Stock trading wealth

[idrinkecoke]

Do people become rich by trading stocks?

 

[wahkao3]

i made a good sum by investing, which is way easier than trading
and i can hold a full day job

but u need to know how to analyse stocks with TA+FA

 

[Perisher]

In the most simplistic way of looking at it, the answer is Yes, there are indeed people who became rich through trading stocks. Not that it's gonna happen to any random folks though.

 

[Sinkie]

My paper loss was more than $70,000 from trading last year

 

[Sinkie]

In the most simplistic way of looking at it, the answer is Yes, there are indeed people who became rich through trading stocks. Not that it's gonna happen to any random folks though.

Actually answer is yes but it will make a lot of people dreams. When people dream they will try 1-2 time and lose money, then they will conclude trading is not for them lol.

 

[peterchan75]

My paper loss was more than $70,000 from trading last year

Tia-gong you have already made it back plus some more.

 

[BBCWatcher]

There's always some cost to buy and then to sell stocks (commissions, exchange fees, taxes, etc.) And whatever funds you're using (even if leveraged) are not free since they could be tucked away in a AAA rated government bond, collecting interest. Leverage (margin), if you do that, probably requires paying some interest to the broker. Thus, even if the stock price doesn't change, you would lose money. This characteristic of stock trading is the same as the casino's motto: "the house always wins."

To the extent stock trading resembles gambling, a few people make money (fewer over a sustained period of time), and a lot of people lose money. To the extent stock trading resembles investment, more people make money.

What's the difference between gambling and investment? There are some key markers: velocity, regularity, diversification, leverage. The more "churn" (higher velocity trading), the more gambling you're doing. The more irregular your market participation, the more gambling you're doing. The less diversification you have, the more gambling you're doing. The more leverage you have, the more gambling you're doing. A typical, true investment strategy involves dollar cost averaging (for example $500/month, every month, for an entire working career) into a well diversified, low cost stock index fund, with a regular monthly drawdown starting at age 65 (for example) of, say, 3% per year. And with zero leverage with the possible exception of one mortgage on a reasonably sized primary residence. Variations are possible and still what most people would consider true investing, but the farther you get away from that "ideal" the more gambling you're doing.

 

[Perisher]

I found a easier way to differentiate between gambling and investing.
If you can earn consistent profit with whatever strategy/methods, you are investing.
Otherwise, you are gambling.

 

[w1rbelw1nd]

To the extent stock trading resembles gambling, a few people make money (fewer over a sustained period of time), and a lot of people lose money. To the extent stock trading resembles investment, more people make money.

What's the difference between gambling and investment? There are some key markers: velocity, regularity, diversification, leverage. The more "churn" (higher velocity trading), the more gambling you're doing. The more irregular your market participation, the more gambling you're doing. The less diversification you have, the more gambling you're doing. The more leverage you have, the more gambling you're doing. A typical, true investment strategy involves dollar cost averaging (for example $500/month, every month, for an entire working career) into a well diversified, low cost stock index fund, with a regular monthly drawdown starting at age 65 (for example) of, say, 3% per year. And with zero leverage with the possible exception of one mortgage on a reasonably sized primary residence. Variations are possible and still what most people would consider true investing, but the farther you get away from that "ideal" the more gambling you're doing.

You have worded it well, and this is also aligned to my personal principles and beliefs as well.

 

[sAVaGEmP5]

u know why ppl cant make money in trading ?

Because the qns of this thread is focus on trading Yes/No, not how trading is compared with investing. and yet we are blind folded because most ppl simply cannot do trading. Its like play computer games FPS. U dunno y some ppl are always ranked first or top frag <<---- referring to myself

With a proper edge, u can exploit the markets day in day out with law of large numbers gaining a small % of wins.

Why did i ask the qns abt investing ? Because not every1 can trade and trade well, but it doesnt meant trading is no good or is a form of gambling.

 

[sAVaGEmP5]

There's always some cost to buy and then to sell stocks (commissions, exchange fees, taxes, etc.) And whatever funds you're using (even if leveraged) are not free since they could be tucked away in a AAA rated government bond, collecting interest. Leverage (margin), if you do that, probably requires paying some interest to the broker. Thus, even if the stock price doesn't change, you would lose money. This characteristic of stock trading is the same as the casino's motto: "the house always wins."

To the extent stock trading resembles gambling, a few people make money (fewer over a sustained period of time), and a lot of people lose money. To the extent stock trading resembles investment, more people make money.

What's the difference between gambling and investment? There are some key markers: velocity, regularity, diversification, leverage. The more "churn" (higher velocity trading), the more gambling you're doing. The more irregular your market participation, the more gambling you're doing. The less diversification you have, the more gambling you're doing. The more leverage you have, the more gambling you're doing. A typical, true investment strategy involves dollar cost averaging (for example $500/month, every month, for an entire working career) into a well diversified, low cost stock index fund, with a regular monthly drawdown starting at age 65 (for example) of, say, 3% per year. And with zero leverage with the possible exception of one mortgage on a reasonably sized primary residence. Variations are possible and still what most people would consider true investing, but the farther you get away from that "ideal" the more gambling you're doing.

Simply, i guess u dont understand trading at all, so please do not attempt to talk about trading.

My daily routines goes around look at 200-500 set of option pricing, stock and futures prices, looking at robotic vs human orders, trying to set new prices, or sometimes incidentally manipulating / influencing it.

From here i go around buying/selling -- essentially trading, get low cost on comms, trying to spread in large no. of orders, taking on risks people want to offload.

In the end, my cash balance is nett cash and i do not need alot of cash to generate money.

In your case of investing, its good for those with a few hundred mill to billions in AUM. but they will earn peanuts if they try to trade as their size is irrelevant to this market function.

 

[BBCWatcher]

Simply, i guess u dont understand trading at all....

I most certainly do.

Please note carefully what I wrote about the fact that a few people can make money trading (gambling), just as there are a few professional poker players who can earn a living. It's a tiny percentage, and tinier given enough time, but they do exist. If you happen to be one of the few, congratulations and continued good luck to you.

 

[alexchia01]

Do people become rich by trading stocks?

Yes, but only 5%.

95% of the people can't make it.

This is why many people thinks trading is gambling.

If you are a profitable trader, you know trading is not gambling.

The question is not "Do people become rich by trading stock?"

The real question should be... "Can you become the 5% who get rich by trading stocks?"

 

[wahkao3]

My paper loss was more than $70,000 from trading last year

i also kanna jjialat jialat from the china crash

 

[Perisher]

i also kanna jjialat jialat from the china crash

Share your story? I'm interested.

 

[wahkao3]

Share your story? I'm interested.

gpgt

 

[peterchan75]

i also kanna jjialat jialat from the china crash

That was before TA + FA ?

 

[wahkao3]

That was before TA + FA ?

FATA is not immumed to the crash

 

[peterchan75]

He has some points...