Trading - Lessons from Stock Wizards

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Is it way too simplistic to think a person could be successful starting off slowly, say with a small % of my overall portfolio as "play" money and a goal of trading trends to the tune of $200/day and not holding any positions overnight? The plan wouldn't be to find a bottom to buy or a top to sell, but rather a little slice in between after performing enough due diligence so that only one or two trades would be necessary to reach said goal.



Of course some days will be winners and some will be losers and some days you'll make more and other days you'll make less, but it is a must to remain disciplined to the plan to avoid the slippery slope of trading on emotions and poor bankroll management--much akin to poker, but on a much grander scale with an infinate number of variables (and not to metion intimidating).



Regarding technicals, are we talking about actually performing intense calculations as part of the due diligence or rather an understanding how stats are derived and what they mean?



Obviously I am oversimplifying here, so I am fully expecting a smack down and you can let me have it. Maybe I should start reading the Day Trading for Dummies series. ;-)
 
Here is the PDF file on <a href="http://www.irvinehousingblog.com/wp-content/uploads/2007/11/sunshine-and-trading.pdf">Sunshine and Trading</a>.





I guess this explains why I am trading well today.
 
Adam,





That is a great way to learn trading without going broke.





<em>"Regarding technicals, are we talking about actually performing intense calculations as part of the due diligence or rather an understanding how stats are derived and what they mean?"</em>





Actually, understanding technical analysis is similar to learning how to dance with a partner. Once you learn the way prices move, you kind of dance with them. You recognize that certain price levels are where you get reversals, etc. Like ballroom dancing, there is no substitute for experience and getting to know yourself and your partner.





If you want to learn to day trade, you will need to study pivot points and market internals. I suggest John Carter's book <a href="http://www.amazon.com/Mastering-Trade-McGraw-Hill-Traders-Edge/dp/0071459588">Mastering the Trade</a>.
 
Luck, sunshine, or just plain common sense, <a href="http://tinyurl.com/3cl8rz">these guys know what they are doing</a>.





<em><strong>It's not over yet</strong></em>

<p><em>Still, both Paulson and Burry said the credit crisis is far from over.</em></p>

<p><em> The housing market will likely deteriorate further, Paulson predicted. Home prices have fallen 3% in the U.S. so far, but he reckons there could be a 15% to 25% drop in prices from their peak. </em></p>

<p><em> Most of Paulson's remaining subprime mortgage positions will likely be written off as losses on these securities keep rising, he added, noting that his firm bet against the lowest-rated, riskiest parts. </em></p>

<p><em> Cumulative losses of 6.25%, on average, would wipe out these securities, but losses on such securities sold in 2006 could end up being at least twice that, which will wipe out higher-rated parts of these structures, Paulson explained.</em></p>




Yes, a little bit of luck is what was behind this:





<img src="http://www.marketwatch.com/charts/int-adv.chart?symb=NFI=WA&sid=2862372&time=2&startdate=&enddate=&freq=7&comp=&compidx=aaaaa~0&uf=0&ma=1&maval=50&type=4&size=1&lf=1&lf2=4&lf3=32&style=1013&mocktick=1&rand=518363595" alt="" />





Who says you can't make money in shorting subprime anymore?
 
I don't know how many people here are familiar with it, but I strongly recommend subscribing to The Kirk Report ( www.thekirkreport.com ) I found out about him (Charles Kirk) from an article on Barrons and started reading his free stuff. I was intrigued enough to subscribe, and it is well worth it. (He lets you decide how much you want to pay, but the minimum donation is $50 a year) Although he shares information on trades that he makes on a daily basis and includes the output of various stock screens he uses for his watch list, the true value in the sight is the lessons he gives that teach you to do what he does.
 
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