OFFICIAL STOCK MARKET AND ECONOMY THREAD VOL. A NEW CHAPTER

[johnnyredstorm]

Can u talk about confirming a breakout? Seems a common issue for me is going in on a breakout only to have it reverse. Or even worse it reverses, take out my stop below the breakout, and then continues higher. Find myself missing a majority of the move waiting, or just death by a thousand cuts taking a bunch of stop losses.

man I’ve had this issue a ton as well. I haven’t found a perfect way to address it, but aside from just scalping the breakout for a quick day trade, it might just have to be less size more range on the initial buy and wait for a confirmation of the breakout sticking (so a trend forming on the 1 minute after 10 am). I’ve also been buying the retest after the breakout and I think that could work as well. The best plays for me have come when I’m already in the stock during the base building period and I add with some house money on the breakout or buy more on the retest. I’ll only trade stocks these days that I’m comfortable buying and holding for a year if I decided to, just relieves some pressure, I don’t do well with buying garbage tbh.

I’m interested if the offer stands. Whenever you have time bro. Roku or Apple, whichever illustrates the point better. Or anyone really.

Included the first buy signal, then we saw that repeated on the ATH breakout, now we just had a shakeout/retest and want I want to see is a move through today’s high to confirm, or if an inside day, we hold today’s low

ROKU im anticipating this one to play out like the previous higher low that was made (first oval), again liking it through today’s highs as a trigger to anticipate a breakout to new ATH’s. Doesn’t mean it’ll work but recognizing a pattern and managing risk from it is the best you can do

I will say trips to the 21 ema during a bull market offer good r/r typically if you see it hold with some wicks that go beneath it and get snatched up back above it. It might chop around on it for a few days so be aware.

 

[johnnyredstorm]

I also think the best bang for your buck comes from swing or position trading so that’s the way I operate usually. Since cash is tight for a new stock, I’ll create cash flow from adding to a stock I hold, get the move I want at some point, then taking that add off and moving somewhere else.

When I take a quick day trade, I don’t worry about my cash position since I know I’ll be out by the close but I don’t day trade often and when I do, it’s usually a size that lets me risk $25-50 so I’m not trying to get rich, but create cash flow and compound into my long term holdings.

most important thing is that risk. I could afford to risk 5-10x more but why bother. I have a job, this is to just compound.

 

[Lucky13s]

johnnyredstorm Thank you so much for taking your time to share that. I will take my time to try and really understand everything you shared. I may have some questions for you, but it won't be until later in the week. Please know that this is appreciated and won't go to waste.

 

[Lucky13s]

I have all my $ in a couple vanguard mutual funds but lately I’ve been thinking about opening a Roth and moving some there. It would be worth it to the tax benefits right? For my mutual fund I knew you paid taxes on gains but thought it was only when you withdrew I didn’t realize I was paying the past couple years

if I open a Roth also with vanguard and move my money there I would be able to reinvest in the same mutual funds right? But I would lose my entry positions from 2 years ago?

i don’t have any new $ to deposit so I would be transferring from my mutual fund to max out the Roth, at least for this year

You need to follow up with your own research because I'm only going to touch on the basics, and my information may not be 100% correct or current (I'm not an expert, things change every year, and there are different rules based on your age & income). But this should put you on the right track.

You can't transfer your mutual funds to an IRA (Individual Retirement Account), you would sell your mutual funds, and then invest into an IRA (Regular or Roth) with that money. If you love using Vanguard you can continue using them to open up an IRA, but if you're not married to them then I recommend using one of the "Big Four" brokerages (Fidelity, Charles Schwab, E*Trade, TD Ameritrade). In my humble opinion Fidelity is the absolute best of the best. They are old (70+ years in business), extremely professional, offer great customer service, and offer the most free research. And you can purchase various Vanguard ETFs and Mutual Funds through them (VOO, VTI, VNQ,VYM, VGT, VWO), although their Fidelity ones are arguably even better (I love FBGRX).

There are two types of IRAs (Individual Retirement Account), regular IRA and Roth IRA. The most you can contribute to either is up to $6000. You have until April 15th (tax deadline) to contribute for the previous year, so right now you could still contribute $6000 for 2020 and another $6000 for 2021. Both options offer tax breaks. With a regular IRA, you get the tax break on the front end by deducting it on your taxes, reducing your tax liability. However, once you withdraw your funds you will be taxed. A Roth IRA does not offer any tax deductions. However, when you withdraw your Roth IRA it will be tax-free (even the earnings) as long as you've had the account for at least 5 years.

You have to remember though, these are retirement accounts. That means you can't withdraw from them until you're 59 1/2, or you'll incur a 10% penalty. There are some exceptions you should get acquainted with (for example, you can withdraw I believe $10K penalty free if you're purchasing a new home, and you can withdraw penalty free if it's a medical emergency).

If you have an employer, do they offer a company-sponsored retirement fund (401K, Roth 401K, )? If so, and if you don't already utilize it, you may want to consider it. You can have a 401K and an IRA if you want. A Roth 401K is similar to a Roth IRA in that it'll be tax-free when you withdraw. A regular 401K is slightly different to an IRA in that you won't get a tax deduction since the funds put into the 401K are pre-tax already. A few advantages of a 401K over an IRA: max contribution limit is $19,500 instead of $6,000, and some employers match contributions. This "match" is pretty much free money. Every company is different. Some don't offer any retirement plans. Some offer retirement plans but don't match at all. Some will match 50% or 100% of your contribution up to a certain amount of your salary (3% to 6% is common). So an example, let's say you make $1,000 a week before taxes. Let's say your company offers to match 100% of your contribution for up to 6% of your salary. 6% of your salary (remember, $1,000 a week) is $60. So anything you contribute to your 401K up to $60 weekly, your company will put a matching amount into your 401K too. You could (and should, if possible) contribute more to your 401K, but the company will only match up to the amount they've agreed to (again, 6% in this example). Free. Money. FREE!

Since every employer is different, retirement plans offered (and any matching) is something to keep in mind when considering a new job. It is considered a "benefit," like health insurance or dental. So back to the $1000/week example, your regular salary would be $52,000 at a company with no 401K matching, but at a company that offered 6% match your salary would effectively be $55,120 ($52,000 + $3,120) if you took advantage of the matching.

One last advantage of a 401K. It's harder psychologically for people to take money from their savings account to fund an IRA. It's just easier for most people mentally for it to be automatically deducted from their paycheck. Depending on the amount, over time you may not even notice the deduction much, if you adjust accordingly (less frivolous spending). Obviously if someone's paycheck barely covers rent/food then this isn't true, but for a lot of people it's doable.

Let me know if you have any questions.

 

[buddhashark]

AZN is now the best vaccine

 

[1c3m4m]

Timeline last week concerning the $AMC hype

Bought a $7 Call for $51 on monday from the dip that expired that friday, also had some shares I bought early in the month that I was already up on

Everything going well, wednesday I was up about a $1000 on the contract, stocks were booming

Then D-day I mean thursday came, RH resticts the buying yada yada, everything goes down hill

I panic sell everything, big loss on stocks, made only $200 on the contract

Then friday comes, everything is back up, would have had everything I lost if I just held on ONE more day

Learning experience it was, dont be like me, still feel like an idiot but what can you do, in total lost about 2k, missed out on a potential 3k

just sharing my story, i always talk abt the good only fair i share the bad, others lost millions so I cant really be too upset lol

 

[anderson]

You need to follow up with your own research because I'm only going to touch on the basics, and my information may not be 100% correct or current (I'm not an expert, things change every year, and there are different rules based on your age & income). But this should put you on the right track.

You can't transfer your mutual funds to an IRA (Individual Retirement Account), you would sell your mutual funds, and then invest into an IRA (Regular or Roth) with that money. If you love using Vanguard you can continue using them to open up an IRA, but if you're not married to them then I recommend using one of the "Big Four" brokerages (Fidelity, Charles Schwab, E*Trade, TD Ameritrade). In my humble opinion Fidelity is the absolute best of the best. They are old (70+ years in business), extremely professional, offer great customer service, and offer the most free research. And you can purchase various Vanguard ETFs and Mutual Funds through them (VOO, VTI, VNQ,VYM, VGT, VWO), although their Fidelity ones are arguably even better (I love FBGRX).

There are two types of IRAs (Individual Retirement Account), regular IRA and Roth IRA. The most you can contribute to either is up to $6000. You have until April 15th (tax deadline) to contribute for the previous year, so right now you could still contribute $6000 for 2020 and another $6000 for 2021. Both options offer tax breaks. With a regular IRA, you get the tax break on the front end by deducting it on your taxes, reducing your tax liability. However, once you withdraw your funds you will be taxed. A Roth IRA does not offer any tax deductions. However, when you withdraw your Roth IRA it will be tax-free (even the earnings) as long as you've had the account for at least 5 years.

You have to remember though, these are retirement accounts. That means you can't withdraw from them until you're 59 1/2, or you'll incur a 10% penalty. There are some exceptions you should get acquainted with (for example, you can withdraw I believe $10K penalty free if you're purchasing a new home, and you can withdraw penalty free if it's a medical emergency).

If you have an employer, do they offer a company-sponsored retirement fund (401K, Roth 401K, )? If so, and if you don't already utilize it, you may want to consider it. You can have a 401K and an IRA if you want. A Roth 401K is similar to a Roth IRA in that it'll be tax-free when you withdraw. A regular 401K is slightly different to an IRA in that you won't get a tax deduction since the funds put into the 401K are pre-tax already. A few advantages of a 401K over an IRA: max contribution limit is $19,500 instead of $6,000, and some employers match contributions. This "match" is pretty much free money. Every company is different. Some don't offer any retirement plans. Some offer retirement plans but don't match at all. Some will match 50% or 100% of your contribution up to a certain amount of your salary (3% to 6% is common). So an example, let's say you make $1,000 a week before taxes. Let's say your company offers to match 100% of your contribution for up to 6% of your salary. 6% of your salary (remember, $1,000 a week) is $60. So anything you contribute to your 401K up to $60 weekly, your company will put a matching amount into your 401K too. You could (and should, if possible) contribute more to your 401K, but the company will only match up to the amount they've agreed to (again, 6% in this example). Free. Money. FREE!

Since every employer is different, retirement plans offered (and any matching) is something to keep in mind when considering a new job. It is considered a "benefit," like health insurance or dental. So back to the $1000/week example, your regular salary would be $52,000 at a company with no 401K matching, but at a company that offered 6% match your salary would effectively be $55,120 ($52,000 + $3,120) if you took advantage of the matching.

One last advantage of a 401K. It's harder psychologically for people to take money from their savings account to fund an IRA. It's just easier for most people mentally for it to be automatically deducted from their paycheck. Depending on the amount, over time you may not even notice the deduction much, if you adjust accordingly (less frivolous spending). Obviously if someone's paycheck barely covers rent/food then this isn't true, but for a lot of people it's doable.

Let me know if you have any questions.

Really great information. ty for posting

 

[johnnyredstorm]

Timeline last week concerning the $AMC hype

Bought a $7 Call for $51 on monday from the dip that expired that friday, also had some shares I bought early in the month that I was already up on

Everything going well, wednesday I was up about a $1000 on the contract, stocks were booming

Then D-day I mean thursday came, RH resticts the buying yada yada, everything goes down hill

I panic, sell eveyrthing, big loss on stocks, made only $200 on the contract

Then friday comes, everything is back up, would have had everything I lost if I just held on ONE more day

Learning experience it was, dont be like me, still feel like an idiot but what can you do, in total lost about 2k, missed out on a potential 3k

just sharing my story, i always talk abt the good only fair i share the bad, others lost millions so I cant really be too upset lol

This is why it’s so important to take targets on short term ideas. AMC should never have been something people would hold the line and blind buy and hold.

you need to always trim on trades and have a hard stop put in place to protect you. It’s better to make $1,000 and miss out on $2,000 than try to make $5,000 and lose $3,000. Scale out of the position on the way up and raise your stop as the stock is moving.

YouTube growth numbers were stupid. 46% growth, they’re pulling in like 15 billion in revs. Why the hell have I never owned Google?

 

[1c3m4m]

johnnyredstorm im still learning how to put the automatic sells in place, need to learn the terminologies and what they mean, gotta look at a guide or youtube vid

I should have just sold the contract wednesday, a friend of mine with the same contractdid and shes good, as soon as the market open thursday it dropped $500, and went lower as the day progressed

 

[Lucky13s]

A anderson You're very welcome. Honestly, half the stuff posted here is above my current understanding, but I have no reservations about asking questions or using Google to read and learn.

I have a pretty good understanding of the basics / fundamentals and am more than happy to help people just starting out. This stuff is important but it isn't taught in school, so no shame in asking questions. The only shame would be to continue to not know, when the information is out there.

I do recommend reading online though, there are tons of resources (Investopedia, Fidelity, etc) to learn the basics like terminology for instance. And when you have a specific question, NT members will be happy to answer.

 

[CrownRoyalDaddy]

Wheres Ewing and whats his gem of a play for today?

 

[Zo gif]

$SNDL

 

[ShoeGod1423]

Good thing I read to keep perspective during these great times...

Why Investors Should Remember The Dunning-Kruger Effect
A surging stock market is thrilling. This excitement comes not only from rising share prices but from the vindication of knowing our investments were a wise decision. However, can we really congratulate ourselves? The Dunning-Kruger effect says no.

The Extent of One’s Ignorance
Often, we remind others of the famous adage that wisdom comes from acknowledging our limitations. Rarely do we consider this phrase when evaluating our own choices. The Dunning-Kruger effect, a cognitive bias, illustrates that we frequently overestimate the abilities of our intellect. This term comes from a 1999 research paper authored by Justin Kruger and David Dunning.
This bias is particularly dangerous because it compounds a problem. First, we make poor decisions as a result of unwarranted confidence. Then, this same overestimation prevents us from learning that the error arose from our faults.
The researchers uncovered this phenomenon when realizing that participants who received scores in the bottom quartile of logic tests “grossly overestimated their test performance and ability.” This loop perpetuates leading to one bad decision after another without the individual ever coming to terms with the root of the problem: themselves.
Investors Beware
The Dunning-Kruger effect doesn’t assert that we’re all fools. However, the valuable research does serve as a reminder that sometimes we must step back and take a closer look at our actual abilities. Put succinctly, “You better check yourself before you wreck yourself.”
David Dunning later wrote, “This isn’t just an armchair theory. A whole battery of studies conducted by myself and others have confirmed that people who don’t know much about a given set of cognitive, technical, or social skills tend to grossly overestimate their prowess and performance, whether it’s grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, or financial knowledge.”
Today’s technology is perpetuating this bias. More than ever we’re able to insulate ourselves by curating our own news and research. This practice limits our purview. We seek out information that only serves to reinforce our beliefs. This tendency is particularly dangerous for investors.
When we limit the scope of information relating to an investment choice we risk missing critical signals. However, there is a way to break out of this loop.
Getting the Entire Picture
Traders fight the Dunning-Kruger effect by sharing ideas among a community of investors who want to acknowledge their limits then move past them. Sharing investing ideas means challenging assumptions. Removing yourself from a comfort zone can reveal ideas and strategies that broaden investment acumen.
Users can independent of location share insights that will reform your understanding of the stock market. Discover how other users apply both active and passive strategies which if employed properly, can help you find confidence with your investments.
These ideas expand as our community grows. Step back from your portfolio and renew your perspective on what’s possible and what’s holding you back. Once you learn to understand the boundaries of your thinking you can eventually change them and move beyond an ordinary return.

 

[Lucky13s]

johnnyredstorm im still learning how to put the automatic sells in place, need to learn the terminologies and what they mean, gotta look at a guide or youtube vid

I should have just sold the contract wednesday, a friend of mine with the same contractdid and shes good, as soon as the market open thursday it dropped $500, and went lower as the day progressed

Yeah, definitely read or youtube. I don't have experience with contracts / calls so I'm not 100% sure if it's the same as regular trades, but I imagine it is (or similar). If you don't mind reading, check this out:

Trading FAQs: Order Types - Fidelity

Learn about the different order types available to you via Fidelity brokerage.

www.fidelity.com

In particular, get familiar with STOPS and LIMITS.

 

[DLF]

This is why it’s so important to take targets on short term ideas. AMC should never have been something people would hold the line and blind buy and hold.

you need to always trim on trades and have a hard stop put in place to protect you. It’s better to make $1,000 and miss out on $2,000 than try to make $5,000 and lose $3,000. Scale out of the position on the way up and raise your stop as the stock is moving.

YouTube growth numbers were stupid. 46% growth, they’re pulling in like 15 billion in revs. Why the hell have I never owned Google?

Bought amc 2.20 months ago. Sold for 17 10 mins after the market opened at 19. It went down ever since. (Smokin emoji)

 

[johnnyredstorm]

Options is tougher with stops and you have to be more active as a trader there, or manage your risk upon entry and only buy what you can afford to 100% lose. But every time I enter a trade for stock, I make my purchase and immediately click the sell button and set a stop limit at the price I'm willing to exit at if I'm wrong. Typically it's $1 below my entry or, if I'm joining a trend after 10 am, it's under the low of day (I usually try and only enter a trade at this point if my stop is $2 or less). Stops get run, it sucks, but you learn to deal with it when your sizing is correct. I always use 25 shares as my starter and will only scale if there's trend developed, if there isn't I just let it rock, but the worst case is, with my hard stop set, I lose $25 if I'm wrong and it barely impacts my account.

 

[essential1]

SNDL hello there. Where have you been the last week of my life.

 

[Lucky13s]

Options is tougher with stops and you have to be more active as a trader there, or manage your risk upon entry and only buy what you can afford to 100% lose. But every time I enter a trade for stock, I make my purchase and immediately click the sell button and set a stop limit at the price I'm willing to exit at if I'm wrong. Typically it's $1 below my entry or, if I'm joining a trend after 10 am, it's under the low of day (I usually try and only enter a trade at this point if my stop is $2 or less). Stops get run, it sucks, but you learn to deal with it when your sizing is correct. I always use 25 shares as my starter and will only scale if there's trend developed, if there isn't I just let it rock, but the worst case is, with my hard stop set, I lose $25 if I'm wrong and it barely impacts my account.

And sometimes STOPS don't get executed at the price you set, right? So let's say you put a $10 STOP, but the most the next person offers to purchase is $9.80 then your stocks will sell at $9.80? Do I have that right?

 

[CrownRoyalDaddy]

I paper handed SNDL for a small profit.

sucks but good for my blood pressure

 

[1c3m4m]

And sometimes STOPS don't get executed at the price you set, right? So let's say you put a $10 STOP, but the most the next person offers to purchase is $9.80 then your stocks will sell at $9.80? Do I have that right?

yes and no

if it drops by an astronomical price sometimes the order wont go thru, happened to me plenty times, I dont know if thats a RH issue or if its like that across all brokerages

happened to me with Kodak last yr and with this amc thing last week, alot of my sell orders didnt go thru at the time and price I set it for

 

[johnnyredstorm]

Yeah if the spread is wide or the stock moves fast, slippage is a thing. TSLA isn't as likely to fill a stop as FSLY is.

Might be a little busy at work today so Idk if I'll have the time to trade, but I'm watching these set ups, doesn't mean it'll work, there's a real possibility the market just sells off today so don't fight the trend.

RDFN r/r looks decent here against 78.36, liking this through the 81.62 supply zone.
ETSY liking this through 213 for a move back to the 222 supply zone
APPS decent r/r here against 63.50, liking it through the 65.21 supply zone (EARNINGS TODAY DAY TRADE ONLY)
PLTR looks decent through 33 for a move to the 35.50 supply zone.
MDB through the all time high break.


I'm sure they squeeze off this. 132 is the upside pivot, could see this back off and fade from that level, but if it confirms it could be a runner. Don't bag hold, use a stop, take targets, understand this is not a stock for beginners.

 

[johnnyredstorm]

None of those day trade ideas are working right now, but there wasn't really a trigger so I'm waiting for a trend to develop. PINS and ETSY are my focus since I missed the MDB scalp while working.

 

[igotthatstock]

Might give up trading and take up digging ditches.

 

[Lucky13s]

Just throw 85% of your total funds into FBGRX and 15% into ARKW and don’t look at it, go on with your life without thinking about stocks. Maybe peek just a couple times a year. And in 5 years when your whole portfolio is doubled, you can send me a nice bottle of scotch.

 

[essential1]

GME just take me out my front door. Forget the moon.