taxed 15% on the profits rather than 30+% [2].
First thing you'll want to do is consider your asset allocation. I haven't used this tool myself, as I used an advisor, [3] but I consider Vanguard trustworthy as they are owned by their customers and have a good reputation. The purpose of a tool like this is to get a feel for how much you should be investing in equity vs bonds, vs real estate vs other exotic investments (hedge funds /private equity). I took a similar test through a financial advisor years ago and found it useful.
Over the last 9 years, I've invested roughly in this order of priority:
1) 401k for company matching & tax benefits - total profit of ~70k over the years. Starting from 0 balance 9 years ago, but recently have been maxing out contributions at ~17k per year 2) Exchange Traded Funds - SPY, DXJ, HEDJ. Essentially diversified, low fee investments in the US Stock market, Japan stock market and Europe. Total profit of ~30k over the years. 3) Bought a house, which I ended up renting. On paper profit of ~100k, but transaction costs (costs to buy and sell) eat into a large part of it. Long term it's a good plan. 4) Invested in a few individual stocks, lost a few hundred dollars. 5) Invested in options on a few individual stocks, lost ~3k. Learn about time decay before doing this.
Hope this helps!
[0] http://www.cfapubs.org/doi/sum/10.2469/faj.v66.n2.7
[1] http://www.sec.gov/investor/alerts/ib_fees_expenses.pdf
[2] https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_Unite...
[3] https://personal.vanguard.com/us/FundsInvQuestionnaire
tl;dr Know what you're buying, know your risk threshold, hold it as long as you can, invest frequently.
It's going to sound like a stale and naive quip but buy low and sell high. I look for deals. Sometimes that's an IPO with a nice finance sheet. Sometimes it's a huge correction on a popular mega-corporation.
Weather you're a value investor or a growth investor the goal is profit, right? What works for me is knowing what I'm investing in. I'm familiar with the products or services.
It's a fun topic. There's lots to read out there. Sturgeons Law holds in full effect. 90% of all of it is total crap. All you need is probably at your local library.
Here's some homework. Look up these terms:
dead cat bounce, double top, exponential moving average, don't fight the tape, upgrades, channel, channel up, channel down, wedge, triangle, insider selling, dividends, oversold, ticker, forex, a falling knife has no handle, FUD, Irrational exuberance...
fun time 45 min talk on the basics: https://www.youtube.com/watch?v=WEDIj9JBTC8
It's going to sound like a stale and naive quip but buy low and sell high. I look for deals. Sometimes that's an IPO with a nice finance sheet. Sometimes it's a huge correction on a popular mega-corporation.
Weather you're a value investor or a growth investor the goal is profit, right? What works for me is knowing what I'm investing in. I'm familiar with the products or services.
It's a fun topic. There's lots to read out there. Sturgeons Law holds in full effect. 90% of all of it is total crap. All you need is probably at your local library.
Here's some homework. Look up these terms:
dead cat bounce, double top, exponential moving average, don't fight the tape, upgrades, channel, channel up, channel down, wedge, triangle, insider selling, dividends, oversold, ticker, forex, a falling knife has no handle, FUD, Irrational exuberance...
fun time 45 min talk on the basics: https://www.youtube.com/watch?v=WEDIj9JBTC8
If you are serious, this is everything you need to know:
https://www.youtube.com/watch?v=v6ciY8u04Kk
If you still want to day trade after watching these, then I guess get yourself to NY or London etc. and try and get a job like that.
https://www.youtube.com/watch?v=v6ciY8u04Kk
If you still want to day trade after watching these, then I guess get yourself to NY or London etc. and try and get a job like that.
Seems reasonable but not all good advice:
> One reason I like startups is that they represent a middle way: you can get some equity or ownership in a business that might turn out very well, but you also get a salary.
Yeah just search HN for the horror stories. Enough said.
Work out if the EV is better working for big corp and using your extra salary to buy shares. But...
> Can you guess what happened next? The dot com crash happened, and shares of Cisco plummeted to $12/share.
Yes you need a portfolio.
> One reason I like startups is that they represent a middle way: you can get some equity or ownership in a business that might turn out very well, but you also get a salary.
Yeah just search HN for the horror stories. Enough said.
Work out if the EV is better working for big corp and using your extra salary to buy shares. But...
> Can you guess what happened next? The dot com crash happened, and shares of Cisco plummeted to $12/share.
Yes you need a portfolio.