Why is the turmoil on wall street bad for investors?
Consider this: I’ve been "playing" the stock market with 00 fake money and have doubled it in one month. Without the volatility i would never have been able to do that. I’ve bought in the pits and sold on the upswings (yes the upswings, not the crest). Of course, i’ve made 50 trades which adds up to over 0 of fees, but I already factored that in. I’m enjoying the volatility, why do ppl consider it an end to their investments?
Comments
Congratulations.
Of course, many people do find it easier with fake money and suddenly don’t do so well with real.
Because you’ll need more like $50,000 to do that now and be rich enough to actually try it.
Everything changes when you start using real money.
Those volatility dips and swings against you will force you out, because fear of losing will then be superceeding logic, and you will exit before it goes big in your direction. This is called "fear," which does not exist in a fantasy trading world.
Then when you finally do hit a good move, you will get out too soon (fear again) or hold on too long (greed) and hopefully close out for a scratch trade or better.
You’ll need $25,000 minimum to day trade.
When you use real money, you’re asking your broker for real trade executions. In a volatile market, real trade executions may occur at prices rather different from the prices you saw when you placed the order. I’m sure you’ve noticed that the Dow can move 100 or even 200 points in 5 minutes. That kind of volatility can mean your purchases are unexpectedly expensive and your sales are at unexpected low prices. This kind of unpredictability discourages people from putting real money, which they may have sweated to earn, on the line.
August 13th, 2010 at 12:58 am
for everyone of you there are 10 people that tried the same thing a lost money. It is like the famous story about the stock picker trying to get clients.
He calls up 128 people and tells them Stock A is going up and 128 people saying Stock B is going down.
then next day, either A goes up or down, so he was right with 128 of the people, and never calls the other 128 again. He then tells 64 of the "right" people that B will go up and 64 that it will go down.
he keeps going until on day 8 he has one client that thinks he picked 8 stocks in the row and he knows what he is talking about and gives him all of his money to invest.
You were just the lucky one of the 256 people that tried this.