Is it really possible to make money in this trading lark?

This is a discussion on Is it really possible to make money in this trading lark? within the First Steps forums, part of the Reception category; Is it really possible to make money in this trading lark? Maybe it would be useful if the name-calling came ...

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Old Oct 20, 2004, 11:49am   #85
 
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Is it really possible to make money in this trading lark?

Maybe it would be useful if the name-calling came to a halt and this thread got back to it's initial purpose.

Perhaps this would help to move things forward. In my experience, name-calling only serves to make those who do so feel better about themselves.

Examples of successful traders could be used to highlight the possibilities/opportunities that are out there. Of course these are open to interpretation, as has been shown. There is nothing wrong with a healthy dose of cynicism, but to know there are guys out there who are doing very well from their trading starting with what may be considered a small investment may show a beginner that it can be done.

All the best with your trading.
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Old Oct 20, 2004, 11:54am   #86
Joined Apr 2004
Thanks Sarah M

Intelligent Imputs Are Always Apppreciated
marketgeeni is offline   Reply With Quote
Old Oct 20, 2004, 11:59am   #87
Joined Oct 2004
Maybe, just maybe. The original post by Kazza raised a number of issues of varying importance ie.

Risk/reward
Capital requirements
Types of trades
Stops & limits

It is the way one views and applies these and other factors (not listed), that determines the amount of money one makes. It is important to bear in mind that our comfort levels (in respect of risk tolerance) are different so whilst one trader may be happy to risk 10% of his/her capital, another might feel that it is not prudent. Secondly, many traders do not believe in compounding based on the sound principle that if a few trades go wrong one is back to square one and in some cases nursing losses.
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Old Oct 20, 2004, 12:08pm   #88
Joined Dec 2003
Hahaha

Yes, let's get back to what this thread was really about which is 'Is it possible to make money etc'

Not, 'it is possible to turn £1 into £1million (or make 1000's%) in a few months and anyone who dares to question this ridiculous statement is a loser who has no faith and imagination - Trading afterall is not hard all you've got to do is buy things that go up'.
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Old Oct 20, 2004, 12:25pm   #89
Joined Dec 2003
do I hear a new career calling me ?...how to stop a thread with one sentence.... LOL

Is it possible to make money etc..? Yes

can I make money etc? ........possibly

will I make money etc ..? .....maybe

can I be guaranteed to make money ..? .....no
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Old Oct 20, 2004, 12:29pm   #90
Joined Jul 2004
The claims made previously are not as outrageous as they first appear. Having read the thread I would like to offer an explanation as to how it can be achieved.

A distinction needs to be made between a) someone starting with no positions open and b) someone already in a leveraged positionÖwhich is going wrong.

The trader in the latter example could be in the following position:

The trader decides XYZ shares, currently trading at £1 are going to fly when their results are released in 2 weeks.

He purchases £500,000 worth of shares in XYZ, margined at 10%. This requires a deposit of £50,000. This margin can be secured using CFDís or spread betting in the UK. (I havenít actually spread bet so the example relates to CFDís)

On results day XYZ announces two major news items, firstly, a six month delay in production due to supply problems and secondly, the securing of a major new contract worth £XXXX.

At the opening XYZ drops 9.9% as the public panics and sells in response to the warning of a delay. At this point the trader receives a margin call as his account now shows a credit of only £500.

At the same time the smart money is sitting and watching, waiting for this panic selling to abate, realising that the second announcement has far greater significance to XYZ in the long run.

Once the selling has exhausted the smart money enters, resulting in a percentage gain at the close of 20%. Our trader now has his initial deposit of £50,000 + £100,000, from the 20% gain. Total £150,000.

Over the next 3 weeks others digest the significance of the good news released with the results and push the share price up by another 100%. Our traderís position is now worth £1.2m.

At this point our trader decides to close the position realising a profit of £1.15m before interest and commissions.

This entire process has taken 5 weeks to unfold. During this time the traderís low point was reached on results day where his account, shortly after the open, showed a credit of only £500, 3 weeks later it showed £1.15m an increase of some 230,000%.

My inference from Lion63 posts is that his friend has been trading since the 1980ís so I donít believe he turned £500 into £2m from a standing start but instead accomplished this feat by some variation of the above.

Longshot666 seems to be approaching this from the position of; £500 cash in an account, with no positions on to £2m+ in 6 months, which I agree appears incredible.

In conclusion, maybe itís a question of semantics.

PS: SarahMís contribution would be even more plausible if it was a variation of the above and because of the leverage involved in options.


Rgds.
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Old Oct 20, 2004, 12:41pm   #91
Joined Oct 2004
Vorpal,

That was a great post and very enlightening, the explanation was concise. However, my friend's case was slightly diferent as he actually had his switch card debited by the sum of £500 when his trading account had more or less a nil balance and he did not have any running trades.

However, what one should take from your example is more important than what my friend did or did not do; you have shown how by maximising the potential upside from a trade one can reap significant profits.
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