fat.tail.event Posted March 2, 2009 Report Share Posted March 2, 2009 @ the trading guys... First, I would caution against trading individual equities at first, especially in this environment, right out of the gate. Unless you have some big affinity for a certain sector and you devote yourself to knowing inside out....you love pharma companies and you are going to follow only mega cap healthcare, for example. Take Robbie's advice and concentrate on a broad based index that has TONS of liquidity. Volume is your friend. Read Dr. Alexander Elder's book Trading For a Living. High Probability Trading by Marcel Link is a good book to put you in a proper frame of mind. Reminisences of a Stock Operator is probably the best narrative type book out there about market psychology and crowd psychology....if you read between the lines and ponder, its truly invaluable. If you want to know how big money managers think about the world and look at the market, read books like Market Wizards, Hedge Hunters or Inside the House of Money...they may even give you ideas about how to 'express' (implement) trades properly. When I am not reading the general stuff out there... research, the Economist, FT...I am blogging, chatting in FT's Alphaville Long Room, emailing hedge fund managers with thoughts/trades I have. As far as all the 101 stuff....long, short, futures, options. First, go buy yourself a finance dictionary...you will always need it. Go to the CMEs website...tons of free info, classes, market data. I get the CMEs end of day soft commodities report for free....just another example of free, regular info out there. My firms Reuters data service at home doesnt inlcude FX, so I keep the CMEs E-quivalents running on my monitors at home all night (yes, I get up a couple times a night to check end of asia and UK open). If you are married and you want to be successful at this hobby/career, you will have to make all of this your mistress. There are just too many smart people who live and breath this stuff who stand ready to take your uneducated money. I would say stay away from retail spot FX altogether. These are mainly chop shops because its an unregulated environment with no central exchange or clearing corp. The only way you will get decent service or execution is if you are making an institutional cut off, usually 50 to 100k deposit. Quote Link to comment Share on other sites More sharing options...
spider87 Posted March 2, 2009 Author Report Share Posted March 2, 2009 I have a few more questions for robbie and fte Why do people buy stock that is expensive? Like why spend 150k on 150 shares of $1000 when you can buy 1500 shares of something that is $100/share?? Wouldn't quantity be better? Also, I'm not wanting to dive in quite as much as you're saying I was just thinking take like 500$ and just buy like 50 shares of something that's like $10 and see if I can't increase it.. Is that not possible? Quote Link to comment Share on other sites More sharing options...
fat.tail.event Posted March 2, 2009 Report Share Posted March 2, 2009 I have a few more questions for robbie and fte Why do people buy stock that is expensive? Like why spend 150k on 150 shares of $1000 when you can buy 1500 shares of something that is $100/share?? Wouldn't quantity be better? Also, I'm not wanting to dive in quite as much as you're saying I was just thinking take like 500$ and just buy like 50 shares of something that's like $10 and see if I can't increase it.. Is that not possible? Theoretically, if liquidity is adequate...daily volume is high, float is high...price per share becomes just that, a number. Psychologically, we tend to want more of something, just a human bias. Some companies strive to keep share prices at a certain level to make them seem more 'accessible', but again I think its all perception. If you identify value at 100 and you have more shares outstanding, the same value would exist at 1000 if you reduced the number of shares proportionally. Some companies trading under 5 will reverse split to boost share price...perception of being some start-up penny stock - bad Then you have Berkshire...BRK A which is around 75,000 USD for 1 share...perception of exclusivity. Quote Link to comment Share on other sites More sharing options...
phaedo Posted March 2, 2009 Report Share Posted March 2, 2009 I have a few more questions for robbie and fte Why do people buy stock that is expensive? Like why spend 150k on 150 shares of $1000 when you can buy 1500 shares of something that is $100/share?? Wouldn't quantity be better? Also, I'm not wanting to dive in quite as much as you're saying I was just thinking take like 500$ and just buy like 50 shares of something that's like $10 and see if I can't increase it.. Is that not possible? One thing to bear in mind with those $10 stocks is institutional trading - unless the rules have changed institutions can't own stock if the price is below $10 I think it was. So a couple of things can happen with them - the price will keep rebounding when it gets close to $10 because of institutional ownership, or it will go straight through that $10 barrier and keep going fast as the institutions are all getting out of it. Quote Link to comment Share on other sites More sharing options...
spider87 Posted March 2, 2009 Author Report Share Posted March 2, 2009 O_O i need to read a beginner book or something lol I feel like someones trying to explain quantum physics to me except I can't catch pieces that I understand.... lol Quote Link to comment Share on other sites More sharing options...
omni Posted March 2, 2009 Report Share Posted March 2, 2009 My occupation........I do well. Quote Link to comment Share on other sites More sharing options...
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