When Trading Meets DividendWarrior

[CookieMonsta88]

Hi,

I have been thinking, is there a way to mix dividend investing and trading together. And this method is dividendwarrior inspired. Dividendwarrior does drip investing, which is a fantastic way to grow your capital, but you need time and quite a huge sum of money to begin off in the first place. So for people who are low funded, how can we get out of the rat race quicker?

well, we can trade and scalp intra-day for a fixed amount of money say $25 to be capital contribution for the drip investment account. so needless to say, $25 is just a ballpark figure, if you can produce more or have more capital to generate extra capital to feed into the drip investing account, we can always go for more. Hence, we can try to push out capital contribution to be at the rate of once per day, which will be approx 250 working days, which is 250 times per year. well this method is to use effort and skill to generate money to feed into drip stocks and pave your way into financial freedom.

the primary skill sets will be intra-day scalping and drip stock analysis. And it is suitable for people with low funds say $1000 to begin investing right away, except that the learning curve will be quite tough for scalp trading and analysis of the stock's fundamental

what do u guys think about this method of operating?

 

[kebinu]

Depending on how much risk you can take. I started with trading and will start investing in the next bear.

Still waiting patiently while trading right now.

 

[Shiny Things]

what do u guys think about this method of operating?

Honestly mate, I think it's nonsensical.

Dividend investment and intraday punting are two entirely different skill-sets. They're literally polar opposites. The sort of people who want to park their cash in dividend stocks and reinvest it every so often are the opposite of the sort of people who want to spend all day in front of a screen trying to scrounge up a few ticks here and there.

Second thing: intraday trading doesn't give you a steady income stream. Saying "scalp for $25 a day" sort of assumes you'll make a regular amount of money every day, and that's just disastrously wrong.

Third thing: once the cash is sitting in dividend stocks, you can't use that cash to day-trade unless your broker offers margin trading. And if you only have a few thousand dollars, the brokerage costs ($20-$30 a round trip) will incinerate you.

This is a terrible idea. Sorry to be so blunt, but that's the way it is.

 

[CookieMonsta88]

Honestly mate, I think it's nonsensical.

Dividend investment and intraday punting are two entirely different skill-sets. They're literally polar opposites. The sort of people who want to park their cash in dividend stocks and reinvest it every so often are the opposite of the sort of people who want to spend all day in front of a screen trying to scrounge up a few ticks here and there.

Second thing: intraday trading doesn't give you a steady income stream. Saying "scalp for $25 a day" sort of assumes you'll make a regular amount of money every day, and that's just disastrously wrong.

Third thing: once the cash is sitting in dividend stocks, you can't use that cash to day-trade unless your broker offers margin trading. And if you only have a few thousand dollars, the brokerage costs ($20-$30 a round trip) will incinerate you.

This is a terrible idea. Sorry to be so blunt, but that's the way it is.

i don't think u get the point, its because they are polar opposites, that is why it works. day trade the forex and use the profits to feed the dividend investment, its net $25 on bigger account say 1000 or 2000 dollars account so it can be 1% profit, adjusted to the volatility. scalping itself will already take up quite alot of time, so u need a lower effort strategy to invest the money.

but seriously, if i can do both why would i not do both? it just sounds like the kind of talk whereby if ur a trader u can't invest and if ur an investor u can't trade. what nonsense is this? i have seen industry professionals who can do many more stuff on both the trading side and investing side and excel at both of them at the same time.

and i never said im using my capital to buy stocks outright and margin them for trading again, i said to use the capital as margin, then use the profits for slow accumulation of stocks.

 

[Dividends Moderator]

I kind agree but .. Do note that this is ideal for retirees or without a full-day job due to it's time consuming hybrid mix. Anyway, follow your heart and huat

 

[holysmokes]

Sounds like the usual "trade to build up investment capital" method.

Try loh. Possible outcomes:
1) works the way u imagined.
2) scalping lose money, so no capital to invest.
3) scalping makes money, but investment lose some or all of it.

Just make sure ur seed capital is 100% riskable, and that you actually keep going for at least a year.

 

[limster]

i don't think u get the point, its because they are polar opposites, that is why it works.

That sound similar to saying that since FA and TA are different types of analysis, by combining them into FATA, you have a 'sure win' strategy?

On the other hand, if what you are saying is that you have a dividend warrior strategy, and you are feeling bored, nothing to update in your blog because dividend investing is as boring like watching grass grow, then you might want to allocate 5% to punting so that you can have something interesting to write in your blog, then sure go ahead. Nothing special about that...

 

[CookieMonsta88]

That sound similar to saying that since FA and TA are different types of analysis, by combining them into FATA, you have a 'sure win' strategy?

On the other hand, if what you are saying is that you have a dividend warrior strategy, and you are feeling bored, nothing to update in your blog because dividend investing is as boring like watching grass grow, then you might want to allocate 5% to punting so that you can have something interesting to write in your blog, then sure go ahead. Nothing special about that...

the 2nd point u are making which i am referring to, yes thats what im saying, the first is not what im trying to express. but the outset is because of my position that i have very little funds in the first place, so dividend re-investing is like a snowballing machine, it takes time, but it is very powerful, so im experimenting to see how low can i push my funds to and still become successful in a short span of time, while still taking care of the longer term aspects too.

 

[supratentorium]

i don't think u get the point, its because they are polar opposites, that is why it works. day trade the forex and use the profits to feed the dividend investment, its net $25 on bigger account say 1000 or 2000 dollars account so it can be 1% profit, adjusted to the volatility. scalping itself will already take up quite alot of time, so u need a lower effort strategy to invest the money.

but seriously, if i can do both why would i not do both? it just sounds like the kind of talk whereby if ur a trader u can't invest and if ur an investor u can't trade. what nonsense is this? i have seen industry professionals who can do many more stuff on both the trading side and investing side and excel at both of them at the same time.

and i never said im using my capital to buy stocks outright and margin them for trading again, i said to use the capital as margin, then use the profits for slow accumulation of stocks.

If you can trade in and out of the market on a successful level, i will use the analogy that you are able to use a scalpel and surgically rip pieces out of the market. That involves timing i.e. trading near pivots (turning points) and you could easily make lots of money by compounding.

Now if you could do that, I don't think you will be buying stocks for dividends with a blunt butcher knife not to say you can't invest that money in something tangible. You have a whole new world opened up to you, you have the ability to profit from price fluctuations from any instrument you pick but alas, getting there is another story.

 

[CookieMonsta88]

If you can trade in and out of the market on a successful level, i will use the analogy that you are able to use a scalpel and surgically rip pieces out of the market. That involves timing i.e. trading near pivots (turning points) and you could easily make lots of money by compounding.

Now if you could do that, I don't think you will be buying stocks for dividends with a blunt butcher knife not to say you can't invest that money in something tangible. You have a whole new world opened up to you, you have the ability to profit from price fluctuations from any instrument you pick but alas, getting there is another story.

hi

well its part of my experience in the markets, that made me do this, that it is quite impossible to predict that the markets can give me a fixed amount of income, my $25 calculation is based on volatility adjusted figure of 10pips a day while the average volatility is about 50pips per day to 100pips per day, so factoring in losses intra-day 10pips should be ok. but as per the ukraine crisis, and thru that till september and october, trading was exceedingly difficult, because it was u vs hft essentially, the volatility was very low to say 20-30pips per day, if u lose money that day, it might be it, and feeling the markets was a pain because the move lasts 10mins and then thats it, i was observing the markets through that period where everyone else did not dare to anything, and orderflow was really scarce, as we were looking at 2 big events happening, which is ukrain crisis and QE plan from feds, that was enough to stop flow from coming and make it a market maker's market which u as retail don't want to trade in because without the other big guys to counteract the market makers they can just push price around as they like because thats what their job is, there is a negative edge in these scenario, for like 5months, so it is this experience which led me to want to do investing as well for stability of my finances. its these special situations which make me look back and wonder, so what if i have some skill, the markets give u what the market thinks u should have.

 

[Dividends Moderator]

Chill folks, what a complexity.

In layman terms, Cookie is trying to state that the (trading) profits may be channeled into (long-term) investments, ensuring a dual-stream income and diversifying risks into two different strategic classes.

D.M

 

[CookieMonsta88]

Chill folks, what a complexity.

In layman terms, Cookie is trying to state that the (trading) profits may be channeled into (long-term) investments, ensuring a dual-stream income and diversifying risks into two different strategic classes.

D.M

yea, exactly what i was trying to express

 

[simon_84]

hmm, i trade 20% of my capital while the rest of the 80% is for investing.
while once a while if any holding stock has some amount of capital gains, would divest and look for other opportunities.

 

[sAVaGEmP5]

Stock very ez to play one

If stock price volatile, i trade lor.
If stock price not volatile, i invest lor.

Using VIX index analysis and how many shares ppl buy and sell, u can be god in stock analysis just with share price movement.

 

[econsmagic]

Need a lot of time and effort. Mentality do play a part and agree with daytrader about need ing a edge

 

[Dividends Moderator]

Day trading requires extensive research and intensive practice. Based on your strategy, you ought to be firm and trade patiently with conviction.

Over the past 1-2years, after paying considerable tuition fees, I'm ready to go.

How about you?

 

[supratentorium]

hi

well its part of my experience in the markets, that made me do this, that it is quite impossible to predict that the markets can give me a fixed amount of income, my $25 calculation is based on volatility adjusted figure of 10pips a day while the average volatility is about 50pips per day to 100pips per day, so factoring in losses intra-day 10pips should be ok. but as per the ukraine crisis, and thru that till september and october, trading was exceedingly difficult, because it was u vs hft essentially, the volatility was very low to say 20-30pips per day, if u lose money that day, it might be it, and feeling the markets was a pain because the move lasts 10mins and then thats it, i was observing the markets through that period where everyone else did not dare to anything, and orderflow was really scarce, as we were looking at 2 big events happening, which is ukrain crisis and QE plan from feds, that was enough to stop flow from coming and make it a market maker's market which u as retail don't want to trade in because without the other big guys to counteract the market makers they can just push price around as they like because thats what their job is, there is a negative edge in these scenario, for like 5months, so it is this experience which led me to want to do investing as well for stability of my finances. its these special situations which make me look back and wonder, so what if i have some skill, the markets give u what the market thinks u should have.

What timeframe are you looking at, what's the average swing size of your timeframe for the past 1 year?
The markets move in the same tendency, not different than a century ago irregardless of what HFT. Volatility contracts then it expands, over and over, i know cliche sounding.
The big guys, the market makers,you can blame them all you want. But they are your "guides" if you think about it.
Best of luck.

 

[CookieMonsta88]

What timeframe are you looking at, what's the average swing size of your timeframe for the past 1 year?
The markets move in the same tendency, not different than a century ago irregardless of what HFT. Volatility contracts then it expands, over and over, i know cliche sounding.
The big guys, the market makers,you can blame them all you want. But they are your "guides" if you think about it.
Best of luck.

im trading the daily for trend bias, trading in the 1 hrly direction, with the 5m for managing position and to scale in and out.

well as i said, its a special situation, the problem is not the big guys being in the markets, the problem is there is not enough big guys in the markets, its the more the merrier, but there is just not enough people to trade, and that is why the liquidity is drying. the problem is not the big guy, its the lack of liquidity, to the extend that u can see gaps on the 5min charts very very frequently during the opening hours, all because everyone is trying to look at the outcome of the 2 special situations i have mentioned. there is volatility which is easy to trade whether its expanding or contracting, then there is jerky volatility, which is showing illiquidity of the markets, which is showing there may be something systemically not right somewhere, only in october to november did the liquidity come back on and mind u, this is the eurusd pair, which is supposed to be the most liquid pair of currency. when liquidity is thin it becomes difficult to feel the markets. what it felt like was the market was dying because of a lack of liquidity and going to go flat.

 

[sAVaGEmP5]

It is very difficult to make money from day trading or scalping unless you have an edge. If you don’t know what an edge is or what your edge is, you don’t have one.

SGX Derivatives Trader.

Words of Wisdom, must be very pro this guy. Quote first.

DayTrader
Junior Member

Join Date: Dec 2014
Posts: 1

 

[CookieMonsta88]

It is very difficult to make money from day trading or scalping unless you have an edge. If you don’t know what an edge is or what your edge is, you don’t have one.

SGX Derivatives Trader.

having an edge includes knowing when the edge is not working out as well, what kind of market conditions is best suited for this edge and what kinds of market condition is suboptimal for this edge, and staying out of the market when the edge is not working out. otherwise the account will just nickel and dime itself to death. for intraday the edge is usually based on order flows and very little on technicals unless there are some significant s&r for stop runs or continuation by triggering the stops for strong momentum pushes, and also indicator levels to trigger some flows from indicator guys, and contra these indicator guys, can even play the intra-day main trend's profit taking action by contra-ing the top too while it is retracing.