Career advice for a 15yr old

[4xpipcounter]

I don't view my contrarian style no more than, "This is where the trend is, and this is where it will reverse, or a correction is about to take place." The only thing I see is through the eyes of my charts and the totalistic compliance of my indicators, which makes up my entire methodology. I always emphasize this style is right for me, because it makes me lots of pips. That style may not be right for anyone else. This is why the different methods of trading vary so much.
The fact that any methodology takes time to prove to any aspiring trader is why I susggested that to you. To the best of my knowledge, anywhere in the world the trading limit is 18 years old, which means you have a significant period of time to prove to yourself what you can do. Your momentum trading is just another way of trading that can be very successful. Also, if you have had a few trial accounts and have done well on them, then you already have a basic idea of what to expect.
As far as stocks are concerned, I avoid them. I would prefer not to engage myself in any potentiality of a company filing bankruptcy. Money will never go bankrupt, which is why I love to trade spot currency.
Also, don't forget, and again I know you are excellent in mathematics, but the difference between $4,000 and $500 at 100% is only 3 time increments. I only mentioned that because in trading forex, you are not dealing with 5,10,20, or 40% annual return. Depening on your margining practices and the totality of your methodology, you are looking at that and more per month.

4pix, do you use any value methods in your contrarian trading style? Contrarian is similar to value trading isnt it?

I have had a few trial trading accounts, but I was only engaging in basic momentum trading(the return wasn't bad for a few months work I must say) as real value trading requires that year or two to see any proper returns. Some people in previous threads think Buffet's purchase of 9 billion GS was on insider information, but I think it looked like a good company when I looked through it's financials. Do you guys think he worked on insider info? GS has doubled and a bit since he bought them in 08, which is really impressive.

I know you guys aren't particularly keen on BP, but that's what makes it suitable for a buy opportunity right? It's that fear of the small chance of "what if..?" that has driven it into the ground. Is it really any riskier than what a trader would do in a year anyway? Just a small amount of money would be a good idea I think. My dad is eager for me to start investing his money, which in USD is 4000-5000. I don't want to keep him waiting for several years lol...
Maybe I just have to take that risk and take a diversified portfolio of Aussie/NZ undervalued companies, with maybe a bit of gold and BP if I can afford them.

To everyone here who thinks BP is a bad idea,(apart from fear of uncertainty) is there any financial reason behind why you think they are a bad idea? I know there's always that slight chance of a company going belly up, but I feel this is such a good opportunity for what normally is such an excellent company.

I should also look into GS; their P/E has gone down to 5.6 without the share price changing, which must indicate their profits are increasing significantly, but it's early days and these are just things I think I should look into.

24% monthly? What are you getting for annual returns? I know there is money to be made on bubbles. The chinese stock market has had a 400% increase from 05-08, which could hint to a bubble, which has been seen in the housing market, Would the best system not be technical/momentum trading in the boom years before picking up the stable companies when they're going cheap? Mcdonalds, coke etc were all going really cheap when the housing bubble burst, and the people that cashed in on them then have made some serious bank.

 

[scose-no-doubt]

Peace offering

http://lmgtfy.com/?q=ransquawk

 

[Dunecat]

Well bro, here in NZ you can trade under 15 if you have an authorized person. From what i read, they do very little. They do not even have to make your trades for you if you trade on the intertubes

From what I asked the customer services, she said that they do very little except receive a letter of what you have purchased every month. They cannot change account details, withdraw money, etc. Which in effect means that your authorized person can sitting in a freshly climbed tree smoking a cone while you are trading. She also made the point that she started trading at 16.

So you are saying with that comment that forex trading is incredibly lucrative without that apparent risk of stocks? I never looked into forex...

And with a 24% return monthly, are you implying that you have the potential receive up to 280% returns PA on your capital?

 

[4xpipcounter]

I got the following message on my e-mail, but it has not shown up in the thread, "
Would it not be more prudent to simply buy the call options risking a much smaller amount."

This depends on how you look at it. If you run your trades with a stop in place, that is all you are risking. I've done this for awhile, so I do something that would be considered very risky, and that is run my trades with no stops, because I don't like getting spiked out of my trades. I have a high risk tolerance, so it does not bother me if I did not find the ultimate entry point. Eventually, things will turn around and I will cash in my pips. An excellent example is last night's post on my thread.
Running trades like I do is not recommended for most traders, so keep your stops in place.
Also, you did mention your past success on practice accounts, so you can reflect on that. If you felt your method of trading would be too risky with real money, then it needs to be improvised.

 

[Chartsy]

Dunecat,
Would like to borrow this saying of yours for what follows


I am a currency trader so really don't know much about stocks



Would it not be more prudent to simply buy the call options risking a much smaller amount.

ha i'm reading Natenburg at the moment options are actually a lot more complex than one thinks

 

[Dunecat]

Bro, if there is profit involved I am full keen.

 

[Chartsy]

hmmm you have what like 30-40k? with that you can easily buy a few cheap OTM options on high quality stocks, if i had enough money i'd trade options on stocks for sure, make sure you read up on them first though!

In fact you don't even have to be a directional trader either, there's option pricing which is a concept,arbitrage , spreads and tonnes of other things, just so many ways to trade. You seem to be a slow paced, fundamentally inclined trader, perhaps growth stocks would be for you....skype me!

 

[4xpipcounter]

I'll stand corrected on the age qualification.
I would open a demo account with a forex broker and see for yourself.
24% monthly is compounded to 1,321% annually. I'll bet most traders don't make that annual return, because they are always pulling their money.
If you perfect your methodology and properly use your margin on a demo, you'll be surprised how fast you can run it up.
I first started trading in July 2004. One of the worse mistakes I made was in making 50% on my starting demo capital in my 1st week. I thought it was supposed to be that easy. What was a good thing was I bankrupted that demo account, so I knew I had work to do.

Well bro, here in NZ you can trade under 15 if you have an authorized person. From what i read, they do very little. They do not even have to make your trades for you if you trade on the intertubes

From what I asked the customer services, she said that they do very little except receive a letter of what you have purchased every month. They cannot change account details, withdraw money, etc. Which in effect means that your authorized person can sitting in a freshly climbed tree smoking a cone while you are trading. She also made the point that she started trading at 16.

So you are saying with that comment that forex trading is incredibly lucrative without that apparent risk of stocks? I never looked into forex...

And with a 24% return monthly, are you implying that you have the potential receive up to 280% returns PA on your capital?

 

[Dunecat]

hmmm you have what like 30-40k? with that you can easily buy a few cheap OTM options on high quality stocks, if i had enough money i'd trade options on stocks for sure, make sure you read up on them first though!

I am sure I will have that if I can prove I can provide decent returns. Until then, it is probably limited to $6000, or 4800USD, plus my input, which should bring it up to 5500USD.

 

[meanreversion]

BP is looking better and better value by the minute! Bet you can't wait to get your hands on some of that lovely stock.

 

[Dunecat]

BP is looking better and better value by the minute! Bet you can't wait to get your hands on some of that lovely stock.

Yeah, from what I can see it seems like a good risk to take. But you guys have awakened the skeptical side, which keeps saying what if, but even if there is a takeover, I don't think you'd lose a huge amount, they're heavily undervalued as it is.

 

[barjon]

1. Hey, Dad, I've been looking into value investing and here's a good opportunity. Big, strong oil company, great dividend and a real bargain at the price after the drop.

2. See, Dad, it works. You shoulda bought more and better strike again while the iron's hot.

3. Wow, come on Dad pile in. They are real cheap again 'cos the market's really overdone its reaction to that oil leak which will only be a temporary glitch. They represent terrific value at the price.

4. The market's really gone mad, Dad. This stock is the most fantastic value at the price. Yeah, I know you're losing a ****load of money at the moment but this really is a golden opportunity.

5. Come on, Dad, come on. The value now is out of this world. Whatd'ya mean you're wiped out? Is that why my allowance is stopped and the house is up for sale? Well, you just gotta get some money from somewhere, the stock is such good value now.

 

[JRP2891]

BP is looking better and better value by the minute! Bet you can't wait to get your hands on some of that lovely stock.

Yeah, from what I can see it seems like a good risk to take. But you guys have awakened the skeptical side, which keeps saying what if, but even if there is a takeover, I don't think you'd lose a huge amount, they're heavily undervalued as it is.

Im not sure MR was agreeing with you there Dunecat. MR correct me if i'm wrong, but i think what he is stating here is the danger of trading against the trend and very bearish price action. Remember the old adage, "it's never too high to buy, and never too low to sell".

Trend followers love value buyers, they take the other side of these runaway trades because of percieved "value" being reached, and it's these buyers' blood which carries the market to it's lower levels.

 

[Dunecat]

No actually, I'll just drop this BP craze for a while and settle down. You guys really don't realize how hard it is for me to forget all the strong opinions that I read about in other books. I have, in effect, been brain washed lol. Crashproof ; indicating imminent economic doom... value investing books shafting momentum and technical trading...

This will take a bit of time to go back to square one but this is best learnt now instead of later.

 

[Dunecat]

Get all the quals you can at school - its the last free education you will ever see.

Get the best degree you can - it will rule you over-qualified for some jobs but will re-pay itself over and over.

Do something demanding apart from studying - volunteer for the most harrowing work you can find that helps others at their critical times or achieve something that demonstrates incredible determination and self-belief.

Never apply for a job you don't want to do.

Always apply for a job you want.

If offered two equally good jobs, always take the one that pays better.

Save 10% of all your income to pay for your mid-life crisis.

Well personally I'd take the job that would teach me the most, but hey. Work to learn (to a point)?

 

[barjon]

Dunecat,

"..........But it is the fear from you guys that will make this so lucrative............"

No, not fear - experience, prudence and timing.

jon

 

[Dunecat]

Dunecat,

"..........But it is the fear from you guys that will make this so lucrative............"

No, not fear - experience, prudence and timing.

jon

No bro I never said that. :cheesy:

Ok I was looking for this big thread with all the best trading books and beginners books. This also raises another issue; avoiding taking advice from traders who aren't particularly successful. Oh god, opinions can be so contagious to a naive mind. (words to the effect; none of those momentum traders really know what they are talking about. I am right, and you are right for following me)

And if the repliee wants to add a popular book that a decent amount of reputable people advocate, I will look at that too.

 

[barjon]

ah, your innermost thoughts though!!

 

[barjon]

.................Oh god, opinions can be so contagious to a naive mind..................

Dunecat

I've been in this game for nigh on 40 years - not made a fortune, but the ledger's hasn't got much red ink in it.

I wouldn't presume to give you any advice other than this: Don't rely on any opinion other than your own. Question, with an open mind, everything you hear or read, however eminent the source, and arrive at your own conclusions.

Then remember that even if your conclusions are sound and correct it doesn't necessarily mean you can profit from them. As was quoted here (or somewhere on T2W) recently, the Keynes maxim that "markets can stay irrational longer than you can remain solvent" has great force.

Shorter term traders don't really give a tuppenny cuss about all this. They just act on what's happening to the price.

jon

 

[Dunecat]

Dunecat

I've been in this game for nigh on 40 years - not made a fortune, but the ledger's hasn't got much red ink in it.

I wouldn't presume to give you any advice other than this: Don't rely on any opinion other than your own. Question, with an open mind, everything you hear or read, however eminent the source, and arrive at your own conclusions.

Then remember that even if your conclusions are sound and correct it doesn't necessarily mean you can profit from them. As was quoted here (or somewhere on T2W) recently, the Keynes maxim that "markets can stay irrational longer than you can remain solvent" has great force.

Shorter term traders don't really give a tuppenny cuss about all this. They just act on what's happening to the price.

jon

I've managed to find "the disciplined trader", "market wizards" and "the new market wizards". Are you familiar with them?