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How do you manage your paper investments?

Runum

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I am a REI so I do not know what I don't know. I picked up a book about day trading. "a beginner's guide to day trading online". by Toni Turner. I have read about 30 pages of it and it talks about full time day traders spent the whole trading day in front of multiple cable and computer monitors. It does mention some about part time traders with less monitors but having to always watch the business news to keep the pulse of the markets.

When everything is going well with my REI I have some down time and I am trying to develop another area of business and income. There was a presentation at B&P about options trading and it sparked an interest.

How do you manage your time investment and knowledge of the markets? Do you spend 8 hours a day in front of screens? If so, how is this different than a job?:cheers:
 

kimberland

Bronze Contributor
Jul 25, 2007
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It is the same type of thinking
as with REI.

I've put in a layer of management
with a financial planner.
That way, I can take a month without any worries.
I look at returns after fees
as you look at profits after expenses.

But then, I'm a fundamentals gal.
The technical heavy folks can probably automate their systems
and have it less people heavy.
 

Edge

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I am a REI so I do not know what I don't know. I picked up a book about day trading. "a beginner's guide to day trading online". by Toni Turner. I have read about 30 pages of it and it talks about full time day traders spent the whole trading day in front of multiple cable and computer monitors. It does mention some about part time traders with less monitors but having to always watch the business news to keep the pulse of the markets.

When everything is going well with my REI I have some down time and I am trying to develop another area of business and income. There was a presentation at B&P about options trading and it sparked an interest.

How do you manage your time investment and knowledge of the markets? Do you spend 8 hours a day in front of screens? If so, how is this different than a job?:cheers:
Well, that’s kind of like asking a SFR real estate investor how much time they devote to real estate and how is that different from a full time job. There have been times in the past that I was dedicating more than 40 hrs/week with real estate.

You can ask 100 different traders this question and get 100 different answers.

Some people daytrade and that presents the image of 8 monitors in my head, some people swing trade and look more to a weekly timeframe, and some people buy and hold and pray. Some people leverage to the hilt and some people think margin trading is a panic stricken path to ruin. Some people screen 100’s of different stocks, some look at 1 or 2. There are many examples of successful people in each of those categories.

I have 1 monitor at my home office and I am not there between 8-5 during the week. I don’t pay much attention to single stocks, mainly just the major indexes and ETFs. There are lots of days I catch a glimpse of the pre-market futures in the morning and don’t see another quote before the closing bell. You've got to decide your style and what kind of time/risk you want to invest. I think you've already alluded to what you don't think your style is, so that is half the battle.

To me trading come down to finding your style, identifying you edge, and executing. I personally put on positions with a 3-6 week timeframe and am pretty stubborn about closing them out early. I put them on for a fair price at what I felt was an edge at the time. Just because the market moves against me, as it has these past few days, doesn't usually change the reason I got into a position, so I let it ride. I do hedge when I feel a good opportunity presents itself.

My positions are option positions and they are "positive theta" which means time decay is on my side. Time decay accelerates the most during the last 2 weeks prior to expiration, and you generally have to look out 6 weeks to get an acceptable risk/reward premium. That defined my style. My edge is derived from TA, FA, and statistical probabilities.

When I look at the time I put into trading options vs. my real estate investments and my JOB, I definitely make more money/hour trading options. However, I view my style of trading options as more risky than real estate and my JOB. I can’t lose 100k in one month at my JOB and I’d have to be trying really hard to lose 100k in one month on one of my SFRs.
 

Runum

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Thanks Edge. I'm trying to get to understand the lingo and acronyms associated with this area of investing. Are there any better sources of information for a beginner to check in to than the book I'm reading?:cheers:
 

Edge

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Thanks Edge. I'm trying to get to understand the lingo and acronyms associated with this area of investing. Are there any better sources of information for a beginner to check in to than the book I'm reading?:cheers:
I don't know anything about the book you are reading, sounds like it is geared towards daytrading, which isn't what I do.

If you are interested in learning more about options and the type of trading I do, then you could check out these sites:

http://www.optionseducation.org/
http://www.investopedia.com/university/options/
http://www.optionetics.com/
http://www.redoption.com/
 

Runum

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Sounds great, thanks.:thankyousign:
 

Rickson9

Gold Contributor
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Sep 4, 2010
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Just like there are dozens of ways to make money in RE, there are also dozens of ways to make money with stock. Even the term "trading" encompasses a multitude of different techniques.

The most important determination before investing (in stock) is your own personality and temperment.

As I have mentioned before, I am extremely lazy and work adverse. Thus I choose a style of investing that suited my personality. If a go-go individual who tried to use my methods they would probably fail, and go insane in the process. The same result would happen to me if I tried the multi monitor swing trading deal.

There are super lazy people like me, crazy boundless energy individuals and everything in between. The good news is that there is likely a style thst suits any personality and maximizes the chance of success.

Getting back to the original question, I spend a few hours a year in total on my stock investments (mostly centred around reading and waiting) and I use a boring one page excel spreadsheet to monitor my holdings.

Best regards.
 

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