Once again I will tell you something from my million dollar education. The difference in technology between 1980’s and 2000’s are amazing. In the 1980’s when I was submitting an order to a brokerage firm via my computer, it would be combined with other orders and almost manually make it to the floor of the NYSE. All this with a 9600 baud modem and paying all kinds of money for this privilege. Today, I can sit at home with multiple screens, and almost see what the traders are thinking. I see every transaction, every tick or down. And I can press one button and buy thousands of shares in a click. I can buy a stock at 9:30 sell by 10:31, sell a stock at 11:30 and buy it back at 12:00. In a day as amateur, I have done 10 major trades made 1% on my money, and survived to fight another day.
And if I could do this everyday great it would be great, but honestly my heart can’t take it. Let me tell you the bad side, I would wake at 7am and research the foreign markets and news of the day to be ready for the 9:30am open. Hours of researching information and setting my mind in attack mode. I drink my coffee waiting for 9:30 listening to squawk box.
Then I have to decide if it is it a good day to come in or not, I watch the action looking to form an opinion. Is it going to be an up or down morning. I want to follow the bigger trend, then I see a stock I follow going up. I buy it. I am watching. I buy more . At this point I have a ton of money on it. I can’t even go to the bathroom. I see it go up and down within its range. I sneak to the rest room for a second and rush back. As lunch approaches, I am trying to figure out should I hold till lunch, chances are it will go down or not go up over lunch, since everyone like me are going to dump the stock to go to lunch, or are we going to eat at our desk today. This goes on till about 3pm when we all know to dump everything that we don’t want to own over night. On Friday, we really dump it, a terrorist action, or some speech could kill your stock, better take your profit and run…
My last point on this is this, this type of investing is work, and it is also a lousy way for a rich person to earn a living. My stress level was out of control, not worth the money. I think an assassins jobs is less stressful. There is a big difference when you do it for your own money and not someone else.
By the way, I averaged about 6 to 8% on money invested per month. Of course not on all of it because I didn’t want to risk all. Remember preservation of capital is the most important thing to a day trader. If you lose your money, game over.
Does this still sound like a safe way to save money for retirement? Oh, but my million dollar education keeps getting bigger.