Long Term Investing VS Swing Trading VS Intraday ??

[RSDCharlie]

Guys who are into the stock market, what's your favorite method of investing?

I myself am a huge fan of Warren Buffet, and I am able to find fundamentally strong companies, and almost 90% of my money goes in long term investing. I do a bit of swing trading too, but that's more for fun by looking at the charts. I do not do intraday at all, I feel that it's more of gambling than anything. I could be wrong about intraday though.

Would love to hear opinions here. Which method do each of you follow and why?

 

[Bible_Belt]

Intraday trading done correctly requires a substantial investment in hardware, internet connection, and data feed. The average guy should avoid it. Anyone day trading through an app on their phone is an idiot.

 

[BackInTheGame78]

Intraday trading done correctly requires a substantial investment in hardware, internet connection, and data feed. The average guy should avoid it. Anyone day trading through an app on their phone is an idiot.

This is patiently wrong.

Futures day trading requires none of that.

 

[Bible_Belt]

This is patiently wrong.

Futures day trading requires none of that.

I was talking about securities. I have honestly never traded futures. But I would be surprised if some cheap phone app that pretends to be low or free commission is not screwing you a tiny bit each time they fill an order. And good luck getting a fill when the market is going quickly against you. It's in the terms of service agreement that they can ignore your order during "volatile market conditions."

There's a class action suit against Robin Hood, because they weren't actually filling anyone's orders. People who use an app like that are virtually guaranteed to lose money, so they just tell you the position is real and when you close it at a loss, they keep your loss for themselves. This scam has been around since the Internet brokers of the late 90s, when they called it being a "liquidity partner." Robin Hood got caught when Netflix went crazy. The people who thought they had some very profitable options positions were never allowed to withdraw their money, because it was never real in the first place.

 

[BackInTheGame78]

I was talking about securities. I have honestly never traded futures. But I would be surprised if some cheap phone app that pretends to be low or free commission is not screwing you a tiny bit each time they fill an order. And good luck getting a fill when the market is going quickly against you. It's in the terms of service agreement that they can ignore your order during "volatile market conditions."

There's a class action suit against Robin Hood, because they weren't actually filling anyone's orders. People who use an app like that are virtually guaranteed to lose money, so they just tell you the position is real and when you close it at a loss, they keep your loss for themselves. This scam has been around since the Internet brokers of the late 90s, when they called it being a "liquidity partner." Robin Hood got caught when Netflix went crazy. The people who thought they had some very profitable options positions were never allowed to withdraw their money, because it was never real in the first place.

Anyone that trades during volatile times deserves whatever happens. One of the first things you learn is don't trade during major news/results/earnings coming out for exactly that reason...you'll get your stops blown thru if it goes against you and get wrecked.

I don't ever trade on my phone but I would tend to agree that isn't going to be a smart long term way of making money.

People using RobinHood aren't actually serious investors, just people doing it as a hobby. Nobody who is serious would ever use one of those types of places.

 

[Reincarnated]

Quite literally 99% of people should stick to piling funds away in tax-advantaged retirement vehicles until they've maxed them all out. The other 1% can dabble in more advanced trading/investing. Doesn't have to be quite as dry as buying a couple large cap indexes, my preferences recently have favored emerging market equities, high-yield corporate bonds, and even more recently lower grade municipal debt.

Unless you are willing to invest a large amount of your most important asset (time), swing trading and intraday shouldn't even cross your mind.

 

[RSDCharlie]

Quite literally 99% of people should stick to piling funds away in tax-advantaged retirement vehicles until they've maxed them all out. The other 1% can dabble in more advanced trading/investing. Doesn't have to be quite as dry as buying a couple large cap indexes, my preferences recently have favored emerging market equities, high-yield corporate bonds, and even more recently lower grade municipal debt.

Unless you are willing to invest a large amount of your most important asset (time), swing trading and intraday shouldn't even cross your mind.

What if a person doesn't wanna wait till retirement and wants financial freedom in let's say 10 years? Retirement fund is OK, but highly restrictive.

 

[FlirtLife]

What if a person doesn't wanna wait till retirement and wants financial freedom in let's say 10 years? Retirement fund is OK, but highly restrictive.

Roth IRAs offer that flexibility - any money you put in, you can take out without penalty (but not the growth).
If your company matches contributions, make sure you get the entire match.

Most people's individual stock picks will trail the market. If you must pick stocks, track your performance against the S&P 500 as a benchmark. If you can't beat the market, join it. Buy index funds instead, which track the entire market.

As you approach retirement, consider a higher allocation to bonds. In case you're not aware of it, a traditional retirement portfolio is 60% stocks and 40% bonds. When you have enough to retire, your goal is to stay retired - which means lowering the risk of loss in your portfolio.

Do you have an emergency fund to handle unexpected expenses?
Are you saving a fraction of your salary for retirement?

 

[RSDCharlie]

Roth IRAs offer that flexibility - any money you put in, you can take out without penalty (but not the growth).
If your company matches contributions, make sure you get the entire match.

Most people's individual stock picks will trail the market. If you must pick stocks, track your performance against the S&P 500 as a benchmark. If you can't beat the market, join it. Buy index funds instead, which track the entire market.

As you approach retirement, consider a higher allocation to bonds. In case you're not aware of it, a traditional retirement portfolio is 60% stocks and 40% bonds. When you have enough to retire, your goal is to stay retired - which means lowering the risk of loss in your portfolio.

Do you have an emergency fund to handle unexpected expenses?
Are you saving a fraction of your salary for retirement?

Ofcourse I have emergency funds to handle expenses. I always keep some savings in my bank account.

Fraction of my salary goes for SIP every month towards fundamentally strong stocks and ETF's. That's going to continue for a while, unless something unexpected happens. But even in an emergency, I'm free to withdraw money from those investments. Unlike IRA's , there is no penalty on withdrawing your money from stocks and ETF's. I think penalty in IRA's are about 10% in case of early withdrawal, correct me if I'm wrong.

 

[RSDCharlie]

I was talking about securities. I have honestly never traded futures. But I would be surprised if some cheap phone app that pretends to be low or free commission is not screwing you a tiny bit each time they fill an order. And good luck getting a fill when the market is going quickly against you. It's in the terms of service agreement that they can ignore your order during "volatile market conditions."

There's a class action suit against Robin Hood, because they weren't actually filling anyone's orders. People who use an app like that are virtually guaranteed to lose money, so they just tell you the position is real and when you close it at a loss, they keep your loss for themselves. This scam has been around since the Internet brokers of the late 90s, when they called it being a "liquidity partner." Robin Hood got caught when Netflix went crazy. The people who thought they had some very profitable options positions were never allowed to withdraw their money, because it was never real in the first place.

I would never trust Robin hood after the Game stop scandal. It's clear that their app is dishonest. People can do basic research using YouTube for better alternatives to Robin hood. Its like the most basic rule of stock market "Just because something is famous, doesn't mean it's better".

 

[BackInTheGame78]

Quite literally 99% of people should stick to piling funds away in tax-advantaged retirement vehicles until they've maxed them all out. The other 1% can dabble in more advanced trading/investing. Doesn't have to be quite as dry as buying a couple large cap indexes, my preferences recently have favored emerging market equities, high-yield corporate bonds, and even more recently lower grade municipal debt.

Unless you are willing to invest a large amount of your most important asset (time), swing trading and intraday shouldn't even cross your mind.

Intraday is by far the fastest way to make money if you are disciplined and willing to put in the work over time.

The reason why so many fail is because very few people are willing to do that because it takes years of hard work every day with little to show for it until you become really good and then you go from nothing to a hell of a lot of money almost overnight once that switch flips

 

[FlirtLife]

Ofcourse I have emergency funds to handle expenses. I always keep some savings in my bank account.

Fraction of my salary goes for SIP every month towards fundamentally strong stocks and ETF's. That's going to continue for a while, unless something unexpected happens. But even in an emergency, I'm free to withdraw money from those investments. Unlike IRA's , there is no penalty on withdrawing your money from stocks and ETF's. I think penalty in IRA's are about 10% in case of early withdrawal, correct me if I'm wrong.

I said "Roth IRAs offer that flexibility" [1], not IRAs in general. Roth IRAs are funded with money that has already been taxed, and you can remove it without being taxed. Any gains above the contributions need to wait for retirement (or pay 10% penalty). I think you need to learn the difference between Traditional IRAs and Roth IRAs.

Does your company offer an "employer match" for contributions to their 401(k) or retirement plan?
Perhaps I put too much in one message, but that is free money (if it exists), so make sure to check.


[1]

Roth IRAs offer that flexibility - any money you put in, you can take out without penalty (but not the growth).
If your company matches contributions, make sure you get the entire match.

Most people's individual stock picks will trail the market. If you must pick stocks, track your performance against the S&P 500 as a benchmark. If you can't beat the market, join it. Buy index funds instead, which track the entire market.

As you approach retirement, consider a higher allocation to bonds. In case you're not aware of it, a traditional retirement portfolio is 60% stocks and 40% bonds. When you have enough to retire, your goal is to stay retired - which means lowering the risk of loss in your portfolio.

Do you have an emergency fund to handle unexpected expenses?
Are you saving a fraction of your salary for retirement?

 

[FlirtLife]

Intraday is by far the fastest way to make money if you are disciplined and willing to put in the work over time.

The reason why so many fail is because very few people are willing to do that because it takes years of hard work every day with little to show for it until you become really good and then you go from nothing to a hell of a lot of money almost overnight once that switch flips

You mention "years of hard work", but I thought you started a prop trading account months ago.

From what I read, prop trading gives accounts without real money where you can't withdraw until you go through numerous hoops. Which means you do not have a profit until you are allowed to withdraw money to your own personal account(s).

 

[BackInTheGame78]

You mention "years of hard work", but I thought you started a prop trading account months ago.

From what I read, prop trading gives accounts without real money where you can't withdraw until you go through numerous hoops. Which means you do not have a profit until you are allowed to withdraw money to your own personal account(s).

Prop trading yes but I spent significant time on the charts with crypto a few years ago, took a break for a bit and then resumed with forex and prop firms.

Prop firms "can" have a bunch of hoops depending on which one you choose.

I started with Apex but left them exactly for that reason. They put lots of hoops and conditions on getting paid that frankly didn't make much sense other than for simply creating reasons for denying payouts to people.

TopStep has been great all the way around for me so far. No real restrictions, you simply pass an eval, get your funded account and have 5 days with $200 or more in profit and you can withdraw at any time after that.

Once you withdraw, you again need 5 days with over $200 profit before your next withdrawal.

So I guess that would be the "restriction" but that's not really much of an issue if you are using proper risk management.

Also figured out that the $50K accounts are the "sweet spot" in prop firms usually because you only are required to make 1.5 times the amount you are able to lose(or make 3K before losing 2K) versus the 100K account where you need to make 2x the amount you can lose(ie, make 6K before losing 3K).

 

[Reincarnated]

What if a person doesn't wanna wait till retirement and wants financial freedom in let's say 10 years? Retirement fund is OK, but highly restrictive.

I think you have to look at retirement funds as a piece of the freedom puzzle, but not the whole puzzle. Having a solid base socked away at a young age allows you the flexibility to pursue other goals at an earlier age.

 

[jaygreenb]

What if a person doesn't wanna wait till retirement and wants financial freedom in let's say 10 years? Retirement fund is OK, but highly restrictive.

If this is your goal, focus on dramatically increasing your income and savings rate. Not sure where you are now but in order to have a chance of achieving something like this in that time frame, you need a high income and expenses low enough you are saving/investing 40%+ at least