Finally found a mountain to start my fastlane journey, Stocks

[G-Man]

19 yr old me lost an entire summer's worth of backbreaking construction wages because he got lucky and popped about 15% in his first couple months. He then mistook his luck for skill and proceeded to double down on every terrible trading idea he had for the rest of the semester until he had to call dad to have enough gas money to drive home for Christmas break.

Those were the good old days.

 

[MJ DeMarco]

Oh boy here we go, another 20-something's gonna crash-and-burn because he got lucky making 25% in a few weeks.

He thought the same thing:
https://www.thefastlaneforum.com/co...ading-5k-how-to-lose-most-of-your-cash.59988/

As did a few others here who mysteriously disappeared along with their bankroll.

BTW, my very FIRST trade in the market (I think I was 22) made me like 30% in just a few short days.

I got hooked. Thought I was going to turn into the next Gekko and get rich.

In a few short months, I lost most of my bankroll. The bottomline I got lucky and translated randomness into "I know what I'm doing."

Not to be superstitious, but the market loves newbies -- and there's a reason why virgin traders always seem to make a few bucks when they first start.

Don't be fooled -- you're being gamed.

But by all means, please continue to update this thread and share your war stories -- I just hope you update us with the BAD as well as the GOOD.

 

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[AgainstAllOdds]

Let's run through the math:

You start with $2,000.

And claim to get a 25% return.

Therefore, in 20 years, you will have a whopping: 2000*1.25^20 =

$173,472.348!!!

Or $8,673.62 per year!!

Not to knock you down a peg, but you're not going to get close to 25% returns. If you believe that, then you shouldn't pursue stocks altogether. And if you can get 25% returns, then you should start by creating a greater investment base. $2,000 will get you nowhere.

 

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[AgainstAllOdds]

There is the assumption of a yearly rate of return when the 25% i'm talking about was made in 2 weeks. I'm not saying that's not uncommon to me but the long term it averages out probably.

In that case go all in.

End of first year, you'll be worth $661,744. In three years you'll be worth $72,445,432,630.60 -- and THE RICHEST PERSON IN THE WORLD!!! F*ck Yeah!!

... or back to zero since you fail to understand how you can't average 25% returns every 2 weeks.

 

[Andy Black]

19 yr old me lost an entire summer's worth of backbreaking construction wages because he got lucky and popped about 15% in his first couple months. He then mistook his luck for skill and proceeded to double down on every terrible trading idea he had for the rest of the semester until he had to call dad to have enough gas money to drive home for Christmas break.

Those were the good old days.

Haha. Nice story.

I mention this in thread "The allure of easy money".

If your fundamentals are wrong then the worst that can happen is you start making money, and then dig a deeper hole in the wrong place.



Some lines I mention every now and then (typically when people are overly enamoured with tools and automation):


"If you're digging a hole in the wrong place and then bring in a bigger digger, you just end up with a bigger hole in the wrong place."


"The first thing you need to do when you realise you're digging a hole, is to stop digging."

 

[David Young]

To be clear- this is about you making money. Any thoughts about providing value to others?

 

[MJ DeMarco]

You've been doing this 3 years and have only broke even? Mind you, breaking even in a market that has gone up 10% is losing 10% because the opportunity cost is spending ZERO time and getting the S&P return.

 

[vitality11]

From what I know, you use stocks to apply compounding (8th wonder of the world) to your wealth.
However, stocks themselves make for a poor choice to have Exploding Wealth.
I think 2k is too low to be properly diversified and to enjoy the benefits of compounding.
I've spend a lot of time learning about stocks and one of the main principles is that you don't rely on it to feed you.
In either case, look forward to your progress on this journey.

@devine PRIVET!

 

[G-Man]

In that case go all in.

End of first year, you'll be worth $661,744. In three years you'll be worth $72,445,432,630.60 -- and THE RICHEST PERSON IN THE WORLD!!! F*ck Yeah!!

... or back to zero since you fail to understand how you can't average 25% returns every 2 weeks.

Everyone knows only gains compound. That never happens with losses.

 

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[devine]

I put under the solutions that I don't want to manage other people money but would rather make my own though my own money as it keeps me in control and focused.

The photo is an image, and say what you will people will judge you on your image. If you ask about it I'm not gonna lie its not my car, I have nothing to gain but what's the hurt in a nice photo?

As long as it's not your cash, you're risking resources that aren't yours. Easy loss. People lose bank's money easily, imagine how easily you'll lose cash handed to you by your family.

That's exactly the point and the problem. This is a social proof kind of photo, in case you don't own the car it illustrates the mentality: the preference of seeming "successful" instead of being successful.
It only means that you're not willing to walk the walk and incapable of grinding when it's required.

Now, don't feel like I'm being too negative and overreacting, I'm kindly suggesting you to reconsider what you're about to do, and start with something safer and more long-run oriented, because stocks won't make you rich, neither they will help you acquire any valuable skillset to create wealth.

 

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[Scot]

If you want to be fastlane, create a better version of Robinhood.

You answered your own question by pointing out the pain points of day trading.

 

[fastbo]

Bro you being up 25% over a couple weeks is like being $1000 up at a casino at 2am. By 8am you've lost it all and overdrawn your credit card by another $1,000

Warren Buffet has a 50 year track record of 21.6% annualized returns and he's one of the greatest stock market investors in history. Yet in 2 weeks you've decimated his track record, and will do 12x better (300%) consistently.

You need to have a reality check... the people making millions day trading are people who have multi million dollar accounts. They're taking 1/8 of a dollar over white knuckle $500,000 trades and doing it over and over. And the ones making money are the outliers.

The stock market is a zero sum game. Every dollar made is taken from someone else. The only reason it keeps growing is because of population growth and the retirement scam. Actually, it's less than zero sum. Like like the house in poker, the institutional players (brokerages, hedge funds, mutual funds, etc) all take their cut, so the total amount in play is less than zero sum. You're no better off playing poker than day trading. Remember, there are plenty of professional poker players... the outliers... same as the millionaire day traders.

I start this thread because after years of on and off commitment to investing in the stock market through day trades I have come to the realization I will use this method In order to start my journey. My experience in the market is very long (8 yrs + on and off) and with the advent of Robinhood(stock trading platform for smartphones) where there is no commissions and has pattern day trader alerts so I don't get flagged . This has been my problems for YEARS. With these main problems off my shoulders, I've been recently focused on just making money . I'll post my own capital amount and the % currently gained on it. I believe everyone has their aptitudes and it's no doubt for me that I see a good start off the ground through the markets.

Current goal : capital gains of 300% on the money I invested for myself by this time next year 02/11/2016

Current status: Invested $2,000 %earned:25%

Disclaimer: I have a lot of philosophies and they have worked for me as I etched them in my soul from my very own experience and not from any other books and what not. Other words there not "conventional".

Problems I've had faced in the past:
* was mismanaging money (spending every dollar earned) and starting from scratch for the 4th time.
*trying the manage other people's money, however, there was a conflict of interest as the lines were not clearly drawn out on how profits were to be split or how losses would be handled.
*Day trade calls and preventing becoming a "pattern day trader" which prevents me from buying and selling a stock on the same day which for me is a huge loss of control as I live hours at a time and prevents a lot of losses from occurring.
*being entrusted with capital from family only to let my opportunity to be squandered by spending it all selfishly on whatever desire I had in the moment.

Current solutions this time:
*Keep me accountable through this thread and just letting the outside world(person and the internet) know what's going on with my balance.
*I decided I'm not mature enough to handle other people's monies for them because I myself am learning to be professional with my own money however I will take in zero to very low-interest loans from friends and family to increase the $ rate of return on my account as I consider it my own money and I really do take care of my own money more than I believe anyone else would . It also keeps nonsense to a minimal as I just focus on the stocks I choose and no emotions, feelings, worries, or any other communications that are required when handling monies of others.
*Robinhood the app has in itself removed this by having a prevention and lots of notifications .
*So since my reputation within my family is I mismanage money (very different from losing money) is that I'm a high risk to give money to. In this regard, I pled and just wouldn't give in because I believe in myself this time around I will not stop until I meet my own goals one year at a time. I'll give my login and whatever it takes to get a loan and with careful and a lot of heart I got a loan of $1,000, sure its not the max I can borrow which is 6k but ITS BETTER THAN 0! And forward looking as I am If I can prove myself for at least 6-9 months that I am responsible and profitable that I can afford to have a greater loan given to me to be used as capital in the future.

So with this I'm glad to finally be apart of the EXECUTION TREAD ! and hope yall all keep tabs and supportive motivation throughout this long journey (years seem like a lifetime to me)

If I face problems that deal with money management ( I KNOW I WILL) I will ask this forum so please stick with me to help as I really appreciate everyone who contributes to this forum and has worked hard to learn their own fair share of knowledge .

 

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[fhs8]

It's so simple but what people don't get is that there's randomness to the stock market just like there's randomness to baccarat. You think that you know how to trade because you just gained 25% in 2 weeks? Are you that stupid?

HFT firms are employing custom microwave beams through the air because it's nanoseconds faster than optical fiber (photons only go speed of light in a vacuum not cable). They buy commercial space right next door to exchanges and fill it with computer racks. They take advantage of rebates and even get PAID money by the exchanges to place trades which increase liquidity. On average HFT makes fractions of a cent on each trade. You think that there's such a market imbalance that you can gain even 1% a week? If you're paying more than 1 penny to place a trade (Scottrade charges $7.00 for example) then you're gambling because there's no way you can win over the long term.

http://www.reuters.com/article/us-highfrequency-microwave-idUSBRE9400L920130501

 

[MidwestLandlord]

Technically it's a zero sum game where the average return of the market is by definition the average return for all investors in the market.

Zero sum means that the pool of money only expands when someone puts money in the pot. Poker is a zero sum game.

The stock market expands based on extrinsic value, or "good will", meaning investors are willing to pay more than the intrinsic value (liquidation or "book" value) of the underlying company's assets.

Therefore, it is a positive sum game. The money pool expands without the addition of additional physical currency.

Extrinsic value being high right now is why some , including me, are saying that the stock market is over-priced.

I.e. the prices of individual stocks are too high compared to the book value(s).

 

[StartupMonkey]

Let's run through the math:

You start with $2,000.

And claim to get a 25% return.

Therefore, in 20 years, you will have a whopping: 2000*1.25^20 =

$173,472.348!!!

Or $8,673.62 per year!!

Not to knock you down a peg, but you're not going to get close to 25% returns. If you believe that, then you shouldn't pursue stocks altogether. And if you can get 25% returns, then you should start by creating a greater investment base. $2,000 will get you nowhere.

Summed.

 

[Pete799p]

Did the same thing in College. Started with close to $10k and began trading options. Did what I considered to be amazing, about 20% in 6 months, but came to the realization that I lacked sufficient capital to make a reasonable rate of return for time invested.

Left the trading game for a business opportunity so I could build the appropriate bankroll.

Wish I had kept trading even though the cash produced would have been nominal as the extra years of market experience would have been valuable so by all means get started trading and keep at it but I would shift your focus towards the development of a consistently profitable strategy that is competitive vs. market returns in lieu of trying to become a millionaire overnight.

 

[SquatchMan]

You've been here for almost three years and you're currently daytrading with 2k in a Robinhood account while working a minimum wage job...

Come on man.

Day trading doesn't work, at least it doesn't with the tools you have available.

However, you have all the tools/knowledge to make a profitable business on this forum (Gold/Notable/INSIDERS).

A few clicks away.

You could probably start making money by the end of the week on Upwork if you really worked hard at it.

 

[Soulrize]

Hello to those still even interested in my trip,
So situations have changed as I've been really digging in . I've been continuing the trading and I've joined sure trader which allows day trades and 6x margin .
results so far
- Commissions come to anywhere from 50-250 a day
- P/L overall is positive but still close to break even

I've been journaling my trades and I've noticed one pattern in particular. I narrowed down the cause for this break-even effect, it isn't a system its a user problem mainly me. It comes with compelling evidence that even though I choose the good stocks the majority of the time , My impatience has held me back from earning more than break even. Its literally minutes and I noticed I hold stocks for anywhere to 2mintues to an average of 10-15. When I look back and review, Had I held it for 30 minutes instead of 2 minutes or at most 2 hrs instead of 25minutes I would be doing very well. Not to say all my trades I'm impatience but the majority of them I am and its been costing me.
Current status
- Working on this patience deal to optimize my returns,
-Learning machine learning since I'm interested on how a machine can possibly optimize my trading even more.

If anyone has any advice on how they deal with impatience I'd greatly appreciate it .

Thanks for reading.

 

[BrooklynHustle]

I'm not blind, however, I think with some knowledge and experience, stocks don't look more like a gamble, just a puzzle that needs to be solved in one's own perception. I'd say the main objective is to raise capital but its still a process. Im still in line to graduate next spring, with plans of working to build skills I have no clue about such as project management/ building teams ect. Also using the degree to relocate cities.

Well, it sounds bad, however in those years I've learned a lot, I'm not relying on hope which essentially what it is if you put a little to zero time into researching your investments. I've made my own judgements and did my own research all this time, which allowed my accuracy to increase over time. I've adapted what I keep learning to my perspective, and it builds. I'd say the only thing missing from all this is results in terms of ROR. I started tracking it this month for precise percentages.

One of the core financial principles taught in TMF /UNSCRIPTED is that you should use the markets to preserve wealth/generate recurring income once you have a large pile of cash to put to work. You should NOT try to use them to build up your wealth, as that is not their strength

I'll leave it at that, but good luck to you, sir...

 

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[c_morris]

It sounds like you are letting emotions dictate your decisions. This is very common and the #1 reason most traders lose. Successful traders develop a formal trading plan with a strict set of rules to follow. They also have the discipline to follow those rules which effectively takes the emotion out of trading. I recommend you read "Trading in the Zone" by Mark Douglas. It's a very good book on the psychology of trading.

 

[devine]

Correct me if I'm wrong:
- You have no money, no money management skills, have a reputation of money waster and want to manage someone else's money?
I'm not going to make it sound, but we both know how it's gonna be.

btw, on your photo you stand in front of a car you cannot afford, which says a lot to me personally.
Sidewalkers never change.

 

[B V Marlon]

Am I right in thinking you've made 25% on the $2000 you've started with so far? If so, that's quite impressive. However, isn't day trading so risky that you stand to lose that 25% and more if you have a run of bad luck?

Also, don't most people lose on day trading, including the professionals? From what I can gather, to trade successfully you need to look longer term and have the appropriate hedges in place.

I reckon you'd be better off investing your money in buying stuff of Craigslist and flipping it for a profit, if making more money to start other ventures is what you're trying to do.

You might want to have a look at this thread:
https://www.thefastlaneforum.com/co...-to-buying-and-selling-anything-part-1.35889/

 

[G-Man]

I got hooked. Thought I was going to turn into the next Gekko and get rich.

In a few short months, I lost most of my bankroll. The bottomline I got lucky and translated randomness into "I know what I'm doing."

Not to be superstitious, but the market loves newbies -- and there's a reason why virgin traders always seem to make a few bucks when they first start.

This. I'm embarrassed to admit that I'm so stupid I had to learn that hard lesson TWICE. Lost my bankroll at 19 and again at 23.

Since then, in my relatively short professional career, I've witnessed shadyness in loan initiation by lending institutions and publicly traded corporations using rat-hole 3rd parties to conceal the sources of goods. I don't think I'll ever be able to approach the stock market again. None of those financials are worth the paper they're written on.

 

[BrooklynHustle]

Hello to those still even interested in my trip,
So situations have changed as I've been really digging in . I've been continuing the trading and I've joined sure trader which allows day trades and 6x margin .
results so far
- Commissions come to anywhere from 50-250 a day
- P/L overall is positive but still close to break even

I've been journaling my trades and I've noticed one pattern in particular. I narrowed down the cause for this break-even effect, it isn't a system its a user problem mainly me. It comes with compelling evidence that even though I choose the good stocks the majority of the time , My impatience has held me back from earning more than break even. Its literally minutes and I noticed I hold stocks for anywhere to 2mintues to an average of 10-15. When I look back and review, Had I held it for 30 minutes instead of 2 minutes or at most 2 hrs instead of 25minutes I would be doing very well. Not to say all my trades I'm impatience but the majority of them I am and its been costing me.
Current status
- Working on this patience deal to optimize my returns,
-Learning machine learning since I'm interested on how a machine can possibly optimize my trading even more.

If anyone has any advice on how they deal with impatience I'd greatly appreciate it .

Thanks for reading.

There is some good advice about the stock market above, but you don't seem to want to hear it...

This post reads a little bit like someone trying to figure out a gambling system to beat the House/Casino

Not trying to be harsh, but it is what it is...

Anyway, best of luck in your journey & hope you will heed some of the advice in this forum

It's OK to give up on a single path that doesn't work as long as you don't give up on the dream

I would start thinking about market needs

 

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[V8Bill]

The stock market is a zero sum game. Every dollar made is taken from someone else.

That's incorrect.

If I buy stock at $10, sell it to you for $11, you sell it to the next trader for $12, they sell it to the next trader for $13...etc who's losing? Sure, any of us might take a loss and we all risk taking a loss but saying it's a zero sum game or that for every winner their has to be a loser is just incorrect.

 

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[V8Bill]

Technically that's pretty irrelevant for the individual trader and it's still not true that for every win someone has to lose. The reality is that individual traders can beat the global average and often do and there's nothing strange or irregular about it. Individual traders have different risk appetitites to fund managers who have to be extremely conservative and responsible with other people's money. There are millions of traders each with their own style and commitment. Sorry, but I think you might be drawing a bit of a long bow there, it's not zero sum.

 

[fastbo]

Ok you guys are right, it's not *technically* a zero sum game because people don't cash out after each trade, but the point is that for me to make $1 there has to be another sucker willing to give up that extra $1. There are no gains without another sucker anteing in. The reason the stock market grows long term is because of population growth, and the stock market/401k/IRA retirement scheme.

Over the short term day trading is more of a zero sum game. If a stock is bouncing around and you're taking gains, someone is taking the losing side of that trade.

Day Trading has survivor bias built into it. Lots of people are losing, they just don't brag about it.
Point is, day trading = Vegas. There are people who can consistently make money day trading or playing poker. Reality is, everyone can't make money day trading because there has to be a loser for each winning trade. You can also wipe out your years work on one bad trade.

If you're read the book, compare stocks to the fastlane. Are you building a brand/company you can sell by daytrading? Unless you're selling shovels to the daytraders, you're not. You're just in another gold rush. Yes you can get rich, but the odds are against you.

Compare this to a company you can build... that gains value over time. That you could exit in a liquidity event. That won't be up $2k one day and down $1k the next. If you're talented at day trading, consider selling shovels to other day traders. Develop educational products. Do seminars or live training. Develop software tools people can use. etc.

Technically that's pretty irrelevant for the individual trader and it's still not true that for every win someone has to lose. The reality is that individual traders can beat the global average and often do and there's nothing strange or irregular about it. Individual traders have different risk appetitites to fund managers who have to be extremely conservative and responsible with other people's money. There are millions of traders each with their own style and commitment. Sorry, but I think you might be drawing a bit of a long bow there, it's not zero sum.

 

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[windchaser]

Let me ask you something, that 25%, is it coming from beta or from alpha? What criteria you choose for selecting investments? It is very easy to make money in a bull market. But wait until the next pull back, you will see how much fun that is! In my opinion the approach you are following is no better than playing in a casino. Good luck, because you are going to need it! If you want to do it just for fun that is ok, but if I were you I wouldn't put all my savings there.

 

[Millenial_Kid5K1]

Technically that's pretty irrelevant for the individual trader and it's still not true that for every win someone has to lose. The reality is that individual traders can beat the global average and often do and there's nothing strange or irregular about it. Individual traders have different risk appetitites to fund managers who have to be extremely conservative and responsible with other people's money. There are millions of traders each with their own style and commitment. Sorry, but I think you might be drawing a bit of a long bow there, it's not zero sum.

Perhaps it's not relevant for the average trader, but I'd say it's very relevant for the average investor. What it tells me is to use index funds and not bother with individual stocks, unless I have years to spend developing a system to beat the smartest minds in the financial game(like any of the stock market wizards.)

Then again, for me this is all asset preservation, not wealth building.

Zero sum means that the pool of money only expands when someone puts money in the pot. Poker is a zero sum game.

The stock market expands based on extrinsic value, or "good will", meaning investors are willing to pay more than the intrinsic value (liquidation or "book" value) of the underlying company's assets.

Therefore, it is a positive sum game. The money pool expands without the addition of additional physical currency.

Extrinsic value being high right now is why some , including me, are saying that the stock market is over-priced.

I.e. the prices of individual stocks are too high compared to the book value(s).

Thanks for the explanation, I was confused on the meaning of the term.

 

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[Soulrize]

There is some good advice about the stock market above, but you don't seem to want to hear it...

This post reads a little bit like someone trying to figure out a gambling system to beat the House/Casino

Not trying to be harsh, but it is what it is...

Anyway, best of luck in your journey & hope you will heed some of the advice in this forum

It's OK to give up on a single path that doesn't work as long as you don't give up on the dream

I would start thinking about market needs

I'm not blind, however, I think with some knowledge and experience, stocks don't look more like a gamble, just a puzzle that needs to be solved in one's own perception. I'd say the main objective is to raise capital but its still a process. Im still in line to graduate next spring, with plans of working to build skills I have no clue about such as project management/ building teams ect. Also using the degree to relocate cities.

You've been doing this 3 years and have only
broke even? Mind you, breaking even in a market that has gone up 10% is losing 10% because the opportunity cost is spending ZERO time and getting the S&P return.

Well, it sounds bad, however in those years I've learned a lot, I'm not relying on hope which essentially what it is if you put a little to zero time into researching your investments. I've made my own judgements and did my own research all this time, which allowed my accuracy to increase over time. I've adapted what I keep learning to my perspective, and it builds. I'd say the only thing missing from all this is results in terms of ROR. I started tracking it this month for precise percentages.