Quote from IT-EarlyRetired:
Ideally combing investing and trading will get the best result and minimize the risk. I want to be an investor and trader in the same time. I don't want to gamble my money...
I think 25% return is not unrealistic in the year of 2005, 2006 for an "investor and trader"...
Unfortunately I was not in the market at that time. I don't know if there is any investing strategy to have 25% return in the recession, except gambling in very short term trading...
I made 15% in the period of June to October last year... I thought financial stocks were in the bottom. I always followed technical chart to make buy and sell. I made exception for CITIBANK and Wachovia. It is a big lesson for me...
In January I sold AAPL and GOOG after they drop below 200 days moving average to avoid lose more. I used the proceed to purchase more of CITIBANK and Wachovia. I didn't know sub prime problem would be that serious...
When CITIBANK hit $18 Merrill Lynch strategist suggested financial stocks were still too expensive... I blow out my accounts in these three months. It is really a big lesson for me.
I was optimistic last year as full time "investor and trader"... I don't have any idea in investing in recession.
I realized that I should be a trader, not an investor in the recession. As a trader, I only need a small amount of capital. I should learn trading technique, not picking up good stocks. I should be an active trader or even day trader... I sold the house in the very down market for a even below market price. It was completely a wrong decision. That's bothered me and drove me to the anxiety depression.
.. [/B]
Let me explain in simple terms how the market works, contrary to the opinion of some here. The big traders use two terms to describe ALL investors and traders... Smart Money & Dumb Money. They love it when you don't know/think you are trading against them and every failed move you have described above is exactly as they set it up. You statements add up to Dumb Money thinking.
You made 15% in a short period so 25% in a year should be a breeze; only problem was you blew up. Here's a reality check: if you can be a trader/investor making 25% a year, quit what you are doing and start managing other peoples money - they will throw it at you gladly. You'll be among the very best performers who have decades of experience trading various market scenarios. And you will do it with an exceptionally short learning curve after making a bundle of naive mistakes. Then you can write a book on how you did it.
While being around the top of the investor performance tables is one thing and 25% PA will put you up there, at the same time being able to cut it as a trader is quite another. But some here will tell you are not trading against the most ruthless, cunning competition⦠just yourself. Friend, when it to comes to money, you are in the lionâs den and you are dinner.
Just keep thinking as you do, doing as you have done and watch what happens when the market does it's next, "Well I didn't expect that!" move. No harm in dreaming so long as you don't think it's real... you have not paid you dues but one way or another if you continue you sure will.