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MDawg
MDawg
Joined: Sep 27, 2018
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February 14th, 2021 at 8:35:24 AM permalink
BRK.B - no I have never traded it. It doesn't seem volatile enough for good trading. For example from Feb. 10 - 12th, moved entirely sideways it appears. I don't trade AAPL for the same reason, often doesn't move much. Lately AAPL has been more volatile, but nothing like AMZN, TSLA, GOOGL, CMG, etc.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
SOOPOO
SOOPOO
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February 14th, 2021 at 10:13:24 AM permalink
Quote: MDawg

BRK.B - no I have never traded it. It doesn't seem volatile enough for good trading. For example from Feb. 10 - 12th, moved entirely sideways it appears. I don't trade AAPL for the same reason, often doesn't move much. Lately AAPL has been more volatile, but nothing like AMZN, TSLA, GOOGL, CMG, etc.



So is this a fair summary...?

1. Pick a company that is sound, one you wonít mind holding if you have to.
2. Pick a company that is above average in volatility.

It makes intuitive sense.... but wonít Ďsoundí companies lean towards a lower volatility? I think, as an example, the crazy volatility of TSLA is because it is not a sound company(yet)? Meaning they have not proven they can consistently be even profitable? Amazon, for its size, is not that profitable either. While Apple has moved to massive profitability consistently, hence NOT as volatile?
MDawg
MDawg
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February 14th, 2021 at 11:45:23 AM permalink
In order to trade a stock, it must go up and down - that's volatility. I suppose it could also just go straight up, but if it's doing that, why trade it at all? just buy and hold.

For example after the market was done dropping between Spring 2000 - 9/11/2001, there followed a couple years there when the market wasn't really conducive to trading - mostly flat, as I recall.

And yes, the best stocks to trade are stocks that keep hitting new ATHs (all time highs). That way, if you do get stuck you may ride it out until it comes back. Once a stock hits a new ATH - ANYone who has EVER gone long on the stock has no excuse for losing.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 16th, 2021 at 11:12:28 AM permalink
I was a little too cheap on my AMZN bottom fishing so I didn't get any, but TSLA was fine, booked about thirteen hunny. As you may see, it's a process. You're constantly changing your planned entry points especially, and occasionally, your exit too. There was no need to average in more shares today, but I did have some orders ready to buy more to average in if necessary.

I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 16th, 2021 at 11:19:22 AM permalink
AMZN is due for a run back to at least 3350 soon enough.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
SOOPOO
SOOPOO
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February 16th, 2021 at 2:08:39 PM permalink
Good trades. But you needed nearly $600k of liquidity to make those buys. And as you said, if they went down you would be ready to buy more, so for simplicity say you needed $1million liquid. And if these went down, unless you had another $1 million liquid, you couldnít pick a 3rd or 4th stock to trade.

Letís say it is $2 million you are willing to trade. I was able to go back 10 years. Just keeping it in SPY instead of ever trading it I think got you around $1k a day. (I figured 250 trading days in a year). My point is if you have a lot of money, itís easy to make a lot of money!

Good work today, MDawg. I was down a little today holding...
OnceDear
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OnceDear
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February 16th, 2021 at 2:20:35 PM permalink
Quote: SOOPOO

Good trades. But you needed nearly $600k of liquidity to make those buys. And as you said, if they went down you would be ready to buy more, so for simplicity say you needed $1million liquid. And if these went down, unless you had another $1 million liquid, you couldnít pick a 3rd or 4th stock to trade.

Letís say it is $2 million you are willing to trade. I was able to go back 10 years. Just keeping it in SPY instead of ever trading it I think got you around $1k a day. (I figured 250 trading days in a year). My point is if you have a lot of money, itís easy to make a lot of money!

Good work today, MDawg. I was down a little today holding...

I keep saying it... Averaging down is martingale for investors.
It works till it doesn't.
Take care out there. Spare a thought for the newly poor who were happy in their world just a few days ago, but whose whole way of life just collapsed..
MDawg
MDawg
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February 16th, 2021 at 2:21:18 PM permalink
Thanks.


My long terms went down a lot more today than the apprx. 1300 I made trading.

However, the point is to keep chugging away, and making money on trades, and then eventually the long terms come back or go up, and then you have all that you made trading on top of whatever your long terms rise.

Some people can't relate to putting a million or more into a stock "just" to book a thousand, but then first of all, sometimes such trades book a lot more than a thousand, such as the other day when I booked 3000 on that single TSLA trade. Sometimes I'll hit a home run and book 10K in one day trade, or more. In any case, as your brother in law should attest, it all does add up to a fair amount by year's end.
Yes, to be "safe" you need a lot of buying power to do what I do with the top stocks that I trade.

But, again, don't ever sell your long terms. If you find you have a knack for it, trade additional shares on top of what you hold.

Another rule I follow is to stay out of margin. That way if I get stuck in a trade and need to hold it for a while, it's not like I am paying for the time cost of the trade. In other words, I maintain a good % of cash in my accounts in case I need it for averaging in a lot of shares on a trade.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
darkoz
darkoz
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February 16th, 2021 at 3:10:20 PM permalink
Quote: MDawg

Thanks.


My long terms went down a lot more today than the apprx. 1300 I made trading.

However, the point is to keep chugging away, and making money on trades, and then eventually the long terms come back or go up, and then you have all that you made trading on top of whatever your long terms rise.

Some people can't relate to putting a million or more into a stock "just" to book a thousand, but then first of all, sometimes such trades book a lot more than a thousand, such as the other day when I booked 3000 on that single TSLA trade. Sometimes I'll hit a home run and book 10K in one day trade, or more. In any case, as your brother in law should attest, it all does add up to a fair amount by year's end.
Yes, to be "safe" you need a lot of buying power to do what I do with the top stocks that I trade.

But, again, don't ever sell your long terms. If you find you have a knack for it, trade additional shares on top of what you hold.

Another rule I follow is to stay out of margin. That way if I get stuck in a trade and need to hold it for a while, it's not like I am paying for the time cost of the trade. In other words, I maintain a good % of cash in my accounts in case I need it for averaging in a lot of shares on a trade.



Investing a million to make $1000 sounds like betting $1 on 35 numbers at roulette to make a $1.

Nice winning system you have there
For Whom the bus tolls; The bus tolls for thee
MDawg
MDawg
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February 16th, 2021 at 3:18:00 PM permalink
Martingale in a casino. Averaging in with a stock trade. These are NOT the same.

First off, averaging in when buying a stock is what you're Supposed to do. If you're planning to buy 100 shares of a given stock, whether for investing or trading, you should never buy all 100 shares at once. You should buy 50 or even just 25, and then see what happens. If it goes straight up, sure, you might get shut out from that lower basis, but if it drops then you are able to average in more shares and lower your basis. Typically there is no way to get the absolute bottom or top, so averaging in is the safe way to do it.

But besides that, on a martingale for say, a coin toss, the probability of the event's coming in your favor remains the same for each coin toss. Lose eight coin tosses in a row, and the chance that you will win the ninth remains just 50-50.

On a stock, as the price drops, and you average in shares, the stock needs to return to a lower price point than your initial target, so no matter what stock it is, even disregarding its chart and history, the intrinsic probability of the event's coming to pass increases. The stock has less distance to travel to put you back in the green. If some of the mathematicians on here want to calculate, for example, the chance that AMZN will hit 3350 again versus that it will hit 3300, based on its history, I am sure that they will agree that the chance of its bouncing back 32 points from its close today is higher than its rising 82 points. And even disregarding any history and considering pure math, still the chance that something will return to a lower point is higher than that it will return to a higher.

So if I get stuck in an AMZN trade at 3350 and I hold my horses until it hits 3250 and buy another lot of shares, the chances that my now double the amount of shares will return to green at the new basis of 3300 is higher than that it will return at 3350, no matter how you slice it.

As a practical matter, I have NEVER had a trade not return to higher than where I initially bot into it - such that all the averaging in did is get me back into the green FASTER. That's a pretty solid track record that defies any sort of luck, and has as much to do with the stocks I pick constantly hitting new ATHs as my skill in choosing entry and re-entry (averaging in) points.

But even if I knew nothing at all, if I needed a given stock to get me into the green at a lower price versus a higher price, obviously the lower that price is the better my chances are at success.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.

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