Stock Markets and Foreign Exchange

by Sam Whiskey 18 Replies latest jw friends

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  Sam Whiskey

  I'm starting this thread for those of us that love the process and rewards of Trading and Investing. Contrary to popular belief, the markets are not rigged and no one is ever "set up" to fail. The markets are an open format for capitalist's to take advantage of. Anyone can trade, invest and profit....if you know how.

  I watch CNBC and Bloomburg Business and Finance. I have been Investing and Trading since 1993 and I remember my first trade online. When online trading became accessible, it was a whole new world. Now the "average Joe" didn't have to rely on the intelligence (or lack therof) of a broker. My first trade was with a new airline called Frontier Airlines, I made a few bucks and I was hooked. I eventually learned about trading on Margin (trading twice the amount of actual cash in your account - essentially "borrowing" money to trade more shares). Later, I was looking for bigger and faster results and discovered Forex (Foreign Exchange) where trading ratio's went as high as 500:1. That's trading $500.00 U.S. of the broker's money for every $1.00 I put into the transaction. So...at 500:1, I could trade (control) $500,000.00 U.S. for $1,000.00 U.S.

  I've studied both Fundemental (Business and Macro forecasting) and Technical (Chart reading/interpretation) analysis for many years and I'll share what I know here.

  I will be posting my trades and investment ideas here for both Forex and Stocks. Anyone can feel free to contribute.....
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  Meeting Junkie No More

  GREAT - can't wait to learn more. Are you a day trader? or do you hold on to stuff for a while? I don't have the time to watch stocks constantly to see what they're doing so I buy and hold but I somehow get the feeling the day traders make the better money...
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  Sam Whiskey

  Day trading for Forex and Swing trading (hold for 1-12 months) for stocks. You will always do better holding stocks bought at bargain prices. Forex is a differennt story, very tough to hold for a long time, you want to capture your profits quickly.....15 mins. to 48 hours.
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  Meeting Junkie No More

  I'll have to google FOREX - never heard of it - shows you what I know!
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  Meeting Junkie No More

  First thing I read about Forex was 'may involve significant risk of loss' - already scared off! I guess it's all a risk tolerance thing...you win big, but you lose big too...Tell me about your losses (!) if any...or did you make them all back?
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  Sam Whiskey

  There's risk in everything. Riding a bike to the store or lighting a campfire. We all deal with risk in different ways. The idea of this particular situation is to know when the window of risk is at it's lowest point. Why do people wait so long to purchase a new flat screen T.V.? Risk! There is always the risk that prices will come down and they have, but where is the bottom? The bottom only reveals itself after some time, after prices level out.

  If I know that Coke (KO) is selling for $67.00 today but it falls to $15.00, is it a good deal? Is there value there? It depends...if Coke is going out of business, then I wouldn't buy it. But if it's just having a business glitch, it could be a bargain! How do I know if it's a bargain? Research, research and more research. Actually, most great buys are decided upon months in advance of the actual purchase. If I know that Coke is a great buy at $67.00 and it stumbles to $15.00 (because someone found a mouse in their Coke) and I buy it at $15.00 and sell it for $30.00, I just doubled my money because of a "temporary setback". If it goes to $45.00, I tripled my money.

  This is what you call a no brainer, and happens every day.

  This is how wealth is built. Not on luck, but knowing your game.
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  Sam Whiskey

  Month to date activity. Markets closed Friday 2:00 P.M. through Sunday 2:00 P.M.

  

  
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  WTWizard

  I do believe the markets are rigged. It is quite easy to start panic by lying, sell all your stocks, quietly buying them back, and then waiting for everyone else to panic and buy them back at higher prices than they panic sold them at. They also manipulate markets by selling paper contracts (they did that with silver during the period between 2001 and 2007), naked shorting securities and commodities, and altering the rules in the middle of the game. And the Fed is quite capable of printing toilet papers, and then using those toilet papers to buy stocks to the moon.

  All of which amplifies the risks. Usually, when you manipulate the markets, you are going to end up taking a bath. You naked short silver, sooner or later you are going to have to buy silver on the open market at much higher prices than you got when you shorted it. You print toilet papers to buy stocks, you succeed in creating hyperinflation that renders the value of those stocks near zero. The exchanges that alter the rules to force people on the margin to sell (driving down prices) lose credibility in time, and people will start wanting physical possession of that commodity (which I recommend with the metals).

  As for investing, if you see something well below its fair value, buy and hold. If it goes to well above fair value, that's the time to sell. Right now, metals and energy are well below fair value (especially silver and oil products), while paper securities (Treasury bills in the United Tyranny of America, especially) are much above fair value.
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  Sam Whiskey

  WTW, I agree and would be a buyer of AA (Alcoa-Aluminum) at the $10.00 level. When the demand for Aluminum returns, this company will appreciate in value. I also like ACH for the same reason. You WANT to look for stocks hitting 52 lows or multi year lows, but make sure these stocks have a catalyst for higher prices down the road. It OK to wait for price appreciation, just know what the catalyst is before you buy it.

  Coincidentally, $10.00 is a multi year low and support level for both choices. Notice that buyers come onto the scene at $10.00.

  I think Gold is going to sell off as it looks like the market is making a return to risk. When you see Gold attempt a new high in the form of a "Doulbe Top" or a "Head and Shoulders" pattern and it does not break higher, it's a sign that it's going lower. My personal opinion is that smart money is selling into the strength of the buying public, because the professionals know that Gold cannot sustain a "to the Moon Alice" tajectory. It's just not possible, it will reach or is reaching exhaustion.

  Gold pricing - daily (XADUSD,Daily)

  
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  darth frosty

  Good info sam I have been thinking of getting into forex trading.