Swing Trading $5K (How to lose most of your cash)

[DeletedUser86]

Bought 850 shares of AREX @ 6.97. I wanted to keep my first post updated but for some reason I can't edit it anymore so I'll just update the last post.

4/20/15 Bought 300 shares of PE @ 16.51
4/29/15 Sold 300 shares of PE @ 17.60
+6.1%, $327
4/30/15 Bought 62 shares of TNA @ 84.82
5/8/15 Sold 62 shares of TNA @ 86.20
+1.6%, $85
5/8/15 Bought 335 shares of PE @ 16.00
5/14/15 Sold 335 shares of PE @ 17.70
+10.6, $569
5/22/2015 Bought 850 shares of AREX @ 6.97
Balance:$5,941

 

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[DeletedUser86]

Yes I know trading does not add value. Don't care. And I will post my losses. If you see an open trade then just assume I'm weathering the storm. The thing with swing trading is that most of the time you are in the red from when you bought, because otherwise you would have sold. I don't have anything to sell, no landing site, just a guy showing you the results of what I'm going to do anyway

 

[daivey]

wow, look at this guy. he only picks winners.

looks like you'll have a million soon.

 

[DeletedUser86]

Sold 850 shares of AREX @ 7.10. Held on to this one a little longer than I should looking for a breakout. I'll wait a couple days and see where it goes and buy it back if it gets 6.80-6.90, the bottom of the trendline. Daivey don't be silly.

4/20/15 Bought 300 shares of PE @ 16.51
4/29/15 Sold 300 shares of PE @ 17.60
+6.1%, $327
4/30/15 Bought 62 shares of TNA @ 84.82
5/8/15 Sold 62 shares of TNA @ 86.20
+1.6%, $85
5/8/15 Bought 335 shares of PE @ 16.00
5/14/15 Sold 335 shares of PE @ 17.70
+10.6, $569
5/22/2015 Bought 850 shares of AREX @ 6.97
6/10/2015 Sold 850 shares of ARES @ 7.10
+1.8%, $110
Ballance: $6,035

 

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[daivey]

all winners all the time bro. you're on your way to millionaire fast lane. good for you.

 

[DeletedUser86]

I don't pick winners. I buy losers. Stocks don't go in one direction forever, I try to time the rebounds. AREX was up 7% yesterday when I sold. It is down 5% today, so I bought. Not sure why all the haters on here

Anyway..Bought 873 shares of AREX @ $6.90

 

[NuclearPuma]

I've been studying stocks and options for a few years now and trading a small account for a little over a year.

Let me ask you, could you do the same with 500,000 or 1 million?

If not, why bother? I have been searching for strategies that scale weather 10,000 or 10,000,000. My personal target is 2.5% per month actively trading. Though I may be more aggressive with a smaller account.

It sounds like you have had some success and maybe have a talent for swing trading the system you have developed.

In my buy and hold account I picked out 5 stocks purchased on May 8th 2015. At close today the portfolio is up 4.5% in less than 2 months while the S&P 500 is down 0.5% since then. This after the huge 2% drop yesterday. This would be the case for whether the portfolio was $5,000 or $50,000,000 because all of the companies have a market cap over 80 billion and also, no margin or leverage is being used. Also, 4 of the 5 pay a dividend.

I've spent a lot of time analyzing options and I think many options trades are like trying to beat the house on the roulette wheel. A few in the correct circumstance and applied correctly have merit.

 

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[daivey]

I've been studying stocks and options for a few years now and trading a small account for a little over a year.

Let me ask you, could you do the same with 500,000 or 1 million?

If not, why bother? I have been searching for strategies that scale weather 10,000 or 10,000,000. My personal target is 2.5% per month actively trading. Though I may be more aggressive with a smaller account.

It sounds like you have had some success and maybe have a talent for swing trading the system you have developed.

In my buy and hold account I picked out 5 stocks purchased on May 8th 2015. At close today the portfolio is up 4.5% in less than 2 months while the S&P 500 is down 0.5% since then. This after the huge 2% drop yesterday. This would be the case for whether the portfolio was $5,000 or $50,000,000 because all of the companies have a market cap over 80 billion and also, no margin or leverage is being used. Also, 4 of the 5 pay a dividend.

I've spent a lot of time analyzing options and I think many options trades are like trying to beat the house on the roulette wheel. A few in the correct circumstance and applied correctly have merit.

what about selling options?

 

[M&A]

I don't pick winners. I buy losers. Stocks don't go in one direction forever, I try to time the rebounds. AREX was up 7% yesterday when I sold. It is down 5% today, so I bought. Not sure why all the haters on here

Anyway..Bought 873 shares of AREX @ $6.90

As a successful trader who started with modest means like yourself I can tell you right now that 5k in individual equities will get you absolutely nowhere, this isn't the tech boom where stocks triple after announcing a website.

As some others have pointed out, say your the greatest trader in the world and you achieve 300% in one year, ok you make $15,000. You will be living below the poverty line with that income.

Making 300% picking equities would interest several prop firms, hedge funds to stake you with several million. But if you did it with a 5k account nobody cares maybe 250k account and you'll spark some interest.

If you really want to consider going this trading route understand the work/research necessary. You are competing against guys who wake up at 5am everyday to compete and take money from the less informed.

I started in individual equities too because I thought thats all the market was, stocks. But found out there is far more opportunity in futures, options, CFD'S, FX for people like you with 5K. I wouldn't trade equities with anything less than $5,000,000.

I would also suggest building a business or having investments outside of trading as a speculator can always be set by an unfathomable event. Especially when your strategy is hoping "don't go in one direction forever"

 

[NuclearPuma]

what about selling options?

There are multiple selling strategies. Iron condors, vertical spreads, calendar spreads, and cash secured puts and covered calls.


I think cash secured puts and covered calls offer the lowest risk, can reduce volatility and can be good depending on the underlying stock.

Iron condors I would avoid completely. Options are priced on statistics based on volatility. The math works out that iron condors will be a loser in the long run. The only way to do this successfully with long term positive outcomes is with very good trade management. It is more trouble and a lot more risk than its worth imo.

Spreads also tend to have long term negative expectancy but I think can be good trades if you are good at predicting direction.

Also, I think options are best sold at expirations 1 to 3 months out.

Covered calls and cash secured puts limit leverage where spread trades allow quite a bit of leverage that can lead to large losses.

There was an academic study I came accross that concluded 80% of options traders underperform stock traders.

I believe you can outperform the s&p by picking a handful of good stocks and the ease and risk is a lot lower than leveraging with options.

 

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[MJ DeMarco]

Bought 873 shares of AREX @ $6.90

Since today was a big up move for the market and AREX didn't follow (it's now tanked in the low 6's) I was wondering what's the plan now? Recommit capital elsewhere? Wait it out?

 

[MJ DeMarco]

Since today was a big up move for the market and AREX didn't follow (it's now tanked in the low 6's) I was wondering what's the plan now? Recommit capital elsewhere? Wait it out?

Bump.

Now in the high 5's and what I consider below support... still would like to hear what the plan is. You need close to 20% to get back to your buy price... I'm hoping the "wait and see" strategy is not the strategy.

Perhaps wait for an overdue uptick (regardless of size) and redeploy? Stick w/AREX? What's the plan Stan?

 

[loop101]

I applaud the OP for taking action and sharing his results.

 

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[iAmTrade]

I've dabbled in trading securities in the past but what I liked is the fact that diversification can lead to profits, as the losses of some will offset the gains of another.

I think the banking total was over 6k? No diversification- since you're at 873 shares at 6.9$... all eggs in one basket.

Come on. You're smarter than this, you know.

From my experience, and from the experiences of others, I will reiterate to the proportionate fact that emotion is what leads to ones failures. You need to keep it out of the game.

The reason wall street has soo many- do this, if this happens, do that, if that happens do what you did 5 days ago etc... its all procedural, with varying degrees of.... sell at 10% gain or 15% or 20% etc.

There is a system- what does a system do? It removes ones emotions.

We are creatures of emotion Mr. Gray. And it is what daunts our progress. Who here can dance? Raise your hand...no one does... YET I never specified that you must be a good dancer...yet people think- I must be a good dancer in order to raise my hand? Why? Because of fear, of humiliation if such failure encompasses. For all I know you'll never return to this thread because you lost?

I know for a fact-

There is nothing mathematical about human emotion. If all trades are based on "emotion" of "we'll set a rule to sell at 10% gains- because I believe its a good margin-and I'm the boss so you'll listen to me"...so lets put that into the company handbook/guide for our traders... guess what? You're not well off whatsoever- because the actions that lead to ups or downs are contingent on emotion itself.

Heres emotion from me- If I lost 5,500$ on stocks I would be angry because I know I could have used that on dinner with a loved one/paid a mortgage/new car etc.

Heres logic- found something that earns you $ guaranteed and I can always have dinner at a restaurant with a loved one.

An example of no-emotion- go to a casino- the dealers play a certain way, only hit at certain times etc... no emotion from them- just standard % and math...end result- casinos get bigger and a persons wallet shrinks.

You need a completely, non-emotion- do this, do this, do that, do this, do that- type of system in place- be the emotionless casino, and you will have a greater base to trading.

Systems work- randomness doesn't- and dam, stocks are random as heck- because people on them are with emotion.

---
Not sure if this makes sense...but I hope you get the point- the 5.5k$ spent could have been put to better use- that fulfills more of the commandments from the Millionaire Fastlane Book.

Remember- don't use stocks/ira's etc to become a millionaire- use them for that nominal rate of return you need to retire, using the money you worked hard to get- that one million, to earn you 100k a year from those vary bonds or stocks you'll have invested...to "keep you where you want to be financially."

 

[MJ DeMarco]

I just hope the OP posts his losses. So far, he's only posted winners. I will assume if he suddenly *disappears* and the thread goes dead, we will know what that means.

LOL.

 

[daivey]

LOL.

yeah pretty LOL.

im sure he will be back with a magical winner to show how skilled he is.. specially with the markets tanking and all.

 

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[MJ DeMarco]

im sure he will be back

He has been back-- but has chosen to ignore my questions. I merely asked what the plan was. I guess the plan is no plan. A trader should be mechanical and know entry/exit before participating.

 

[biophase]

Remember you never lose if you never sell!

 

[Guest3722A]

If I was a bagholder of AREX, here's how I'd approach it.

See in this chart that yellow line that touches each and every one of the weekly candlesticks. Today it closed down and away from it. So, looking to next week, I think there's a pretty high chance the price will go to that line (good) OR that line will go to the price (bad). Either way, my money says the price is going to touch that line. And, if it's the price that goes to it, chances are pretty good that it will go through it slightly too. This is the area I'd hope to sell out at, at a loss. I wouldn't double down or none of that. I would just try to get out right there, and hope it would happen in the first day or two. If it went against this plan completely, I would just dump it, lick my wounds and pick the next fight somewhere else. Either way, if it were me, I'd take the loss.

edit: btw, the forum software I'm pretty sure will update this chart if anyone wants to see how the call plays out

 

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[iAmTrade]

I don't really mind that you lost this bud.

Can you just tell us what is on your mind now? What did you learn? What do you suggest others don't do, or should do if they want to try trading stocks etc.

WOW us with experience you have gained, NOT results, though if greatly positive feel free to share how/what you did/why you did it etc.

Take this as a learning experience.

 

[DeletedUser394]

Forget building a business that improves people's lives (even if just a tiny bit) with a product or service that they want...., what I'm really interested in is getting into Binary Options and Swing Trading. Those types of threads have gone so well for the OPs.

 

[MJ DeMarco]

I don't really mind that you lost this bud.

Technically he hasn't lost if he hasn't sold, which is why I asked the plan moving forward because this stock has moved beyond a feasible "swing trade".

Wait to B/E? Sell and retool? As of now his account would be $4,700 and all of the aforementioned gains/*wins* have evaporated. At this point is when people disappear and quit, realizing that the market isn't as simple as you think.

 

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[loop101]

Below is a comparison of AREX (blue) and CLQ5 (black, crude oil futures price).

The OP is trading oil by proxy.

 

[Rawr]

Remember you never lose if you never sell!

That's right baby. Go hard RTGV! Sure, been holding for 4 years, 99.9% of my money was wiped out, they changed the name, then again, but as long as I don't sell there's always hope!!


I don't even bother to look at these types of threads anymore.. only saw it cause MJ posted in it. STOP CHOOSING TO GET EATEN BY SHARKS IN FOREX AND STOCKS, STOP IT PIGGIES!!

 

[iAmTrade]

I don't dabble a lot with stocks, because it doesn't offer that "guaranteed" rate of return you can almost "guarantee" yourself if you opened a business or loaned it at Lending Club or something else like that

but...

The best time to buy is when no one in their right mind would buy (because then its at its lowest price), within set limitations of course.

 

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[M&A]

I don't dabble a lot with stocks, because it doesn't offer that "guaranteed" rate of return you can almost "guarantee" yourself if you opened a business or loaned it at Lending Club or something else like that

but...

The best time to buy is when no one in their right mind would buy (because then its at its lowest price), within set limitations of course.

The best time to buy or sell is when the potential risk reward is greater than 3:1 preferable 4:1 or even as high as 10:1.

The main reason all these day traders fail isn't because commissions kill them, its because its very difficult to find great risk reward intraday.

I have to be right just 33% of the time break even if my R:R is 3:1 which is entirely manageable. I might risk 10% of my account and try bank 30-70% on a real high conviction idea.

My profits off one idea, others call them trades eclipse even a string of losses.

Thats the real secret to growing a small account to a very large one.

Find high R:R opportunities decide how much to risk and watch your account compound. Don't chase BS noise trades like 90% of people do.

 

[Leo Hendrix]

Better off speculating with Bitcoin

 

[MJ DeMarco]

Sorry, couldn't resist. Still waiting for update, plan, anything.

 

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[brickco]

Mid 5's...

Less than half a million cash, and 106 million in accounts payable. Interesting. If I were a gambling man (I'm not) I would bet this goes lower.

 

[MJ DeMarco]

The "swing trade" is now at 4.67 -- $5,500 is now worth $3,959.50 -- I'll give the OP until the end of the week to respond with his strategy moving forward. If no response comes, Ill close the thread. As I mentioned when this started, I'm not big on these trading threads as they all start and finish the same: Post winners, when losers come, disappear.