| If your goal is to "make money" by personal selection of equities/futures/options/ETFs you will in the long run lose more money than having kept the money in a savings account. You will lose both the capital and interest. Since the fastest way in the market to make a million dollars has historically been to start with two million, in todays markets one would need to start with 10 million. Today 99% of profitable market trades are automated. You will neither have the hardware infrastructure, technical accumen, or market/insider knowledge to EVER compete. You may eventually acquire a sufficient technical understanding. Individually you will never gain the other two. If you want to "gamble" then I would suggest you figure out how much money you are willing to lose. If it is less than five digits, you will have neither enough for learning nor enough to survive setbacks. Initial minor choice: take this cash to Vegas rather than Wall St. Once you have your trading account setup and funded, leave it alone for the next month.
Watch market news. Read analysis. Join trading forums.
Once you are reasonably fluent in the lingo and action, go back to your trading account.
Second decision point: IF you are still interested in losing all that cash sitting in the account (think of what you could have used it for this past month, or how much it will accrue in your IRA/401k/saving account), then start tracking sectors which appeal to you. Develop analysis to track stocks/sectors/etc in such a way that you feel you have insights to offer into the above discussion venues. Now, the hard part. If you have spent sufficient time to gain understanding, and still have an interest in spending even greater time, then you are ready to start gambling for real. You will have developed specific sectors/equities which you are interested in trading and so will have a reasonable idea about what to bet on. Do so with 1/4 or 1/3 of your cash.
Decide entry, exit and bail out prices.
Ignore these at the certainty of loss.
Make a buy order, keeping your perviously intuited prices in mind.
Wait for either a profit sale or a stop-loss sale.
After sale, assess every step of you process. What was accurate? Wrong? Unclear? Resolve all these questions. Repeat this process until you have no more trading cash available in your account. Final decision:
Either: scrimp, scrounge, beg, borrow and steal another stake; deposit into account and enter a lifelong addictive passion of passing your own money into the coffers of "others."
OR: acknowledge you have neither the time, interest, expertise, insider knowledge, infrastructure access or capital to continue this gambling and walk away. Option 1 will cost you money, health and familial ties.
Option 2 will earn you great wealth and free time. Good luck. Have fun storming the markets and don't say you weren't warned. |
Do you mean that 99% of all profits end up with HFT firms?