I thought a thread about the stockmarket/stocks might be in order, to bring general questions together under one thread. I know I have some questions. I'm sure others do also. Thank you in advance to all those willing to take a minute or two out of their busy schedule to answer. Excuse my ignorance, but... Why would an individual, in pre-open place a bid for a stock 20% above the market price and let it be filled on open? I don't get it? Also, what's the go with bids that must total about $50 in total? What's the point? :/ Thanks.
Yes, I've done it before. Point is to ensure you get in on a stock at open. Fill price is only the weighted average of all fills at open, so you won't end up paying 20% above market, but instead you pay the open price.
Do you guys have much success trading short term? I've set aside a couple of grand to have a crack. I've been watching quite a few stocks on my various watchlists for ages and I reckon I'm starting to see some predictability I can profit from.
Pretty sure the bids your referring to here are bids places by algorithmic traders.. Ie traders put bids through a computer programs to split up the bids and not reveal to the market the true volume that they want to buy. These programs are fully automated and can be very sophisticated and can vary bids/volumes up and down in miliseconds
How much experience do you have with shares in general? Be very careful doing this.. If you are still asking the sort of questions you just asked, I dont think your ready to do short term trading. Short term trading for a novice = Gambling where the odds are very much against you. Just my opinion.
Small bids could be remnants of partially filled orders or traders putting through multiple little orders. I've heard there are brokers that offer a single brokerage for multiple buys on the same stock in the same direction Or if it is a bid/sell of 1 that is a broker putting in a place holder to do a cross trade Ie buyer and seller are clients of the same broker
Thanks Bull Bear. Yeah, I have long term trades in place that I'm looking to hold for longer than 12 months for capital gain requirements. Trouble with those is that I don't want to sell them on the dips for this reason (the 12 months is nearly up on a lot of them). Hence the setting aside of a little money to play.
+1 Worst that can happen is you actually get lucky and make a couple of profitable trades Then you might think you know what you are doing, take bigger risks and lose the lot If you want to seriously consider trading read Trade your way to financial freedom by Tharp
Why not trade around those same stocks you hold long term ? If there is a dip then buy some more of the same stock and sell if it goes up a bit while still keeping the original lot for 12 months You just don't get he reduced capital gains on the shorter trades
Yep, that's EXACTLY what I am doing. I know the stocks pretty well now and what moves them. I work too hard to throw it away at the ASX casino.
Also, this is sometimes one of the biggest warning signs that can (usually?) cause big loss. The market rarely works like this. I second Trew's idea about reading quite a lot, and watching the market as well. It can be very interesting watching the trades come in just after a big announcement by a company. Sometimes you think there is a pattern forming, and one trade can come in and changes everything. But yea.. MUCH better starting with stocks you know at least.
If your looking to trade shares a sound understanding of technical analysis is important and set strict stop losses as a general rule on my trading stocks I use about 10% for a stop loss helps protect capital without incurring too much loss also if something drops 10% the trend is likely that it will drop further. Secondly for tax purposes if you complete a reasonable amount of share transactions and buy and sell in a systematic way you would be considered a share trader meaning all assets are treated as inventory if held and on the revenue account when sold also at year end all assets are held by you and valued at the lower of cost or net realisable value so no capital gains applies. hope that was helpful and good luck in your trading.
I second this^^^ You need a plan and a risk management strategy, or you will lose money. A plan is absolutely the most important part of trading. Have a look at this thread: http://forums.silverstackers.com/message-314887.html#p314887
Trading simply on trends is foolish.......it's a bit like playing roulette and placing your money on black because the last 20 spins were red.....you are looking at the past to predict the future....not wise....If you wish to trade, you will need to look at the fundamentals of a company but by doing so you have to accept that it takes time for fundamentals to be realised as stock price gain....so you are not really trading as such......you are holding for maximum profit...... I can't remember where I read it but there was an article on the people most likely to try trading the stockmarket and what was most common.....intelligent, competent at mathematics etc.....I have seen 2 men I work with that both traded that fitted this description and for the most part they were unsuccessful....the most successful trader/investor I work with is the one that looked at the company and used his own instinct...not focused on the short term gain....he is now close to being a millionaire....
Yep, looking at the company itself instead of through the layers 'technical analysis'; is bypassing the latter and the latter then fails, hence why the TA club doesnt like it. The thing is though, this needs access to those 'fundamentals', and if not directly involved with the company, it costs $$$, for exactly aboves reason.
Yes..that is right Pirocco....but all too often people are not willing to pay for this information because they fail to appreciate its significance.
