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Online Share Trading

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Russ
Super Contributor
it's flippin'time decay that's killing me.I have come to the conclusion that the game of derivatives is so heavily weighted against us that we might as well be playing roulette.Sure,some win,but is it skill or is it luck?Find the edge?Maybe some have,but a precious few,I bet.If it wasn't for the dopamine rush we get from our little successes we would all be out of here in a shot.This from someone who's been here for about 5 years and still can't win consistently.Newbees,be warned-you won't get this warning from OST who must be creaming it from idiots like me.Not only are the odds stacked against you but there are multiple psychological factors that are probably working against you without you even knowing it.Good luck to you all.
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48 REPLIES 48
asylum
Super Contributor
thats the reason why i dont touch warrants.
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HateGauteng
Super Contributor
Yep, I win more often at poker than SSFs.
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SD
Contributor
Can you please elaborate more on that? What examples could you give us?
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SkarlakenKoos
Frequent Contributor
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Not applicable
Then which ever share you in must not be moving ?
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Or move in the wrong direction.
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Not applicable
Hmm Yes, in that case ... where the stop ?
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Russ
Super Contributor
Exactly,and sometimes you can ride out the dips,but if it takes time to recover you suddenly see time decay start moving up,then your share really has to recover strongly to get you anywhere near where you were before.Of course stop losses are the easy answer,but how many times havn't you cut your losses only to find your share shoot up and you lose out?But if you don't cut your losses and you start going down then suddenly the loss becomes more than you want to take,and then it becomes even more and you hope for a recovery while your losses mount.Havn't you seen guys eventually selling their warrant at 1 or 2c just before it expires worthless-that's heartbreaking!These are some of the psychological factors I am talking about.
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SimonPB
Valued Contributor
russ, from this post - you're too scared of missing out .. largely that's why you ignore your stop and if you do that then expect to loose money consistantly .. trading is a numbers game, sure you'll get losses and sometimes you get stopped out and suddenly it reverses .. that's trading ..
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Russs, your TA is then wrong or your system is beating you. Change these and develop your system better. I have learnt, TA and system says sell I SELL. TA says buy I BUY. Sometimes these are not 100% correct so i take a small loss but I rather take 100 small losses and have 20 fanststic gains to wipe out the losses than one big loss. I know the feelig of selling before exipry and taking a huge knock so I went back to school, attended a few OST courses to refresh my mind, looked at my system and have taken 90% emotion out of it. the 10% emotion I leave for that itchy feeling below ;-)
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Russ
Super Contributor
Then let's talk about when to take profits.About 80% of my warrants go into profit and about 80% of the time I end up losing.That also screws the brain.I reckon this game is only suitable for robots.
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It does not matter Russ, there is your first problem and i quote "Of course stop losses are the easy answer,but how many times havn't you cut your losses only to find your share shoot up and you lose out ?" .... rather lose out than lose capital and now many time time have you hear this .... there is always 2 morro. It is impossible to trade without a stop you will lose it all
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Russ, an old afrikaans saying holds true "Pennies make die Pond" my granparent repeated this over and over and basically it is YOU take care of the small stuff and the big stuff takes care of its self.
So how much profit do you want from every trade? Thats your system that is screwed. You have to leave a little meat on the bone for the next guy. You cannot and will not EVER get all the fat out of the market.
Example take a standard call warrant of 30c. you buy 100k of these with costs etc your total is about R30,100-00. where do you exit?
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I negotiated an extrememly low commision fee on CFDs with my broker and I can trade 1 share if I want to without a minumum fee. This is because I trade many small positions. The less commission pain you feel on a trade/stop, the more freedom you'll have in your trades.
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Sorry to clarify, the warrant is positive little time decay (maybe 100 to 110 day left) and there share is range bound with slower highs (not swinging 10 or 15% every day), but does drop to its lows or close to the lows every few days then slowly tricles up over 4-5 days again to new highs. Where would you trade? Would you trade? Remember decay works over every day even if there is time in the trade.
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venice
Super Contributor
Most traders will finish their trading account off within a few years. Most people confuse luck with skill and will take bigger risks until boom there goes the account. Simply put 90% of those reading this post will be gone within two to three years. The other 10% will be sucessful taking the other 90%'s money, there is always another to fill the leavers place status quo maintained. This is the way of the stock market always has been.
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you make the call. Then. If it goes in your favour you are fine. If not you are wrong on this one and get out. Then breathe. Wait until that play doesn't effect your analysis anymore. Then wait some more. Then re evaluate afresh. You can always get back in. Don't wait to be be proved right in the future.
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Ja, but guys, I hear Russ' frustration. Stocks have basically 3 options 1) Up is everyone's favourite (unless your short) 2) down is easy - let your stop take you out. 3) sideways - oi vey, the real killer. i don't have stats on this, but I reckon 80% of share price movements are sideways meaning 2 things a) you run massive risk of getting stopped out unnecessarily and b) time decay, the silent killer. If it is not warrants, it is holding costs on SSF's and CFDS. Look up SeaPea's post from his floor trading experiences in the late 60's. After the crash ('68, I think) he recconned it took some stocks up to 5 years to recover and start trending again
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Seapea ? Poor guy why did he not short the market ? could he ? so ? the point is ?
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