ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Learning about Trading Stocks for a Living!

Updated on June 28, 2011

Long Term Chart of the Dow Industrial Average; the Dow

The Search

 

I have always been the entrepreneurial type. I knew that I would never retire from any one company. I knew I would never have a "pension." One of the problems that loomed on the horizon was that, even though I don't mind working, I couldn't work forever.

I owned a medium sized independent pharmacy in Western Michigan. It provided my family with a nice income, but didn't seem like it would be the answer to my retirement dilemma.

I tried investing in real estate and found out that I am too soft-hearted to evict people who are down on their luck. It took a few years and lots of my personal time and money to discover that.

In addition to the pharmacy, I tried a couple of other small businesses; an auto tune-up shop and a video store. They were good businesses, the kind that make good money with a good manager, but I couldn't find good managers. More wasted money and time.

I finally decided to take a look at investing in stocks. I started out by putting a few dollars a month into some popular mutual funds. This was in the early eighties before personal computers became the norm. The only way I could track their progress was to wait for quarterly reports. I was too impatient for that. I wanted to see how my money was doing. I found out that some daily newspapers would have the closing prices from the day before. I would write the prices down and chart them on graph paper. I could see that they would go up and down a lot -- generally up most of the time.

Starting To Make Sense

I began to read books about investing in the library and the local bookstores. I read everything that was available on the subject. It seemed like everything I read indicated that there seemed to be no rhyme or reason to the movement of stock and stock option and futures and commodities prices. They would go up and they would go down, apparently as a result of mysterious forces. I finally found a book that made a difference. Martin Zweig's Amazon.com: Winning On Wall Street: Books: Martin Zweig showed me that stocks were part of a larger animal, the trend. You want to own stocks when the trend is up. He also taught me that the interest rate decisions that the Fed makes were very instrumental in determining the direction of the trend. When interest rates rise the market tends to suffer. When interest rates go down the market tends to do better. Also, in the mix is the idea that the stocks of companies that make money do better than the stocks of companies that are losing money. This is all simple stuff now, but it was revolutionary at the time.

With this new knowledge in hand I gave a local stock broker some money and started picking some cheap stocks to experiment with. I would buy one or two hundred shares of a three or four dollar stock. My only criteria was that they were profitable and cheap. They are hard to find, but the information is there. It's much easier to find nowadays on just about any search engine.

My picks would usually do very well. My stock broker kept trying to change my mind, I guess it was so that he would feel he was earning his commission. The only problem was that his picks were almost always duds. About that time Charles Schwab came on the scene. Charles Schwab: Investment and Financial Management Services I moved my accounts over there. His brokers would not try to talk me out of my investing decisions -- nor would they try to talk me into using their suggestions.

Investor's Business Daily began publishing data about just about every stock there was on most of the markets. You can find them now at www.investors.com/. They even rated them against all other stocks. What a find. All I had to do was find the Friday edition and pick the best of the best of their selections, throw in a couple of my own preferences and I managed to increase the value of my holdings almost five times in just two or three years.

Keeping track of daily charts had become quite a chore. I found out that the Worden Brothers in North Carolina had a stock charting program called Telecharts that would provide complete daily stock charts for pennies a day. I jumped all over that. I have been with them for more than ten years now.TeleChart Software: Worden Brothers, Inc.

Putting It All Together

About five years ago I received a serious injury and couldn't work for over six months. I remember lying on the couch and looking at my computer. I had been experimenting with short term trading, but I hadn't really taken the plunge. Schwab had given me a copy of their new StreetSmart program. Schwab Active Trading: StreetSmart.com I decided to try it out.

I lost money the first month, broke even the second month and then never looked back. I am what is termed a swing trader. My trades generally last from one day to three or four weeks, depending on what is happening. I would like to say that I got rich quick, but that's not what happened. What has happened though, is that I can make a fairly good income doing what I enjoy.

I have learned a lot about shorter term trading from a web site at Day Trading / Online Trading - Trade The MarketsThey have a free daily update that I believe is the best thing going. I also learned a lot from John Carter's book .Amazon.com: Mastering the Trade (McGraw-Hill Trader's Edge): Books: John F. Carter.

Here is a site that I use to monitor the markets. Briefing.com: Stock Market Update. There is a fifteen or twenty minute delay in the information, but that's not a problem. I'm just looking to see how the market itself is doing, if there is some good or bad news that might be affecting the short-term trend.

Spend some time learning about the Turtle Trading Rules at www.turtletrader.com/. There is a lot of good stuff there to teach you how to keep your money where it belongs -- in your own brokerage account. They have a lot of good rules about keeping your risk under control. You don't want to become a victim of your own greed or fear.

Summary

I traded futures on stocks and commodities. I also traded stock options. When all was said and done, I enjoy trading stocks without the benefit of any derivatives. it's fairly straight forward that way. It easier to to tell what you've made or lost. It's also easier to get in or out of positions when the time comes to make a move.

If you have never traded stocks, or have been having bad luck trying to trade, I would suggest that you get the FREE DVD that's available at www.technitrader.com Just log into their web site and ask them to send it to you. It will usually get to you in less than a week from the time of your request. They teach that you should only buy stocks when they are going up -- that you should never buy one on the way down for any reason. My philosophy exactly!

All I can say for now is that I am still doing very well, thank you, doing what I love to do -- trading stocks.

* Remember, I am not giving you any trading advice. You can lose your shirt in short order, whether you get cocky or not. Always use protective stops and never risk more than you can afford to lose.

.................

Related articles:

 


Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Wonder Dog 

      6 years ago

      Over the short term price movements are random. Over the intermeciate term price movements are predicable only in a general way and have no certainty of accuracy. Over the long term we will all be dead. If past market action could predict future market action, we'd all be rich. The only approach that sometimes works requires a super computer to catch price discrepancies of the same stock trading in different markets. Find quality companies and hold for the long term. Look for good products managed by qualified people in a growing market. Buy em and hold em for as long as you can. Example: The housing market is depressed; that won't last forever.

    • Destined To Win profile image

      Destined To Win 

      8 years ago

      Great advice. Just starting out and beginning to "test the waters." Thanks so much for this most informative hub. Blessings.

    • DiamondRN profile imageAUTHOR

      Bob Diamond RPh 

      8 years ago from Charlotte, NC USA

      Shil, the MOST IMPORTANT THING you can do with any kind of trading; whether stocks, options or futures, is to put in a stop-loss so that your position will automatically sell if the price goes down too far or when you lose x-amount of dollars, etc.

      Browse this link to learn more about stop-losses > www.investopedia.com/terms/s/stop-lossorder.asp

    • Shil1978 profile image

      Shil1978 

      8 years ago

      Having traded in stocks, I can definately say its not something for the weak of heart. Thus far, I've lost more than I've gained.

      I did enter the market at the wrong time though. Perhaps, one can learn how to trade stocks, although it will always be risky.

      I am not sure if you should trade stocks for a living because of the volatility involved. Best of luck DRN though. I am sure you'd get it right. Thanks for a great hub!!

    • Daddy Paul profile image

      Daddy Paul 

      8 years ago from Michigan

      Thank you for sharing. Good read.

    • Mitch King profile image

      Mitch King 

      9 years ago from Wilsoville, OR, USA

      Great piece by a person who as done it already!! Thanks for sharing.

    • profile image

      MysteryLeo 

      9 years ago

      If you're worried about what the market is going to do, you should look at technical analysis.

      If you don't have time to do that, there are sites that do it for you like: http://www.traderbots.com/

    • profile image

      Debt Expert 

      10 years ago

      The stats are definitely in the favor of those that don't do so well in the risky "game" of the stock market these days.

    • thecounterpunch profile image

      thecounterpunch 

      10 years ago

      It's because there are 9 losers for 1 winner that it is so lucrative :)

    • Ralph Deeds profile image

      Ralph Deeds 

      10 years ago from Birmingham, Michigan

      You're in a risky and usually a "Loser's Game" (See "Winning the Loser's Game" by Chrley Ellis. Good luck, however! I enjoyed your Hub.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)