So, who here trades stock? Are you more of a buy and hold kind of person, or are you a get in and get out kind of person? In other words, what's your preferred hold times? I do not particularly like to hold a stock for more than 30 days, but I'll hold usually anywhere between 7 and 91 days. I've held for shorter times, and holding a little longer (maybe up to 100 days) isn't out of the question.

Although my tolerance for risk is (in my own assessment) moderate to high, I would be much more risk averse (and have much longer hold times) when dealing with any money set aside for retirement. In fact, despite my lack of aversion to risk, I believe playing it safe and conservative makes for a better plan when dealing with money that ought not be subjected to a higher possibility of being traded away--with retirement, as an example. Even still, I wouldn't endorse a buy and hold strategy ... not in today's volatile financial climate, especially when something as simple as using a 10-month moving average can beat the market time and time again.

My new passion is the stock market. Geez, I say new, but truth is, this month officially marks my third time back in the game. Yes, back before the new millennia, I was with an online broker (as I am now), but I got out. I was back in and out yet again (with yet another broker) a few years ago. Well, here I am again-news plans, new broker, new ways to lose money, lol. No, I'm not a newbie anymore, but I never let little things like that stand in way of making mistakes-my new euphemism for grade A blunders.

Anyhow, I had no real point to make by starting this thread. I just thought it might be nice to start one about stocks in general to see if anyone here who happens to like philosophy may also happen to like trading stocks.

PS: if you didn't buy BBI, you lost out on a nice run.

Mutual funds (no load) mostly. A few individual stocks. Oil rigs, gold. Just as a hedge. The market has been fine, so far. But I still have not made up my losses during the recent disaster.

---------- Post added 04-20-2010 at 04:46 PM ----------

Ameritrade. What the hell are Japanese candlesticks? Or are you kidding?

I gotta tell ya, I don't know near as much about the stock market as I would like to, and based on what you have told me so far, I believe you know far more about it than I do, but I can muster what I believe to be some at-least-halfway sensible opinions. You speak of day trading, and obviously enough, if one is a day trader, then one is what I would call a short-term trader, but not all short-term traders are day traders, as a true day trader is commonly regarded as one that closes his or her positions before the market closes thus protecting themselves from any gap that may occur overnight. I, myself, am not a day trader. I'm not opposed to it, but it's a bit too technical and a bit too time-intensive for my tastes; that's not to say I wouldn't take it up in a heartbeat had I a system in place with a high promise of success. I have bought and sold stock in the same day several times, but I fall outside the scope of being a day trader.

It's funny you should mention being in two places at once. I too find that if I am not watching stocks, I am browsing a philosophy forum or two. Truth be known, today (and all day), I have tabbing back and forth between here and my brokerage account.

You talk about fundamental analysis and technical analysis. I'm proficient in neither, and I could certainly stand to learn a thing or two, and though I believe fundamental analysis is critical to long haul success (for people who have long time horizons), I find little use for it for short-term technical plays. I need to strengthen my ability to analyze the fundamentals of a company (like I was taught to do in school), but so far, I have not done so. Maybe I need more discipline.

You also speak of going long and short, and I gotta tell ya, I do believe (I really do) that people who trade need to learn to trade short, mainly because it will help them to be better traders on (and get this) long trades. See, knowing how to identify trend reversals can have a major impact (to say the least) on timing their trades. This doesn't mean that one ought to get a margin account and trade short, however. I am of the opinion that if a person cannot successfully trade long, they have no business attempting to utilize the leverage afforded to them with margin accounts. I don't think the risk is worth the potential reward for those that do not know exactly what they are doing. That being said, it's sad to say that I don't trade short. I need more skill and more confidence in my trading first.

Although I'm familiar with a few actual trading patterns (e.g. pull backs in swing trading), the strategy that I'm attempting to employ, strangely enough, doesn't require the identification of individual stock trading patterns.

I hear that! Can't say that I rightly blame you. Another thing that I don't particularly care for when it comes to trading short is the obligation factor. Silly, I know, but I don't like the actual creation of the obligation that I have to purchase shares. When going long, I don't have to sell. I can watch them drop and drop until they're gone if I so choose. I will say this though. You may actually stand a better chance going short than going long so long as the market as a whole is declining. For example (and I am forever a fan of the S&P), plot the 7sma and 30ema for SPX (or .INX etc). If the 7 falls below the 30, then you may find that you'll fare better as a whole going short than the other way around.

I've never done options. By the way, I got a question about SPY. I hear people talk about calls and puts when trading it, but can't we buy and sell SPY without ever having to deal with calls and puts? In other words, can it be both true that I can choose to never trade options yet still trade SPY?

I haven't done any OTC's. The vast amount of my trades (you'll be surprised to hear) is on the NYSE. That should be surprising because it may seem unlikely given that most people wouldn't necessarily lean heavy on the NYSE over the NASDAQ.

I try (or least have tried) to be a supporter of staying in for the long haul, but I just can't bring myself to do it anymore. A cursory glance of the S&P charted over the last 20 years should explain why. Past performance over the last 50-70 years just doesn't do much for my long-term perspective when the last 15 years have performed as they have.

Because of my short-term trading strategy, I have a strong focus on technicals and very little on fundamentals. More important than technical indicators is of course price action. I believe that an enormous amount of insight can be gained by being in-tune with the stock price and its movement.

When I chart my stocks, I use candlesticks almost exclusively. There's a lot information regarding sentiment to be uncovered by understanding candlesticks.

Because I don't day trade, and because I generally keep my hold time to over a week, I find that I need not be overly concerned with platforms or things like level 2 quotes. I'm currently with Zecco.

There are basic trends that develop that almost everybody sticks to. Essentially, you can really make an educated guess as to what the behavior of what the stock is going to do tomorrow, a month, etc. In this made-up stock chart, I have two uptrends, which are basically determined by higher highs and higher lows, support and resistance, which show the basic personality the stock has taken on (the level at which investors tend to get scared and run or buy back in), and an evening star, which is a technical pattern that almost always develops into a dive the next day.

This is just my own really simplistic take on the whole thing. This is a link to a very good tutorial;

Introduction to Candlesticks - ChartSchool - StockCharts.com

Also, stockcharts.com is an excellent place for historical stock data. They use different colors for the different bar graphs, but you get the idea. I use it 50 times a day if e-trade pro does not work out well for me on a particular stock.

But it so much deeper than this. Bollinger bands, Level 2 quotes (the stock market crystal ball), market makers, etc. It really is a fun (and profitable) pastime.

You are a Quant, and I am out of your league. It looks a lot better than darts, but how does it measure up to darts? Have you any figures? Interesting stuff, though. I thought that "Japanese candlesticks" was a joke. Shows how much I know.

You are a Quant, and I am out of your league. It looks a lot better than darts, but how does it measure up to darts? Have you any figures? Interesting stuff, though. I thought that "Japanese candlesticks" was a joke. Shows how much I know.

Also, given the odds and variables, you have a better chance succeeding in the stockmarket than getting a perfect game in darts.

I think a good way to play the stock market is to follow big winners such as Warren Buffet.

Technical analysis is important because so many people use it.

I hope so. But several newspapers, every so often, have people throw darts randomly (not aiming) at a board with stocks selected by experts. the claim is that darts, thrown randomly, often beat the predictions of experts for the same stocks.

I'm not sure I understand what you mean when you say, "watch out for restricted lists." I thought I did at first, but I think you may be talking about something I'm not familiar with.

As I understand it, some online stock brokers do not broker all stocks, so (and in analogy) just as all furniture companies do not sell all brands of furniture, it may be that I may stumble across a stock that I can't trade with my broker because my broker doesn't 'carry' it--just like I couldn't buy a brand of furniture from a particular furniture company that doesn't carry it.

So, when you tell me to "watch out for restricted lists," I think you're telling me to not trade a stock with a broker that doesn't carry it, but then again, how could I if it doesn't carry it? Because of that, I'm afraid I don't know what you mean.

Is that Mon-Fri, or is it a rolling week? For example, if I day trade Wednesday, Thursday, and Friday, that's my three for the week, but if I also day trade the following Monday, then even though it's a different week, it is a forth trade in the last 5 days the market was open.

I make a distinction between traders and investors, and I think the degree to which technical analysis is important increases for those with relatively shorter hold times, so for you as a day trader, I am in complete agreement that trying to day trade without a good understanding of technical analysis is foolhardy. I like your analogy of sailing blind in a very perilous sea.

I think of individual stock exchanges as a club, each with their own criteria for remaining a member (an actual traded company) of the club. Because each club has their own requirements for its members to remain listed, I believe (if we look hard enough) that we should see an overall pattern from the stocks in one club that isn't present for other clubs. It is my hope that I can detect and exploit such a pattern enabling me to make significant gains.

My biggest fear is that I have failed to properly take into account prior delistings. My biggest weakness right now is my inability to backtest stocks that no longer trade on the NYSE.

I mean that I like it as a benchmark. I can't substantiate these numbers, but unless I'm sadly mistaken, I believe about 90% of the people who trade/invest underperform the market. I believe 9% of the people match the market, and I believe 1% of the people outperform the market. Overtime, that is!

Yes, anybody can beat the market. Anybody can get lucky and beat the market. It's so so easy. But, fewer people can beat it two years in a row. How many can at least match it five years in a row? A lot, but many don't even though they can, and there's a reason for that-I'll get to it shortly. After 20 consecutive years of trading and investing, who can stand up and say that they have outperformed the market on average? Very few!

However, it's so so easy to match the market. All you have to do is buy into an index fund; something like VFINX. Or, if you want to trade it using an ETF, then you can buy and sell SPY--something I mentioned before.

So, why do so many people underperform when it's so easy to match? Greed is a simple answer. More accurately, it's because they are more ambitious and want to outperform the market. Though it's easy to do in any given year, it's treacherously difficult to successfully do so over the course of many years. There's just too many coulda's, woulda's, and shoulda's.

I think it may be a habit of mine, but I think it's a good habit. I always (well, almost always) first look at the longest time frame possible. Then, I zoom in one notch (or timeframe) at a time until I have viewed charts from the longest time frame to the shortest.

This has officially been written down in my notes.

If I were the typical short-term trader that bought based on the technicals of individual stocks, I most certainly would. I greatly appreciate your advice by the way, and before it's all over, I'm probably going to take it and use it. Thanks.

I think a good way to play the stock market is to follow big winners such as Warren Buffet.

Technical analysis is important because so many people use it.

There is abundant evidence that trying to time markets, and outperform the market as a whole over long periods of time is futile.
A random walk down wall street. Winning the Losers game, etc.
There are no safe investments and risk and reward are closely linked which is why diversification and rebalancing are essential.