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Monday, February 15, 2016
Saturday, February 13, 2016
fathers
still studying the question of whether you can trade, that is, hold for less than a year, inside a Roth IRA. no evidence so far that you can't. here's an interesting page. let's study it for perspective. what are the Church Fathers saying?
mechanics
what would your investing look like?
let's say you have a Scottrade account with $1000 in cash in it.
should you invest all of it in one company? if you win, you save a little on commissions. or should you invest $100 in each of ten stocks?
what would be the advantage of the latter? ironically, it would hold you to a long term commitment, or push you in that direction, and that could be a good thing. certain very informed investors would have you never look at your stocks, by the way. it could be said i'm training you in bad habits, here.
the other reasons would be you aren't sure of yourself and diversification might help, but maybe then you should do more research, or you can't decide between the many fine stocks you're seeing, and then one or another might do especially well, and it might be good you bought even a little of it. i suppose.
or you might have looked at all the evidentiary charts, if that's a word, and decided trading is for you, and that you can pick the especially good ones for super-rapid gains. then the solitary investment is definitely it ... with a stop! how is that constructed?
anyway, what are the actual mechanics of buying a stock? i've been writing about buying at the breakout level, so, seeing a signal, you could place a limit order there, all or nothing, even guc. (do you know what a limit order is? do you understand it well?). but it only might be filled.
you could place your limit a little higher ... i mean just a smidge. then it might be more likely to fill. and you could, conceivably, watch the market, and i mean during the day, and if it gets near the breakout level, buy at the market. you could do that.
but, if you don't want to do that, if the fundamentals are compelling, just buy at any price, or place your limit at the breakout day high, assuming it isn't all that elevated - assuming it looks just right based on your extensive inspections of historical examples.
watching a stock all day is hard. it might be fun, but it's probably kind of a silly thing to do. maybe we can learn to predict a good limit effectively. so far everything worthwhile has touched the breakout limit ... in a few cases that might be considered worthwhile gone through it. maybe orders near the breakout level, a little above the breakout level, are actually likely to be filled. experience will tell.
let's say you have a Scottrade account with $1000 in cash in it.
should you invest all of it in one company? if you win, you save a little on commissions. or should you invest $100 in each of ten stocks?
what would be the advantage of the latter? ironically, it would hold you to a long term commitment, or push you in that direction, and that could be a good thing. certain very informed investors would have you never look at your stocks, by the way. it could be said i'm training you in bad habits, here.
the other reasons would be you aren't sure of yourself and diversification might help, but maybe then you should do more research, or you can't decide between the many fine stocks you're seeing, and then one or another might do especially well, and it might be good you bought even a little of it. i suppose.
or you might have looked at all the evidentiary charts, if that's a word, and decided trading is for you, and that you can pick the especially good ones for super-rapid gains. then the solitary investment is definitely it ... with a stop! how is that constructed?
anyway, what are the actual mechanics of buying a stock? i've been writing about buying at the breakout level, so, seeing a signal, you could place a limit order there, all or nothing, even guc. (do you know what a limit order is? do you understand it well?). but it only might be filled.
you could place your limit a little higher ... i mean just a smidge. then it might be more likely to fill. and you could, conceivably, watch the market, and i mean during the day, and if it gets near the breakout level, buy at the market. you could do that.
but, if you don't want to do that, if the fundamentals are compelling, just buy at any price, or place your limit at the breakout day high, assuming it isn't all that elevated - assuming it looks just right based on your extensive inspections of historical examples.
watching a stock all day is hard. it might be fun, but it's probably kind of a silly thing to do. maybe we can learn to predict a good limit effectively. so far everything worthwhile has touched the breakout limit ... in a few cases that might be considered worthwhile gone through it. maybe orders near the breakout level, a little above the breakout level, are actually likely to be filled. experience will tell.
roth
we're learning about the Roth IRA. we're kind of slow.
if you're buying something you think will go up continually for a year, or that it will go up within a year and then stay up, maybe forever, and you're committed to it, do it from within a Roth IRA.
a simple but very specific set of rules applies if you want to create a Roth IRA and invest in it.
it seems i'm mistaken in saying you need to hold a stock for a year in a Roth IRA. i didn't actually say that, but i thought and implied it. it seems you can buy and sell any time you want, in the account, but that you cannot withdraw profits for five years after you first contribute to the account ... without facing a penalty. (the list of consequences is interesting.)
if you are committed to five years of investing with some part of your money, and you qualify, investing within a Roth IRA can ultimately save you gobs in taxes.
seems kind of dreamy.
this kind of looks like an official site, though i don't actually know what it is. anyway, it's got articles about the rules - in fact, that's what it is, articles about the rules. it's set up like a guide. maybe it is one. oh, wait, i was looking at the Roth IRA rules article, not the web site (rothira.com). the article is listed in the home page, though.
i'm just getting a little excited because i'm finding these solid looking, safe looking, long term type companies in my current scan. i wonder if knowing (if it's true) you can trade from within a Roth IRA changes things?
if you're buying something you think will go up continually for a year, or that it will go up within a year and then stay up, maybe forever, and you're committed to it, do it from within a Roth IRA.
a simple but very specific set of rules applies if you want to create a Roth IRA and invest in it.
it seems i'm mistaken in saying you need to hold a stock for a year in a Roth IRA. i didn't actually say that, but i thought and implied it. it seems you can buy and sell any time you want, in the account, but that you cannot withdraw profits for five years after you first contribute to the account ... without facing a penalty. (the list of consequences is interesting.)
if you are committed to five years of investing with some part of your money, and you qualify, investing within a Roth IRA can ultimately save you gobs in taxes.
seems kind of dreamy.
this kind of looks like an official site, though i don't actually know what it is. anyway, it's got articles about the rules - in fact, that's what it is, articles about the rules. it's set up like a guide. maybe it is one. oh, wait, i was looking at the Roth IRA rules article, not the web site (rothira.com). the article is listed in the home page, though.
i'm just getting a little excited because i'm finding these solid looking, safe looking, long term type companies in my current scan. i wonder if knowing (if it's true) you can trade from within a Roth IRA changes things?
more how to
more on the subject of how to read the blog:
note that clicking on the charts enlarges them
note that the top chart in a post is the updater. it shows you the latest data (when you load the post).
then the bottom post in a blog is the first observation.
the history of the trade, if it's not complete in the bottom post, follows, from bottom to top, in the charts above the bottom post and below the top post.
note that clicking on a chart also puts you into a slide show of all the images in the post. which one is the top chart? probably the first slide ... but i have to wait to test that.
note that it is cavalier of me to say it's safe to hold through dips ... although, if the stock is fundamentally sound then that's the practice of the all time most successful investors. the question is, are we sufficiently knowledgeable to assess the fundamentals? it always worries me. that's why i am studying these chart patterns. how well will they perform? only time will tell. in the posts or in the slide shows, study the updaters versus the historical charts. return to them again and again. schedule reviews of older posts at intervals of months.
note that clicking on the charts enlarges them
note that the top chart in a post is the updater. it shows you the latest data (when you load the post).
then the bottom post in a blog is the first observation.
the history of the trade, if it's not complete in the bottom post, follows, from bottom to top, in the charts above the bottom post and below the top post.
note that clicking on a chart also puts you into a slide show of all the images in the post. which one is the top chart? probably the first slide ... but i have to wait to test that.
note that it is cavalier of me to say it's safe to hold through dips ... although, if the stock is fundamentally sound then that's the practice of the all time most successful investors. the question is, are we sufficiently knowledgeable to assess the fundamentals? it always worries me. that's why i am studying these chart patterns. how well will they perform? only time will tell. in the posts or in the slide shows, study the updaters versus the historical charts. return to them again and again. schedule reviews of older posts at intervals of months.
brk
 |
 | the first signal was the first day in Ocober ... a spindly red bar breakout, in a flag directly off a dip ... and heel ... just like the last example, and they both have produced ... now ... dips. plus, the ... well, you buy at the breakout level. it broke out from a pattern that formed after the red bar in mid September, and from a three bar pattern that created a third bottom after and including that red bar, and the day after the breakout it dipped into that three bar pattern, thus producing a buy on the return to the breakout level. but the rally that followed stalled out. it remained in break-even territory for months, then dipped. it just broke out again, right at the end of January. it's building a base, here. i wrote about buying dips ... about if you bought a signal and then it dips, and flashes more signals at lower prices, buying more, buying again ... a dangerous tactic if you don't know what you're doing ... but i wonder what the fundamentals are like. oh my God, it's Berkshire! the most fundamentally sound company in existence! well, it's marked down 10%, and this green marubozu scan seems to highlight fundamentally strong companies ... it could be one way to find them. |
be careful
be careful!
this is strictly non-professional ... it's notes.
do you understand breakouts, stops, no stops, dips, waiting out dips?
any money you invest you can lose.
you have to be very effective to make money trading $100 investments, catching big moves, or your commissions eat your profits. you would need ... if you don't already know how to do it, and you're trying to learn here ... to, in fact, learn - what works, what doesn't - from these examples, of which there are, at this writing, only a few.
with $1000 investments, you can make money on small % moves, but your risk is greater, so there's no less need for precision, for that thing, effectiveness, for careful, systematic study of many many examples. this is a system testing record. be extremely realistic about hindsight trades. i wouldn't say i've got it all figured out.
there is a proper way to read the blog, and that's from the bottom to the top. in the side bar, find the earliest year of posts - maybe i'll keep this up for years, who knows - and click it. find the earliest month in the year, and click that. now find the earliest post in the month, and click that.
from there you have to navigate to the next (next earliest) post ... using the inconvenient "earlier post" link at the bottom of the post, or maybe using the side bar.
or, you can create big scrolling pages of posts by clicking the months ... and, of course, the most recent posts, and even actual alerts, would be at the top of the blog ... which you can get to by clicking the blog title.
this is strictly non-professional ... it's notes.
do you understand breakouts, stops, no stops, dips, waiting out dips?
any money you invest you can lose.
you have to be very effective to make money trading $100 investments, catching big moves, or your commissions eat your profits. you would need ... if you don't already know how to do it, and you're trying to learn here ... to, in fact, learn - what works, what doesn't - from these examples, of which there are, at this writing, only a few.
with $1000 investments, you can make money on small % moves, but your risk is greater, so there's no less need for precision, for that thing, effectiveness, for careful, systematic study of many many examples. this is a system testing record. be extremely realistic about hindsight trades. i wouldn't say i've got it all figured out.
there is a proper way to read the blog, and that's from the bottom to the top. in the side bar, find the earliest year of posts - maybe i'll keep this up for years, who knows - and click it. find the earliest month in the year, and click that. now find the earliest post in the month, and click that.
from there you have to navigate to the next (next earliest) post ... using the inconvenient "earlier post" link at the bottom of the post, or maybe using the side bar.
or, you can create big scrolling pages of posts by clicking the months ... and, of course, the most recent posts, and even actual alerts, would be at the top of the blog ... which you can get to by clicking the blog title.
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