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Chartist's 50K day

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kwagga
Super Contributor
Forbes means nothing. You need a measure to estimate wealth. Traders doen't own stock, so how do you measure their wealth ?
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Werner_1
Super Contributor
I can assure you there isnt many traders that are richer than Bill Gates and/or Warren Buffett.
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Werner_1
Super Contributor
The wealth on the forbes rich list, e.g. Bill Gates, wasnt bought into stocks, it was made with the very stocks the vast wealth is current stored in.
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BRE
Regular Contributor
Can you compare the two? How long has Buffet been investing and how long has day trading been possible? I also wouldn't class Bill Gates as an investor as he made his money by building a company rather than investing in a company that was ran by someone else. But that's not the issue here, it's a question of who's more successful, traders or investors. Traders can make more money using leverage and being able to trade both long and short and that's the reality. But at the same time they can also loose more money. However, using the old adage: let winners runs and cut loss losses can go a long long way.
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Werner_1
Super Contributor
did you read "The Snowball"? OK Buffett did build a company but what about his partnership, that was an early implementation of a hedge fund - investing was its primary service/product. Buffett is an investor above anything else, just a very clever one at that who implemented some really clever strategies to grow his wealth, but all based on solid long term investing principles. Jesse Livermore was considered a trader - he was operating way before Warren Buffett was even born or around the time Buffett was born, so I think your comment that trading didnt exist for so long isnt 100% true. Livermore operated around the 1900 about the same time John Pierpont Morgan was head of JPMorgan & Co. that was long ago, OK the technology wasnt the same, but the strategies and ability for the elite was there on Wall Street, even if you had to operate within the NYSE buildings.
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Werner_1
Super Contributor
lol. sorry, Bill Gates wasnt an investor, i got that wrong... but now he is, to a certain degree...
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BRE
Regular Contributor
hehe, we nit picking here but fact of the matter is when using leveraged instruments you can make more money than with buy and hold and there are a few people that do but if I had the money I'd do the latter as it has far less risk and is far less time consuming. It is the better option I think, but only if you have the money, which I don't. The thing is I can get their quicker by trading with money I can afford to loose at this point in time, but that doesn't make it better, just quicker
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Werner_1
Super Contributor
true, one must just be careful not to get on the wrong side of that leverage... sorry for all the comments, i actually like discussing such stuff, i really enjoy it. hehe..
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BRE
Regular Contributor
No need to apologize, sharing views and debating in a civilized manner is healthy
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Werner_1
Super Contributor
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louisg
Super Contributor
And no 20% per month is not a typo. BRE, the problem is that if one managed a return of 20% a month CONSISTENTLY then the following will happen to R1 MILLION over 5,6,7,8,9,10 years.....R51.4 BILLION, R458.2 BILLION, R4.1 TRILLION, R36.4 TRILLION, R324.8 TRILLION and R2.9 QUADRILLION respectively. Not going to happen, it DEFIES LOGIC. Extrapolation has caused many to lose their shirts. A newbie reading that Chartist made 50K in one day reckons 20 trading days times 50K = R 1 MILLION...BINGO. It doesn't happen that way in the real world. The experienced traders/investors should tell them so. "The fish sees the bait not the hook; a man sees not the danger only the profit." Chinese Proverb. Making 50K (or any other amount) is easy, the hard part is doing it consistently. It's the COLLECTIVE result that matters, NOT any SINGLE trade. The health of the FOREST is what is important, not any individual TREE. My thoughts anyways.
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john_1
Super Contributor
LG the warning is correct..however after having discussed this with you at least 10 times you still have not quite got the point... traders are not compounding there gains... they are living off them... trading is about income generation... investing is about wealth creation..it is absolutly possible to make 5/10/50K a day what is not possible is to compound it every day..
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Werner_1
Super Contributor
then i think the point one needs to look at is that long term investing with compounding will generate more money over time, is that true? I guess where the arguements go is actually useless, because it seems short term traders dont want proper day jobs which also generate income, they want to make it their jobs, whereas long term investors have other careers and are building wealth with long term holdings - a vastly different mindset in the end. But the traders tend to try to tell the investors they are outdated and have "low skill" strategies and that they can make more money than long term guys -> i think this is what causes the investors to retaliate.
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john_1
Super Contributor
If I had 200 million in the bank would I day trade...I dont think so. There is obviously room for both stratergies. Truth is I would love to be an investor only. I am not a fool and compounding is a increadable wealth creator...That said, you will never be able to convince me that there is a reason to hold when a long term down trend is broken..1 in 4 years have negative returns on the market on average.. the best wealth creating stratergy you can develop is some way of letting you know when not to be in the market...the rest you can leave to compounding
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john_1
Super Contributor
to answer your question... its all dependent on the base you are coming off and how long you are in the game...You can get 40% returns every years and still retire below the bread line if you started investing at 50 with 10k... you can also turn that 10k into 10 bar in 5 years with trading and take home 50k a day for the rest of your life... the statergy has got to fit the goal.
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Werner_1
Super Contributor
did you see my Apple post? you right about that sometimes markets take a downturn, Jamie Dimon says theres a crisis/major correction every 5-7 years, so if one prepares for that one can make the most of it. I dont like selling though, because that involves timing a volatile market which could lead to missed opportunities, etc. i like to build reserves and allocate more to excellent opportunities in these times, thats what i did in the crisis just past with some good success, it also reduces tax, broker costs and one cannot get timing correct always. most people, even the pros get this wrong very often. My strategy is to build long term wealth with excellent companies (note: i say companies because i dont believe in buying the share, i want to own part of the company) in various market to reduce country specific and currency risk while using funds generated from other business to finance this -> the selection methods used to identify the companies is quite interesting and as a result i dont agree with you comments that buy and hold is "low skill" (sorry i dont think i can forget that) because this selecting is the one of the most important aspect of long term investing - many who arnt really that into long term investing doesnt understand that though.
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john_1
Super Contributor
On that note let me explain my trading goal.. I started trading not to get rich but because as a 38 year old white male with 2 kids. Knowing that I have no studied profession to fall back on...If I was forced by circumstance to leave SA I would not be able to move with the business I was involved in. So trading for me has created an oppertunity to work and earn in way that seperates me and my location from my income. All I need is a market and a computer and I can feed my family. It was/is more about the skill then about wealth. It was entirly about cash flow generation rather than wealth creation.. now that I have those skills my motivation for sitting in front of my computer all day has diminished considerably. I would much rather be dealing in tangible assets and building relationships but I know that if the preverbial ***** hit the fan I will be ok.. and trading and the market has given me that.
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john_1
Super Contributor
Oh Werner .. please... that low skill jibe was exactly that.. it was just meant to rattle ol LG's cage.. I was sure you would see that. In truth for me picking stock is highly over rated and a very very low skill event indeed .. buy the winners, sell the loser and leave the rest alone.
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prancing_horse
Super Contributor
Not entirely true, you must remember the effect tax has on getting in and out of stocks, a long term portfolio, will soon be regarded as a trading one by SARS should you liquidate some of them.My main portfolio is one started almost 30 years ago and have never sold, just added cash and accumulated shares, however to satisfy the gambler in me I do have a portfolio where I buy and sell plus a SSF and CFD account, and in these one sees the effect that tax has on the bottom line.I enjoy trading, it's risking, and should be done within one's means, in other words with capital you can afford to loose.I plan to retire from full time business next year when I have my 3rd 59th birthday, and will be in a position to live comfortably off my dividends, but it won't stop me trading, in fact I hope to trade more, merely to keep the grey matter going.One needs to go to my posts of 10 & 30 Nov to see where I stand on this subject.Golfers say "drive for show, putt for dough", in a way the same could apply to trading and investing.I say invest first, trade once you have put your safety net in place, unfortunately it takes a life time of hard work and discipline to get really wealthy, unless you have very wealthy relations that did not know how to enjoy their money
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john_1
Super Contributor
Agreed, on all fronts...except the tax thing..that is something that was put in place to protect lazy fat cat asset managers. The entire point of a market is that it is liquid, Tax has a massive bearing on the performance but there are ways for a motivated traders to get arround those issues.
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