Jump to content

Recommended Posts

This is a TSLA (Tesla) chart shown on the weekly level (each bar represents 1 week of trading). See how the last price is now as high as a previous major low, which is also close to other major lows? It was a price floor which has now turned into a price ceiling. Anyone who bought TSLA at those old lows (~245-252) and still holding thinking they were buying the low are currently at a loss. So if price rises, they will likely try to sell at breakeven to avoid a loss. This is 'resistance'- it should prevent price from rising too much. This is just the beginning of resistance however- but it would have stopped one from shorting too early. If TSLA is not a good company and should keep going down, etc then this can be a decent point to open a long term short trade. I don't usually trade this long term stuff but its just an idea. Again, I don't specialize in longer term trades, so who knows. Its actually a common and basic strategy, very little analysis. TSLA tends to be better to trade intraday.

 

The general market has been making new ATHs (all time highs) so unfortunately I am unable to use my double+ line hit strategy to trade just yet. Could have done buy and hold but doing that in the correction would have netted a big drawdown. Nobody really knows, and all strategies have their downsides. 

 

Screen Shot 2019-07-13 at 6.20.14 AM.png

Share this post


Link to post
Share on other sites

I discovered a new technique on Friday. Normally, when an unusually high volume to movement ratio occurs on a candle on a line, a reversal is expected. However, it is also possible for one thing to hit a line on normal volume but another index has high volume at the same time even if there is no line hit. I suppose the technical reason for this is that we cannot find all the reversal points in the market as it is impossible to do so, and therefore price behavior in isolation reflects a potential reversal. But a price level is still required to determine where price is to reverse; this method simply tells when price should reverse. For example, VXX is generally the inverse to /ES. So when it hit the line at 8:45 (the first time it hit the resistance line), /ES was on a LoD. But there was no high volume on VXX around that time. However, there was high volume on /ES and QQQ 5 minutes before that time, thus implying a reversal (as traders are taking the opposite position there- buying into sells at an unusually high amount). And on that note, if you look at 7:50, QQQ hit the line, but it was DIA that showed a high amount of volume. That was where price reversed. Also note the exit point- 8:10 was when /ES hit resistance from the low of the 7:50 bounce up. Price never got back that high on that day. Of course, it isn't enough information to have opened a short trade when price got there, but it was simply an exit point from the previous long trade. VXX actually kept going lower for a few mins after /ES hit its high- the inverse correlation is not 1:1. The risk:reward at that point was not worth staying in the trade in hopes of price breaking through. Just trade by what the market gives. Also see the 12:20 candle- that was when /ES hit the line and had high volume at the same time. I just love those kinds of trades. See how QQQ hit its line first but there was no high volume anywhere when it did so. Still could have been a small trade but it wasn't such a great one. This helps identify the 'real' reversal point instead of the potential ones.

Screen Shot 2019-07-20 at 7.05.21 AM.png

Share this post


Link to post
Share on other sites
SageRhapsody    394

i have no idea what the fuck you've been saying but it's kinda cool to see. 

 

kinda always wanted to get into finance and trading and shit, since my studies in business always vaguely linked to it, but never had the time/motivation. 

Share this post


Link to post
Share on other sites
»JC.    5323
6 hours ago, SageRhapsody said:

i have no idea what the fuck you've been saying but it's kinda cool to see. 

 

kinda always wanted to get into finance and trading and shit, since my studies in business always vaguely linked to it, but never had the time/motivation. 

 

Are you doing any investing at all (e.g. do you have a retirement account)?

I am not into active trading like this user--something like 8 or 9 out of 10 professional investors fail to outperform the passive market over a span of 10+ years--but it is probably a good idea to set up some a basic investment account if you happen to be in a position where you can afford to do so.

Share this post


Link to post
Share on other sites
SageRhapsody    394

I've only been working a real job for a few months now, and anything before that was the bare minimum to pay for university. I'm getting scholarships and earning enough now that I could probably start saving away though. I really should start I guess even though it'd probably be like 50$ a month or something lol

Share this post


Link to post
Share on other sites
SageRhapsody    394

is it just as easy as walking into a bank and asking for one? I feel like i always get ripped off making bank accoutns with fees and shit lol

Share this post


Link to post
Share on other sites
BuildTheWalia    299

I think the Wall Street Mafia discovered he cracked the code and he's been taken care of.

  • Upvote 1

Share this post


Link to post
Share on other sites
»JC.    5323
2 hours ago, SageRhapsody said:

is it just as easy as walking into a bank and asking for one? I feel like i always get ripped off making bank accoutns with fees and shit lol

 

I am going to mention United States specific accounts here, but there should be a similar structure in place elsewhere with different names/coats of paint.

 

Banks

I assume you have a checking account at a bank that your paycheck is deposited into and that you possibly have a debit card linked to. You just need the one. You don't need a "savings account" if you know what you are doing with your money.

 

You can't avoid ATM fees if you need to use one, but you can avoid overdraft fees by not going below zero.

There is also a monthly account fee, but those are typically waived if you (1) meet some minimum balance or (2) set up direct deposit so that your paychecks go straight into your account.

 

In your bank account, make an Emergency Fund which contains some amount of money that you would need to feel comfortable. This varies by person, but examples are $1000, anywhere from 1 to 6 months expenses, or the largest number reasonably needed to deal with a crisis (e.g. hospital visit, car breakdown).

 

Investing

Stocks and Bonds

A stock is ownership of a small piece of a company.

A bond is a loan where you are promised some amount of interest.

Indexes track the value of a group of stocks or bonds and match their performance, meaning you don't actually need to have the money to invest in expensive company shares.

 

Stocks are more volatile, but produce higher gains over the long term when broadly invested.

Speaking of broad investing, you could gamble on a specific company like Apple or Amazon, but indexes exist that let you track large groups or the entire market with just one fund. As an example, the S&P 500 has had a minimum 30 year average return of 7%-inflation-adjusted per year. It tracks 500 different companies, which mitigates the risk of one company doing poorly.

 

If you plan to keep the money in the account for a long period of time, track the stocks. Bonds are conservative, but are much safer for short-term investing. 

 

Note: When you withdraw the money from an investment account, you have to pay taxes on the amount you have earned. This is known as capital gains tax.

 

Retirement Account

You typically get access to a tax-advantaged account through your employer (America: 401k, Canada: RRSP).

This account lets you invest part of your income for retirement while not taxing you on the amount you invest. The catch is that you can't use the money until you are old/retired.

 

Example:

40k income and flat tax rate of 10% (note: tax is progressive but likely more than 10% summed)

No retirement account: 36k take home, 4k taxes

retirement account that you put $4000 in: $4k "old person money", $32.4k take home pay, $3.6k taxes.

Future you just gained $400

 

Companies may also match your contribution up to some amount, such as "half your contribution up to 5% of income."

retirement account with $4000 and sweet $1000 match: $5000 old person money, $32.4k take home pay, $3.6k taxes

Future you has now gained $1000 extra bonus cash for no additional effort.

 

The money doesn't just sit here, though. It is an investment account, so you will be using this money to purchase stocks and bonds. The funds available differ by employer.

 

Americans has a contribution limit of $19k per year here. Dunno about Canada.

 

 

Additional Tax-Advantaged Accounts (American-Only Information)

America has IRAs and Roth IRAs, and Canada has TFSAs. An IRA works like the accounts above.

Roth IRAs and TFSAs use your post-tax income, but allow you to withdraw your gains without paying capital gains tax.

These have lower contribution limits. Somewhere around $5k for Canada and $6k for the US, I believe.

Roth IRAs and TFSAs also let you withdraw your contributions with less penalty than the retirement accounts above, should you fall on rough times.

 

Non-Advantaged Account

Normal account. You use money you have in the bank to invest, and then you pay tax on your profits when you withdraw. No annual limits.

Only use when you max out tax-advantaged spaces.

 

Create your account on any given investment site for free (Good Examples: Vanguard, Fidelity; Bad Examples: Robin Hood)

Note that while the accounts are free, all funds have Expense Ratios, which is the fee you pay for the management of the fund. Look for an expense ratio of something under 0.1%.

 

Signing up and investing probably takes no more than 20 minutes. Your retirement account is created through your workplace with whatever company they use, but for other accounts, here is an example of what you'll see on Vanguard's site:

uyCzXQr.png

 

 

  • Upvote 1

Share this post


Link to post
Share on other sites
»JC.    5323

tl;dr "what do i do"

1. Save up some amount of money in your bank such that you will not be homeless or need to take out loans if anything goes wrong.

2. Talk to your employer about whether they offer retirement accounts. If they match contributions, definitely get that free dosh.

3. If extra money is still burning a hole in your pocket, go to investment website of choice (e.g. Vanguard) and make an account, starting with tax advantaged ones (IRA, TFSA). Link your bank information and perform a transaction on whatever stock index you want. Common examples are VTSAX (S&P 500 tracker) and VTSMX (Total Market tracker).

4. If you max that out and you're still just rolling in the dollar signs, go ahead and increase your contribution to your job-related retirement account.

5. OK, now if you're Scrooge McDuck and just have vaults of money after all of that, go ahead and expand your vanguard account to have a taxable account as well. Look up how this affects your tax filing if you aren't lazy like me and choose to do it yourself instead of hiring an accountant.

6. Live off white rice and lentils so that you can invest 90% of your income and retire at 30.

 

 

P.S. The S&P stands for the Standard and Poors. If only we had the Rich and Richers

 

Potential info on TFSA: https://www.investopedia.com/terms/t/tax-free-savings-account-tfsa.asp

  • Upvote 1

Share this post


Link to post
Share on other sites
»JC.    5323

After-Thoughts/Tangent: Expenses vs Savings

 

People often don't spend the time to think about how the amount they invest will actually serve them in retirement. 401ks just kind of have the money "disappear" until you are 60, and people don't do the math to see whether it can support their lifestyle. You can probably be fine doing the minimum and relying on social security or w/e to pay for your life, but that kind of leaves the idea of money up in the air, which is not a great place to be. Lifestyle expenses can change due to moving locations for jobs, having kids, and medical costs, so the planning you do won't be 100% accurate, but here are the basics:

 

Withdrawal Rate

A paper known as the Trinity Study found that withdrawing 4%+inflation of your portfolio each year is considered "safe", meaning that you will almost certainly not run out of money for at least 30 years. Somewhere around 3.5%+inflation is basically safe for all eternity, meaning if you spent only $1000 a year (lol), and you had $30k invested, you would be able to retire right now!

 

Hitting Your Withdrawal Rate

People have done the math for you on "how long will I have to invest to hit a safe retirement?"

An easy to use calculator is here: https://networthify.com/calculator/earlyretirement

 

The actual numbers in the income and expense field do not matter at all. It is the percentage between them that is important. You can click on the graph to see how many years until retirement for a given savings rate. At 14%, you get 44.3, which puts you at a fairly normal retirement age (44+21 = 65 years old).

 

The first key insight is this: if you can save 15% of your income between all of your investment accounts, including employer matches, you can safely retire at a normal age. 

The second one is: if you can save more than 15% of your income, you can safely retire before 65.

 

This is of course difficult for many Americans. If you're working a minimum wage job, most of your money is going towards rent and food. You don't even have an emergency fund, let alone retirement accounts.

 

Decreasing Expenses and Increasing Income

If retiring before the age of 65 is of interest of you, there are two ways to change your savings rate to be higher than 15%.

(1) Make more money, allowing you to invest more of your income.

(2) Spend less money, allowing you to invest more of your income.

 

It should be noted that #2 is the typically stronger option. You can use the calculator to verify, but it should be obvious that spending $1000 less a year means you are saving more than spending the same amount, but investing $1000 more per year due to a raise.

 

There is a lot to say on the subjects of decreasing expenses and increasing incomes, but those are certainly off track for the initial discussion, as they relate more to lifestyle and figuring out how to have a fulfilling life with less. Feel free to PM me to continue this discussion as well; it is a topic I think about frequently.

  • Upvote 1

Share this post


Link to post
Share on other sites
SageRhapsody    394

wow jc the moneygod who would have thought. i'll make sure to give this a real good reading over in the morning. thanks bunches! 

  • Upvote 2

Share this post


Link to post
Share on other sites
+rei+    34993

Sage, as a Canadian your first resource should be couch potato investing if you want the tldr easy way 

 

 

Share this post


Link to post
Share on other sites
»JC.    5323
36 minutes ago, rei said:

Sage, as a Canadian your first resource should be couch potato investing if you want the tldr easy way 

 

are you referring to the "couch potato account" (evenly split 2 fund portfolio rebalanced annually) or the blog at canadiancouchpotato.com

can't comment on the second, but i think a 50-50 split of stocks/bonds is pretty conservative for sage's age group

Share this post


Link to post
Share on other sites
+rei+    34993

the latter 

 

Share this post


Link to post
Share on other sites
+Urthor    10234
On 07/12/2019 at 3:37 AM, JC. said:

 

are you referring to the "couch potato account" (evenly split 2 fund portfolio rebalanced annually) or the blog at canadiancouchpotato.com

can't comment on the second, but i think a 50-50 split of stocks/bonds is pretty conservative for sage's age group

 

So get an index fund and ignore it for 10 years because no investment strategy involving bonds has outperformed over a 10-20 year period

 

Got it.

  • Upvote 1

Share this post


Link to post
Share on other sites
+rei+    34993

thats basically what canadiancouchpotato is (low brokerage fee index funds mostly) 

Share this post


Link to post
Share on other sites
Aaron    2057

I really want to get into daytrading from the UK. Any hints/tips on where to start? 

 

I currently only have experience in property investments.

Share this post


Link to post
Share on other sites

Ah, I hadn't checked back in for a while, sorry. Day trading is notoriously difficult. I recommend reading up on anything you can to understand different theories of market behavior, even if you won't ever use it. Something may click, and the greater the number of ideas you are exposed to, the better. A good start would be Market Profile as well as Supply and Demand.

 

As an update, I've modified my technique a bit. I'm doing a lot better; reduced risk a fair bit and found a way to take advantage of more opportunities. I'm trading in the foreign exchange markets, as well as more commodities such as silver and oil. By moving away from company specific risk, I am trading broader probabilities. As an analogy, think that meta generally wins over antimeta as more samples are played out, eg law of large numbers. Companies specifically can do well but their technical points seem much more variable. But by trading the direct thing itself rather than options, I don't lose to 'theta'- that is, the time value. I am also able to trade overnight sessions which is another big benefit. 

  • Upvote 1

Share this post


Link to post
Share on other sites

The British pound is currently trading at 1.3058. I am waiting for it to break through that point. If it does, I intend to take a short position on it in the next session it moves up to 1.3058. Unknown profit target, all depends, but unless it plummets, I tend to only take a few small candles of profit most of the time.

Share this post


Link to post
Share on other sites

Sorry, I meant it is almost trading that that level currently. Just setting an alert on my phone just underneath that price. This way I can monitor a large number of products that I can check up on immediately if the market follows the anticipated scenario.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


  • Recently Browsing   0 members

    No registered users viewing this page.

×