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I Had to Develop an iPhone App to Understand Swing Trading

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Re: I Had to Develop an iPhone App to Understand Swing Trading

#41

Post by jonknee »

dirtyaura wrote: post #12

A tangential question: It seems that a lot of smart people believe in technical analysis, but to me it sounds like telling the future from tea leaves. Does it really work or are successes just part of the standard randomness of stock investing?

If you're doing technical analysis yourself it's a joke and indeed reading tea leaves. However, technical analysis is essentially what high-frequency trading automates and has made many people billions of dollars. You have no chance competing though, by the time you have identified your Fibonacci retracement or whatever other snake oil you're looking for, there have already been millions of actions taken by hundreds of HFT firms that have likely already eaten your lunch before you knew you were hungry.

Re: I Had to Develop an iPhone App to Understand Swing Trading

#43

Post by [deleted] »

Hermel wrote: post #14
jeffreyrogers wrote: post #7

Earlier quoted context omitted.

> People literally spend all their time doing this, if there was free money to be made someone would be making it:) I agree with everything you said above, including this. I want to add though, that there is effectively free money in the stock market. For example, just by buying a low-fee index fund (e.g. something from Vanguard), you're almost guaranteed to do better than most investors and probably better than near…

Note that you are somehow arguing in favor and against the efficient market hypothesis at the same time. By arguing for ETFs, you are implicitely assuming that there is not much to gain by doing your own research because markets are efficient and have already priced in everything. By arguing that most people underperform the market, you are implicitely assuming that it is easy to underperform the market - something t…

[deleted]

Re: I Had to Develop an iPhone App to Understand Swing Trading

#44

Post by metacorrector »

Hermel wrote: post #14
jeffreyrogers wrote: post #7

Earlier quoted context omitted.

> People literally spend all their time doing this, if there was free money to be made someone would be making it:) I agree with everything you said above, including this. I want to add though, that there is effectively free money in the stock market. For example, just by buying a low-fee index fund (e.g. something from Vanguard), you're almost guaranteed to do better than most investors and probably better than near…

Note that you are somehow arguing in favor and against the efficient market hypothesis at the same time. By arguing for ETFs, you are implicitely assuming that there is not much to gain by doing your own research because markets are efficient and have already priced in everything. By arguing that most people underperform the market, you are implicitely assuming that it is easy to underperform the market - something t…

no, what you describe is not an argument against EMH; not defending the poster, I have no idea if the poster understands this, but your critique is faulty and is explained by standard finance theory.

Re: I Had to Develop an iPhone App to Understand Swing Trading

#45

Post by jonknee »

lnanek2 wrote: post #11
falsestprophet wrote: post #10

Earlier quoted context omitted.

There are thousands of buy side firms all over the world stocked with stone cold geniuses who do this all day every day after having trained in maths and science all their lives. The fact that you saw some people you perceived to be clowns once , does not demonstrate the market is anyone's for the taking.

Those people are usually managing a lot of money, though. Warren Buffet has said he has to trade completely differently nowadays due to size. So those people are not working the same opportunities most people here are going for.

A lot of HFT shops (if not most), don't "manage" any money in the conventional sense. They close the books at night and don't hold any positions when there isn't active trading.

What Buffet does and what HFT do are completely different. The reason why Buffet has to change how he trades is because of HFT. If Buffet puts in an order for 100,000 shares of Coke (KO) while it's at $40 a share, he would not stand a chance. HFT bots would swarm in and scoop every last share of KO that's available and then sell it back for incrementally more. All within a fraction of fraction of a fraction of a second.

Re: I Had to Develop an iPhone App to Understand Swing Trading

#46

Post by jonknee »

gregonicus wrote: post #26

Sounds like this type of trading could generate near 1000 taxable events per year. How do you manage this data for your tax filing?

Computers... Your broker does the math and you get a form in the new year that details your various gains and losses (mainly capital gains and then dividend income, which may not apply if you're not holding positions).

Re: I Had to Develop an iPhone App to Understand Swing Trading

#47

Post by Mikeb85 »

ipsin wrote: post #37

So won't high frequency traders discover your limits (by posting and canceling orders rapidly) and drive you into them, costing you money? I thought this was the simplest kind of fish for them to catch.

I don't think you know what HFT is...

Re: I Had to Develop an iPhone App to Understand Swing Trading

#48

Post by Mikeb85 »

lnanek2 wrote: post #11
falsestprophet wrote: post #10

Earlier quoted context omitted.

There are thousands of buy side firms all over the world stocked with stone cold geniuses who do this all day every day after having trained in maths and science all their lives. The fact that you saw some people you perceived to be clowns once , does not demonstrate the market is anyone's for the taking.

Those people are usually managing a lot of money, though. Warren Buffet has said he has to trade completely differently nowadays due to size. So those people are not working the same opportunities most people here are going for.

So true. When you have a small account you can be much more agile and make some good returns simply by being able to trade without moving prices...

Re: I Had to Develop an iPhone App to Understand Swing Trading

#49

Post by hnnewguy »

MagicWishMonkey wrote: post #32
smrtinsert wrote: post #27

Earlier quoted context omitted.

12%! I would love to join this fantasy world of yours :)

Vanguard Vanguard Vanguard. Don't try to be clever. Just invest your money in a few different indexes and let it be. Last year my account grew ~30%, it's increased 16.1% so far this year (the market isn't as crazy as it was in 2013 but it's not bad, either). You need to be disciplined enough to let your money sit and resist the temptation to do dumb things when the market dips. It's not rocket science, the best way t…

>Last year my account grew ~30%, it's increased 16.1% so far this year

Everyone looks smart during a bull run-up. That same SPY allocation would have been crushed in 2008-2009. On average, you'll get average results.

The CAGR of SPY for the past 100 or so years is about 6.5%, inflation adjusted. Good, but not 30% good.

Re: I Had to Develop an iPhone App to Understand Swing Trading

#50

Post by kelvin0 »

The development of this app, and the technical know-how gained is really something positive. However, doesn't it worry anyone how the Stock Market seems to be reduced to a mobile game? It`s not even about adding value to the market, but just piggy backing on this humongous money machine for the sake of individual gain... Please correct me if my perspective is missing some 'optimism'.
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