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I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

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Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#21

Post by busboybus »

ydnaclementine wrote: post #20
nanoseltzer wrote: post #17

Earlier quoted context omitted.

What’s swing trading ? Is that like day trading where you try to buy low and sell high on small fluctuations ?

Trend, swing, momentum trading, all generally mean the same thing. In theory, the idea is that you buy something underpriced/overpriced when your technical momentum indicators tell you that momentum is increasing/decreasing. Can be used in all time scales (daily, weekly, monthly) I was really interested in finance, technical analysis (Alex Elder books), etc for a bit, but don't really have the capital to do anything,…

> Best real strategy is passive ETF vanguard type investments

There's a cyclical process. Passive has worked great relatively recently. It worked horribly in other market periods farther back. I doubt it will work well going forward from here. Passive only beats the market when it's unpopular. When you have enough people parroting that it's an obvious winner it stops working.

Real returns across the US equity market adjusted for taxes and fees have historically been about 2.5%. If "passive" is your thing you should just buy highly rated bonds and CDs.

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#22

Post by andrewbinstock »

InclinedPlane wrote: post #4
arkadiyt wrote: post #3

> A few years into swing trading, and I can say I learned a lot. I’ve made more than I’ve lost. I’m up about 16% ROI year to date. The article was published December 15th 2017, so he made 16% since January 1st. If he had bought the S&P500 on January 1st 2017 (2276.98) and sold on December 15th (2675.81) he'd be up > 17.5% (and who knows how much he paid in commissions).

Not to mention how much it cost in time to do all that work. Index funds don't incur any opportunity cost overhead in terms of your own time, they are fire and forget.

This! I am convinced that with a lot of careful work, you can beat the market a little. But to do so, you've got to work at it more than full time. To get paid for your time, you've got to be working with a ton of money so that a 1-2% beat gives you a good salary.

Otherwise, just invest in the major indices, diversify your portfolio so that it's appropriate for your current and future needs, and do something else with your life.

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#23

Post by masonic »

TomVDB wrote: post #11
prewett wrote: post #7

Earlier quoted context omitted.

He also may have lost quite a bit on taxes.

If you qualify as a day trader according to the IRS rules, then different tax trader rules apply. https://www.tradersaccounting.com/2017/11/28/trader-tax-stat...

  Traders can deduct interest expenses on Schedule C
Only business-specific interest.

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#24

Post by hemantv »

If you are engineer there are better use of your time than trading.

I say from experience lost a good chunk, learned a good chunk but most importantly lost my mind in the process. Thankfully woke up after few months and realized what harm I was doing.

I certainly learned a lot about business, capital markets and common life patterns.

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#25

Post by brador »

hemantv wrote: post #24

If you are engineer there are better use of your time than trading. I say from experience lost a good chunk, learned a good chunk but most importantly lost my mind in the process. Thankfully woke up after few months and realized what harm I was doing. I certainly learned a lot about business, capital markets and common life patterns.

What does common life patterns mean?

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#26

Post by Lazare »

nanoseltzer wrote: post #17
Lazare wrote: post #13

"A lot of people have flipped a coin 10 times and had it come up heads only 4-6 times, but I had it come up heads a full 7 times, so clearly I have an extremely proficient coin flipping technique. Sit down and listen to me discuss the wrist exercises I did!" A lot of people have tried to do what the author did and lost all their money. He recounts how he lost tons of money on different occasions. He says it's been ba…

What’s swing trading ? Is that like day trading where you try to buy low and sell high on small fluctuations ?

Yes. The idea is it's day trading, except you hold for a couple days, not a couple of hours, and you focus 100% on trying to figure out patterns in the stock and ignore all fundamentals. So you completely ignore like, whether the stock is cheap, or whether the company is doing well, and instead try and look for patterns in the stock price.

One he mentioned in particular was cup-and-handle; you can see a description here: https://www.investopedia.com/terms/c/cupandhandle.asp

The idea is, if you see a stock that slowly declines for a bit, it's possible that at some point it might start to slowly increase for a bit. And further, if it does, it might STOP increasing at the price level it originally started decreasing at. and then decrease for a bit instead.

Could this happen? Sure.

And if it did happen, and I bought at the bottom of the cup, and then sold at the top of the handle, I'd make money right? Yep.

But tons of patterns start by "slowly declining for a bit", how do I know this is a "cup-and-handle" pattern, meaning I should buy, and not one of the ones where it just, you know, keeps declining? You don't.

And if the company announced some really bad results, or loses or lawsuit, or something, halfway through the second half of the cup, right after I'd bought, I'd lose a fuck-ton of money? You sure would!

And I have no idea which one is which until it's too late? Yep.

So if I go around trying to recognise these patterns, will I make money? Oh hell no. It's like coming out ahead playing video poker at a casino; you might win once, but the odds are heavily stacked against you if you keep playing.

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#27

Post by hemantv »

brador wrote: post #25
hemantv wrote: post #24

If you are engineer there are better use of your time than trading. I say from experience lost a good chunk, learned a good chunk but most importantly lost my mind in the process. Thankfully woke up after few months and realized what harm I was doing. I certainly learned a lot about business, capital markets and common life patterns.

What does common life patterns mean?

Momentum is the number #1

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#28

Post by blueboo »

nanoseltzer wrote: post #17
Lazare wrote: post #13

"A lot of people have flipped a coin 10 times and had it come up heads only 4-6 times, but I had it come up heads a full 7 times, so clearly I have an extremely proficient coin flipping technique. Sit down and listen to me discuss the wrist exercises I did!" A lot of people have tried to do what the author did and lost all their money. He recounts how he lost tons of money on different occasions. He says it's been ba…

What’s swing trading ? Is that like day trading where you try to buy low and sell high on small fluctuations ?

It's like day trading, in that _it's total nonsense._ Reading tea leaves of patterns in charts of 'cup and handle', 'double top', 'flags and pennants' is what your gut tells you. It's astrology, dowsing, EVP -- our brains' amazing ability finding patterns in noise.

Once in a while, someone lucks out, or at least enough to turn it into a proselytizing grift. Y'know, like writing and selling a few thousand copies of an Amazon book or making a youtube series (totally something a successful investor would do!) Looks like this guy bought into it -- pity him!

> Being frugal, I still wanted to dabble with money-making opportunities at my disposal.

> Swing trading was one option, so I tried it.

> As a business teacher, I already knew a lot about trading and personal finance.

I can't believe these three sentences occurred in sequence. This man is a caricature of a Dunning-Kruger profile. Even a "frugal" "business teacher" succumbs to the lure of magical get-rich-quick thinking! I doubt he would have much pity if his own students indulged in such willful stupidity...

So heed exactly zero of his foolish advice -- it's a litany of what not to do in investing. Save for the warning not to pursue this folly.

Also note: the hottest version of this scam is in bitcoin: https://uk.tradingview.com/chart/BTCUSD/JwruXpQx-Head-and-sh...

Re: I Took a Couple Years Off of Work to Swing Trade. Here’s What Happened

#29

Post by bryanbuckley »

Lazare wrote: post #13

"A lot of people have flipped a coin 10 times and had it come up heads only 4-6 times, but I had it come up heads a full 7 times, so clearly I have an extremely proficient coin flipping technique. Sit down and listen to me discuss the wrist exercises I did!" A lot of people have tried to do what the author did and lost all their money. He recounts how he lost tons of money on different occasions. He says it's been ba…

I'm not sure about the metaphor. With a little practice, one can certainly flip one's desired result with high probability. It's a pretty simple physical system (which is why coin flips in more fair circumstances usually mean letting the coin hit the floor, adding some complexity).
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