|Forum - Wall Street Pit
||Stock Due Diligence for All|
|From: hazeleye (Rep: 239)||Date: 08/03/2012 22:51|
|Forum: Wall Street Pit - Msg #2300101||Thread #673437029 (Rec: 12) |
|17 FACTS for the NEWBIE DAYTRADER... |
1. Your venture here will likely be over very soon.
2. Realize that over 1/3rd of the stocks recommended here will either be listed on the OTC, bankrupt, or non-existent within 4 years.
3. Realize that if you buy a low volume stock in size on a day its flooded with volume, that volume will soon dry up and you'll likely be caught in a volume trap.
4. If your buying a small-cap stock immediately after seeing it mentioned here, remember that you are likely paying a 10%+ premium since everyone else also just bought. Wait for the pullback instead... more times than not you'll be able to get the "old" price again before the market closes... at which point you'll probably not want it anymore.
5. Remember that many of the people here are scalpers. They are willing to take .05 - .10 gains over and over again. If you buying based on their post, there is also a good chance you'll be buying their shares.
6. HFT (high frequency trading) programs don't care how smart you are or how good of a company it is you just bought.
7. The brokerages and big money boys all have L3. They can see your stops and will occasionally go after them... often before taking the stock right back up.
8. Brokerage firms and banks often come out with bogus upgrades and/or downgrades in order to steer a stock price in the direction they need it to go for their own book.
9. This past decade has been one of the worst decades to invest in. During the good times, many of the traders here (even the smart ones) went bust or quit trading because they decided it was better to have a real job.
10. Lionmaster has 1,886 followers, Superman has 849 followers, The Magician has 729 followers. How many of those followers do you still see posting here?
11. Flash crashes and computer glitches can now take stocks and ETF's down more than 70% in minutes. If you are on one side of this trade, good or bad, the SEC will decide whether to let your trade stand or not. Do you trust computer programs?
12. Most of the stocks traded here, because they are small caps, are little more than share printing and diluting machines. They care more about raising money and keeping their jobs and bonuses than they care about you... most care nothing about you.
13. Many of the "financiers" that loan small-cap companies money in exchange for stocks and/or warrants are nothing more than sharks. Often they will then turn right around and attempt to short this same company into oblivion in order to have some sort clause in their loan agreement kick in whereas they will get a reduced exercise price or get more shares. At some point, they will take their thumb off the stock and let it go... but that might be years later.
14. Often before a buyout, especially with smaller companies, you'll note (it will become clear after the buyout) the obvious attempts to steal shares before the announcement. That could come in the form of bogus downgrades, negative articles, spike downs to take out stops, or have a stock lose long standing support. On the flip side, more times than not all those things really do mean that you just bought a turd company. Is it real or is it a trick?
15. There are very few people you can trust on Wall Street. They all want one thing... to remove the money from your hands and put it in theirs.
16. As a trader, expect your stress levels to go up and your health to start deteriorating at a faster pace. It will likely take years before you notice.
17. You will be taxed on all your profits (Roth IRA's excluded).
Now for a game...
See how your trading style compares to your Grandmothers. Grandma has owned 3 stocks over the past decades. Plug your holdings into this chart to see how you compared:
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|NOTE: This message has been revised 7 times. Read original version of this message.|
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