Wednesday, April 1, 2015

The Truth About Day Trading

Day trading stocks is not easy it requires a lot of discipline.  By this I mean that you need to develop rules and stick to them, easier said than done.  You can make mental/paper trades and in all of those come out a winner and exit/enter at the right times.  When you trade with real money that is another story emotions take over and you begin to behave differently.  The same discipline that I used to transform my body (eating healthy haven't had a cookie in over 7yrs, jogging, weight training) is the same discipline required to be a good day trader.  Consider this if I meet 10 stock traders 8 will have told me that they lost LARGE sums of money of the 2 remaining one will have broke even and the other either took small losses or small gains.  The norm is that most have lost money they couldn't afford to lose.  That is why you should only trade with money you can spare but almost nobody does that and that brings me back to my first point it takes discipline to do what you are supposed to not what feels good.

The worst thing a day trader can do is start off with a few gains and think that he is gifted and start taking on large trades only to encounter his first huge loss.  That is another point I want to make not all of the traders I meet start off losing some make $20-$30k but manage to turn that into a $50k loss. Then you have the guy that bought at the 52 week/all time high only to see his stock eat it hard.  I have traded for years so I have become better at managing risk.  I have seen so many things go wrong.  I have taken several painful losses as well as healthy gains there are so many scenarios and things that can and do go wrong that I could have not known or hedged for when I first started trading.  I unlike most started trading with small amounts of money to protect myself and to make sure I did not confuse luck with skill.

There are just too many things to explain that I would need to write a book, just know that until you see many personal examples of irrational stock behavior, mistakes as well as other things go wrong (problems such as having your Internet service interrupted in the middle of a trade) don't day trade or stock trade too aggressively.  From my experience you shouldn't trade stocks every single day I think the more you trade the more likely you are to make mistakes so don't over trade, sometimes just holding on long term can be a better strategy.  Finally, you can't compete against huge financial institutions so know that your trades will always be at a disadvantage compared to the big boys.  If you decide to day trade you are only hoping to take little bits here and there off the table.  In regards to trading speed is everything.  Therefore be cautious or try other ways of making money that come with less risk.

One last thought on Tuesday I day traded GoPro at 43.55 today it is trading at 40.45 overnight I would have lost $3100 that is one of the risks associated with day trading.  Instead I went ahead and traded Twitter at 50.58 (now trading at 50.29) which gave me a quick profit.  I don't hold allegiance to any stock I pick what seems profitable for the day this changes day by day, minute by minute.  

Saturday, March 7, 2015

What To Do With Your Money In 2015

Most of the world's major economies are in deflation territory this makes it a bit difficult for investors to find ways to get returns.  India was one of the best performers last year their inflation rate is at 5%.  I went to a conference a few weeks ago and the speaker stated that the outside world was in a state of deflation as if we were not at risk, we have been experiencing low inflation December rates were 0.8% and January actually had negative inflation -0.1%.  In these cases you may be better off just leaving your money in the bank for the short term.  With a stronger dollar plus negative inflation your dollar gets more valuable without any risk just by holding on to it.  But long term deflation is not a good thing it will stall economic growth.  Low oil prices and low mortgage rates signal a drop in prices which can be good for consumers, let's assume the U.S. does not enter bad deflation it just continues with low inflation, investors will need to find a place to leave their money.

The world is looking for yields to grow their money there are no quality investments left out there to park money, no yield to be found.  What is scaring people is the risk factor of entering the stock market if the Fed decides to raise interest rates this summer.  That concern alone brought down securities on Friday.  It is likely to happen our economy has been growing without the Fed's help.  If the Fed decides to raise rates by how much will it do so?  Most likely stocks will still remain the only way to get decent returns the market may drop a bit with the news but eventually the world will need yield and this can mean that the bull market that started in 2009 will continue for a few more years.  It has been said by analysts that we are in the middle of a secular bull market.

In deciding where to put money consider the global economy.  If inflation rates remain low then you don't need to make high returns to fight inflation.  Where are you going to get those yields from a bank CD? They are safe but will give you very little interest.  Real estate is another option the 30 yr fixed is at a low 3.99% yet a lot of people don't have the money to buy or the credit to qualify so renting is becoming more popular than ever.  If you believe that the stock market will crash or that it's due for a partial correction then maybe you should just put it elsewhere a business or more education perhaps. Emerging markets are cheap but don't look too attractive.  In 2012 I wrote that the stock market was the best choice for investors but now things have changed when I wrote that post the fed was not going to raise rates anytime in the near future and the dow was not at 3 times its price from the 2009 low.  Some experts state that the market is not too expensive in regards to earnings.  Financial advisers usually recommend that you put 60-70% of your money into stocks that number has recently changed to 50%.  Then there are those individuals that experienced the crash of 2000 and then again in 2007 (yikes!), they are hating this bull market because they aren't participating their money most likely is in the bank.  Invest carefully, stay informed and make educated guesses while considering your risk tolerance.

Monday, February 9, 2015

How I Stay Fit on a Budget

People think that starving is the way to lose weight it wont work it will affect your health it will make you lose muscle mass which is the opposite of what you want.  For people with slow metabolisms if you start skipping meals your body will fight back by holding on to more fat when it does get fed since it knows that it may have to wait a long time to get fed again.  So ironically you have to eat more often to lose weight just make portions smaller and more colorful.  I eat food that I enjoy which is healthy but of course not as tasty as fast food.  I don't feel too tempted over the years I have discovered tastier foods that I can consume that wont affect my body in a negative way.

At the gym I shock my body by switching my routine.  I don't stay with the same weight training exercises for too long and I jog at different speeds and switch it up with walks, stair climbing and bike riding.  Burning the last bit of fat on my abs was very hard it took a lot of reading/trial & error.  It's as if the fat around your lower abs knows that it has been there for years so it's not going away without a fight, it makes sense it took years to build it around your midsection it wont disappear in a matter of weeks.

I think people need to increase their odds of success by taking small steps and adding a bit of more exercise to their life and then little by little start tweaking their diet to a lifestyle they can transition into. You don't want to lose 20 lbs in a month by starving eating salads and dry chicken breasts with nothing but water and massive cardio.  This will result in a short lived weight loss what will most likely happen is that you will hate the change and not only put on the 20 lbs you lost but probably put on an extra 20 lbs.  Although I mostly drink water and eat lean protein, fruits and vegetables I didn't make the change overnight otherwise I would have not been able to stick with it.  When I started I didnt have the knowledge to know what food was good for me so it is essential to learn to read and understand food labels and the serving size being used.

Here is a healthy snack I like to munch on in between meals: Unsalted Dry Roasted Peanuts

I also eat unsalted cashews and almonds the point is to eat low sodium snacks so it has to be unsalted and remember that it is a snack to be eaten in moderation don't eat it all in one day.  I bought the generic type ($2.99) I am not promoting any name brand buy your favorite store name brand if available just as long as you save some money.

Nutrition Facts

Serving size 1 ounce about 40 nuts
Calories 160, total fat 14 grams 
 Mono fat is 7g,Poly Fat 4g and Saturated is 2 g
Carbs 6 grams, Sugar 1gram, Protein 7g, fiber 2 g

Mostly good fat (mono & poly) the saturated fat is what you have to watch out for!