Q For Those Who Do Online Stock...

[GreenPlease]

I totally disagree with you. And, no offense, but I think you are a couple of years behind in your understanding of the market(s). Value investing and buy and hold went the way of the horse and buggy. Today's markets are totally controlled by QUANTS. Perhaps as few as half a dozen QUANTs are responsible for half the trading vols on all the US exchanges. They paint the tape, as per agreements. Their little black box trading programs spew out a blizzard of buy and sell orders per nano second. You get a more level playing field at the local indian casino. I make my living trading and spend over ten hours per day trading and researching.

I also make my living as a trader, as did my father and his father before him. I'm also quite friendly with some of the folk at Citadel, one of the quant operations you speak of Please show me where I said "buy and hold". I never said that and never would. In fact, if you actually read my posts, you'd catch a detail that indicates that I'm quite the opposite of a buffett esque buy and hold type. BTW, you contradict yourself. The buy and hold strategy is dependent on the long term trend of inflation for success the very same trend that gold relies on.

INFORMED traders price goods

If the vast majority of traders and capital in a market are uninformed, they price the goods. There is no law that says that markets are rational or even "correct" for that matter. What you fail to realize, what so many fail to realize, is that when you place an order to buy or sell at a certain price you are communicating information to the market. Due to the size of the resources available to you, the impact of this information may be very very small but still exists none the less.

[jaiman]

Originally Posted by GreenPlease

If the vast majority of traders and capital in a market are uninformed, they price the goods. There is no law that says that markets are rational or even "correct" for that matter. What you fail to realize, what so many fail to realize, is that when you place an order to buy or sell at a certain price you are communicating information to the market. Due to the size of the resources available to you, the impact of this information may be very very small but still exists none the less.

I'll have to disagree. If the majority of the capital is held by uniformed people then they will quickly lose their capital to the informed traders. How can they not? Goods generally only have a relative value. If oranges get too pricey people will eat apples instead. If Bill Gates wanted to drive the price of FCOJ futures through the roof he could do it. But there would be no information in his buying.

Maybe I'm too hung up on price vs value. How about this, all traders determine price, informed traders determine value. And the further price deviates from value the more uninformed traders become informed traders there are.

[jaiman]

Originally Posted by Flyers2385

Cost Averaging is a great strategy to employ especially if the price has gone down on a good stock. Make sure to check into the rules of the trading service you are using as it pertains to margin trading. I would hold off on trading on margin if you're a beginner.

Whether avereraging down is good or not depends on the type of market you are trading. In a market prone to trends, its generally a really bad idea. The list of peole who have averaged down until they are broke is pretty long. AIG, Nortel, CSCO, really most of the NASDAQ since 2000 provide great examples of how averaging down can ruin you.

[hl0m4n]

wow thanks for the loadful of info guys, really appreciate it. i see there is alot of terms i need to know, maybe i should get a book to get me started... any recommendations on a short to the point book?

as for google that is a company i would def go with. kept an eye on that for awhile now and i know for a genuine fact they will always go back up... that is one of the companies i wanted to buy stock in.

along with that aig which i would have made profit on if i bought it back when it was $7-10 and sold it recently i believe a few days ago at like $40+ (too lazy to recheck atm ).

i do check stock on a daily basis to see how i am doing like a self gamble type thing on about 30+ companies i am looking at.

[pittsy]

I use scottrade as well.

[stylinexpat]

Originally Posted by hl0m4n

wow thanks for the loadful of info guys, really appreciate it. i see there is alot of terms i need to know, maybe i should get a book to get me started... any recommendations on a short to the point book?

as for google that is a company i would def go with. kept an eye on that for awhile now and i know for a genuine fact they will always go back up... that is one of the companies i wanted to buy stock in.

along with that aig which i would have made profit on if i bought it back when it was $7-10 and sold it recently i believe a few days ago at like $40+ (too lazy to recheck atm ).

i do check stock on a daily basis to see how i am doing like a self gamble type thing on about 30+ companies i am looking at.

AIG split, climbed a bit, tanked after, spiked after to $50 and then dropped after..