Stock Market Advice

[Animal]

I'm guessing we have lots of traders here. What advice would you offer other traders?

[La Dame Aux Roses]

averaging down isn't always the answer, be willing to cut your losses and make it up on another trade instead

and it's better to make a small profit and miss out on an opportunity than lose money...there are opportunities to make lots of money every day

not very fancy tips, just the ones I'm constantly regretting ignoring

[BalalaikaBoy]

this is okay advice if you're managing a longterm account where you don't do a lot of trades. it's definitely NOT good advice if you're trading regularly on shorter time frames. from that vantage point, you want to be looking at expected return (likelihood of win x potential gain) - (likelihood of loss x potential loss). you don't manage risk by avoiding opportunities in order to avoid losses. you manage risk by trading high expected return systems (which means they will average you a win if you take the same kind of trade 50+ times), limiting the SIZE of your position so you don't lose too much on any one trade and holding positions that are not highly correlated

[Full_fathom]

Seems a little cooked to me. It's fighting for upward movement lately, on the heals of absolute vertical since march/20. I'm cash, personally. Crypto is suspect too, was never there anyway. There's really little correlation with upward movement other than new money. IMO, it basically exists upon Fed actions/confidence (as if this is organic), upward melt, because.... and the absence of any reason not to just plow ahead; that time between black swans. Big picture, the way personal finances are anymore, except for real estate there aren't too many places to put saved money. Interest rates suck, most ppl only want one house, mortgage rates are insanely low historically, everyone is flush with cash. And the economy and population continues to expand. It makes me wonder if it really will go on 'forever'. And one could always buy some gold, that one seems more and more attractive lately.

[Full_fathom]

We're getting closer! And sure as shit tech is the anachronism of reality. We're going meet 365 on SP for sure, but it's going to fight its way there. 2022 is a write-off, look to early/mid 2023 for real investment with the ashes. That's my financial 'Nostradamus'.

[Full_fathom]

And you what's funny too? It takes a black swan...here it was Ukraine, and it was bound to happen, humanity all coiled up and ready to break something.

[Full_fathom]

365 called. Who thanks me? no one.

Now I'm calling 330. And you deserve this? fuck no! You deserve none of this info...

I have little faith that you'd even execute it.

[BalalaikaBoy]

I'm hella secretive with my actual trading strategies, but if you're just looking for a bit of extra money and/or a plan for retirement, some tips I would give are.

1) Perhaps the most obvious advice I can give is to....actually take a full course on how the stock market works. I would actually recommend getting some study materials for licensing examples like the SIE or Series 57 that people take to trade other people's portfolios. There's so much shit about the markets that everyone talks about, yet no one takes the time to actually explain and you end up having to look up like 20 things to get the one piece of information you're trying to understand. That from the beginning.
2) Mutual funds are a fucking scam. their fees are based on assets under management, and they make pretty much the same regardless of how they perform provided they at least approximate the yearly returns of the market.
3) Diversification is good, but it has to be non-correlated diversification.
4) Conventional retirement accounts are mostly good only for the lower-middle to middle-middle class. if you are poor, you need the money now to pay rent and save up for your next car repair. if you are upper middle class to rich, invest it yourself and don't bother with all the heavy fees that come from trying to withdraw that money some time in the next 30 years.
5) If you do decide to go the route of a 401K or RothIRA, make sure you know the rules of how to manage it/when you can take it out without fees.
6) the stock market is not as tightly correlated with the health of the economy as most people think. for example, it tends to perform considerably better during times of high inflation, in spite of the real value of everyone else's earnings going down the drain. most people put their money in bonds when this happens, but this is exactly the wrong time to do it.
7) If you are in a very high tax bracket, look into municipal bonds within your home state (the last bit is very important). revenue from in-state municipal bonds is 100% tax-free. Less of a big deal if you're in a low tax bracket, but if your marginal rate is 32%, 35% even 37%....yeah. you do the math
8) If you don't understand it, don't trade it.
9) This is not a thread about personal spending, so I won't go into too much detail, but I will say this: if your personal spending habits are self-destructive, all the financial savvy in the world will not help you.
10) Efficient market theory is not just false, it's basically a conspiracy to get you to hand over all your money to financial bureaucracies with zero incentive to produce results (see point 1 for one example)
11) Tax-deferred plans are overrated. If you decide to lock your money away in a retirement account, it's best to do one where you pay the tax first for two reasons:

1. Tax-deferred programs make the assumption that you will be earning less income (and thus paying less total tax) later in life. If you play your cards right, you should retire into a higher tax bracket.
2. all of the account growth from upfront tax programs is tax-free