Yearly Returns With TA
Q: TA seems to be a pretty good way to invest, IMO. I used to fumble around with stocks. I Made some good picks, and I made some very bad picks. I had never heard about technical analysis. Then, I got plugged in to a site that does nothing but TA. Http://www.tradewithpizzadriver.com.
A:
I've been lurking around for a while and trying out various indicators. Still
trying to learn a lot. I've come across a site recently that uses TA for
picking stocks, and I'm wondering if anyone has heard of them. I'm thinking
about signing up, and want to get some oppinions. Their trade record is
quite impressive, so I'm very interested in
Anyway, the site is http://www.tradewithpizzadriver.com.
I appreciate the apparant solicitation in disguise, but I would never
pay for something like that. I can barely bring myself to pay
commissions on trades. I am glad to hear that atleast greater than
market average can be an expected norm. I have another question in
that case...what do you think would best fit my situation? I have a
small amount of capital to work with (5,000 roughly) which takes some
pretty sizeable returns to make it worthwhile. Should I put it all in
one boat and pray it does what I want, divide it into smaller lots to
be safer with the possibility of not covering commissions, or just
wait and come back in 10 years when I've got some real money to
dedicate? I'm hoping the best answer isn't the latter, because I
really enjoy this, but losing money would ruin this enjoyment.
With the amount of money you have, and if you wish to do this, the first
thing you need to do is find a cheap broker. Interactive Brokers comes to
mind. (I don't use them, but I do know a lot of people that use it and they
claim to work fine)... Comissions are cheap like 0.01 per share for the
first 500 shares I believe and then it goes to 1/2 a cent per share above
500. (That was their comission schedule last time I checked. It could have
changed since then).
If you have the ability to monitor your stocks at least daily (not thinking
every second of every day here), you CAN get this to work. However it is
going to be quite tough. You will lose some money at first as you find and
get comfortable with the trading system that fits your style the best.
If however you are unable to watch this market on a continual basis,
honestly I think that amount would be best if you place the money into a
Mutual fund somewhere, and as time passes by, you may have more money to get
this going.
Personally I do believe that, although hard, that managing $5000 can be
done. A while back, I opened up a "dummy" account with a cheap comissioned
broker (yes Interactive brokers), and put 5000 on it, just to see how one
would do with my trading style on a small account. The draw down was quite
heavy. The account at one point was as low as $2900, but within a year it
was 7000 and change, I believe. It was done as a test, and it worked out
pretty good, however I was able to watch this constantly and I am sure that
is what helped a lot.