The Stock Market

[zorro1]

LOL badge doesnt want to talk and Arbrak thinks its wrong to discuss stock on a stock thread. Leave you guys to it, this thread way to HI-SO for lil ol me

Actually I don't think it is wrong to discuss stocks but this is a 'stockmarket' thread rather than a stock thread.

Really I just think they should be separate threads. More importantly I don't see the relevance of posting your historic positions and dealings. A stock thread should be about what you think you should be buying or selling now. As a final thought I am not entirely convinced that anyone is even interested in that. flying once accused me of not giving any investment ideas, so I did post a couple on a different thread. They were stocks that both went up and I reiterated buying them. One has risen 4 fold in 4 months since I mentioned it. But nobody was either interested or even paid attention. btw it doesnt bother me, my whole point to Flying at the time is that they would mean nothing to anyone and would be of no interest. So in even a stock thread I don't really think people are interested in other peoples ideas, they are certainly not interested in their current positions, historic dealings and it hardly seems likely that anyone has the vaguest interest in individual Aussie penny stocks in a stockmarket thread.

You always have a slight logical disconnect between daily movements of the Dow and the fact that you only trade penny stocks.

"I don't see the relevance of posting your historic positions and dealings".

Well maybe my analysis of history and yours vary somewhat. the minute a position is declared it becomes historic

"hardly seems likely that anyone has the vaguest interest in individual Aussie penny stocks in a stockmarket thread."

Abrak Im nearly speechless, an extremely arrogant comment. The last rally produced for me a number of multibaggers. perhaps scalping a few hundred dollars on blue chip stock here and there is more your style. I respect that. Each to their own, both have a place

Edited July 9, 2010 by zorro1

[nakachalet]

we are now on page 112.... and there will be plenty more to come....

there are many talented traders here as you can see the number of pages generated by rather very interesting discussion and dissuasion between and among avid traders....

some trade simulated mode, some trade for real money, some trade one contract, and a few special other trade contracts in multiple of ten or more.... at one time....

many traders, both short and longer terms traders, like to discuss their positions and rationals behind their trades which are immensely informative for other less-opportunity and/or less skillful traders....

to read, formulate and incorporate those ideas and trading techniques into their own trading systems, if they so wish....

but alah.... there are also a small distinctive group of traders who would like to challenge those already traded positions and trading ideas and techniques.... well, this is all well and democratic of course.....

but what i wonder most every time that i visit these pages is.... why are we spending so much time arguing, challenging, persuading, dissuading et cetera.... won't it be much more beneficial for every trader to learn from one another....?

there are plenty of opportunities for everyone to make some money in the markets.... and there is always a better trade down the road.... if we survive the trade makers and the specialists' brilliancy in taking every dollar and penny from everyone of us.... if we ever become overconfident....

come on trader friends.... let's spend our time here more constructively with encouraging words and sympathetic ears when needed.... that imho is how a community of traders like us can outgrow ourselves and become even more profitable.... geeweez..... who do i think i am.... ?.....

have another profitable trading session, everyone.....:jap:

Edited July 9, 2010 by nakachalet

[badge]

"hardly seems likely that anyone has the vaguest interest in individual Aussie penny stocks in a stockmarket thread."

Abrak Im nearly speechless, an extremely arrogant comment. The last rally produced for me a number of multibaggers. perhaps scalping a few hundred dollars on blue chip stock here and there is more your style. I respect that. Each to their own, both have a place

Well lets have a quick poll?

Im with Ab'ers;

Aussie penny shares(any penny shares) dont interest me in the slightest.

[Parvis]

"hardly seems likely that anyone has the vaguest interest in individual Aussie penny stocks in a stockmarket thread."

Abrak Im nearly speechless, an extremely arrogant comment. The last rally produced for me a number of multibaggers. perhaps scalping a few hundred dollars on blue chip stock here and there is more your style. I respect that. Each to their own, both have a place

Well lets have a quick poll?

Im with Ab'ers;

Aussie penny shares(any penny shares) dont interest me in the slightest.

Actually METHODS are of much more interest to me - than specific positions - especially not pennystocks.

It still needs to be confirmed by early Friday action (and Badge will sure "jump" on me - if early actions will not confirm) - but - I am seeing signs of an early upmove with futures in the US - followed by a severe downturn - which MAY end at the previous bottom.

Edited July 9, 2010 by Parvis

[Abrak]

Abrak Im nearly speechless, an extremely arrogant comment. The last rally produced for me a number of multibaggers. perhaps scalping a few hundred dollars on blue chip stock here and there is more your style. I respect that. Each to their own, both have a place

Zorro,

Now you are getting all excitable and chippy. Even if I did prefer scalping a few hundred dollars on blue chips, I dont think it is relevant to post all my positions here - I dont think people will be interested.

My point is this is essentially a 'macro' thread that discusses stockmarkets. So your views on where the market is going is relevant as is anyones views be they fundamental technical political or voodoo.

I dont think it is the right place to discuss australian pennies, Mexican property stocks, Chinese financials, Canadian OTC miners or BP for that matter. And Zorro, arent you the one being arrogant? Arent you simply assuming that people on this thread are interested in Australian penny stocks because you invest in them? Most of the contributors on this thread tend to trade derivatives from what I can tell in any case.

[zorro1]

Abrak Im nearly speechless, an extremely arrogant comment. The last rally produced for me a number of multibaggers. perhaps scalping a few hundred dollars on blue chip stock here and there is more your style. I respect that. Each to their own, both have a place

Zorro,

Now you are getting all excitable and chippy. Even if I did prefer scalping a few hundred dollars on blue chips, I dont think it is relevant to post all my positions here - I dont think people will be interested.

My point is this is essentially a 'macro' thread that discusses stockmarkets. So your views on where the market is going is relevant as is anyones views be they fundamental technical political or voodoo.

I dont think it is the right place to discuss australian pennies, Mexican property stocks, Chinese financials, Canadian OTC miners or BP for that matter. And Zorro, arent you the one being arrogant? Arent you simply assuming that people on this thread are interested in Australian penny stocks because you invest in them? Most of the contributors on this thread tend to trade derivatives from what I can tell in any case.

Abrak

Excitable and chippy? you sound very Gay lol

"I dont think people will be interested."

Im interested big boy, Lay em down lets have a look I cant imagine your shy..

"Arent you simply assuming that people on this thread are interested in Australian penny stocks because you invest in them?"

Well I had system of sourcing fundamentally sound stock that were down by 80% through no fault of their own during GFC.

Further more

they had to have just completed a cap raise. Entry was just below CR s/p. I shared some of those here because its a stock forum and its great to share. Those that followed would have had several multi Baggers.

Abrak if you think this forum is not for everyone then your arrogance is supreme. Astonishing you feel comfortable saying what you just have.

Thanks for your ruling on the forum however I will continue to post Ozzie pennies. If oz or mexican stock as you stated offend you then I believe there is an ignore button.

p.s dont underestimate the mexicans, bet you never saw the greeks coming

regards

totally astonished.

Edited July 9, 2010 by zorro1

[Parvis]

Zorro - Abrak has a very valid point - this Thread is called "StockMarket" and not "PennyStocks". Just PROOF to him how valid your points are and start your own Thread and perhaps you will be TOTALLY ASTONISHED how successfull your thread will become.

Edited July 9, 2010 by Parvis

[ray23]

Well I started a thread about trading Thai Stocks, I have to say not much interest. Abrak, was very helpful to me. ( showed me a simple way to chart a stock) Not in telling what to buy. But the strategies he uses.

I think part of the problem is we more or less at different levels not only in funding. But, in experience as well. 90 days into this I'm just learning the language, few feel like running a training thread.

A thread like this has wealth of information and good amount of debate. Now me I don't understand the debate yet, to others it seems like it's very clear.

Can a thread be started to exchange useful idea's, frankly it would surprise me.

[zorro1]

This one I bought just recently. T/A looks good

SVL

Based upon the information the Company has released to date and the recent injection of serious funds, I would expect a solid 6-12mths of continual revaluation as they increase their High Grade Silver resource and move into an early start up.

Chart looks looks like SVL will break hard to the upside with trend reversal and bollinger squeeze, stochcastic turning up with plenty of room in the channel.

Its highly illiquid however fundamentally sound ,cashed up. IMO there is a 30% short term gain here. You wont get that with BHP so only for Risk investors. DYOR this is my opinion only.

P.S

Would be nice to see what some of the more "sophisticated investors" are doing. Im open to learning whatever I can and sure there are many others. Even Midas may dip his toe in

Edited July 9, 2010 by zorro1

[Parvis]

Well I started a thread about trading Thai Stocks, I have to say not much interest. Abrak, was very helpful to me. ( showed me a simple way to chart a stock) Not in telling what to buy. But the strategies he uses.

I think part of the problem is we more or less at different levels not only in funding. But, in experience as well. 90 days into this I'm just learning the language, few feel like running a training thread.

A thread like this has wealth of information and good amount of debate. Now me I don't understand the debate yet, to others it seems like it's very clear.

Can a thread be started to exchange useful idea's, frankly it would surprise me.

I believe you are voicing what many posters may feel. There is too much BS on this thread. I believe the exchange of ideas about trading can be useful from beginners to experts.

A suggestion to Zorro: Learn how to create meaningful charts.

Edited July 9, 2010 by Parvis

[Abrak]

Look Zorro,

I dont add much to this particular thread, however I do appreciate it. You are entitled to post what you want. If you happen to believe that you have a following and interest in Australian penny stocks then really all I asked was that you start a new thread.

My only concern is that if this turns into a stock discussion thread, then I believe that several people who dont even deal in stocks will lose interest. I appreciate your thoughts on the stockmarket (but, just dont think Australian penny stocks are relevant.) If you dont see that on this particular subject you are having a one way conversation, you might be a bit delusional. You are hardly discussing them with anyone.

And again you say 'those who followed' now that is arrogance, not me stating that nobody is interested. And please Zorro, we all know what sort of size you deal in because you have told us and you are essentially a penny investor in penny stocks, so you are very over excitable in my view.

And all I ASK is that you try to keep this thread focused.

Edited July 9, 2010 by Abrak

[zorro1]

Zorro - Abrak has a very valid point - this Thread is called "StockMarket" and not "PennyStocks". Just PROOF to him how valid your points are and start your own Thread and perhaps you will be TOTALLY ASTONISHED how successfull your thread will become.

Parvis.

this Thread is called "StockMarket" and not "PennyStocks"

So we should talk about what? What is stockmarket, Please give your evaluation and why you think penny stock should be excluded. maybe re read what you just posted and perhaps make more sense of it

cheers

p.s

"start your own Thread"

errm pretty basic research your lacking....I did start THIS THREAD called STOCKMARKET

[zorro1]

double post

Edited July 9, 2010 by zorro1

[Parvis]

Zorro - Abrak has a very valid point - this Thread is called "StockMarket" and not "PennyStocks". Just PROOF to him how valid your points are and start your own Thread and perhaps you will be TOTALLY ASTONISHED how successfull your thread will become.

Parvis.

this Thread is called "StockMarket" and not "PennyStocks"

So we should talk about what? What is stockmarket, Please give your evaluation and why you think penny stock should be excluded. maybe re read what you just posted and perhaps make more sense of it

cheers

p.s

"start your own Thread"

errm pretty basic research your lacking....I did start THIS THREAD called STOCKMARKET

I see - you just miss-labelled it.

Perhaps somone with more solid foundation in reality than Zorro - like Abrak for instance - should start a thread called Trading.

Edited July 9, 2010 by Parvis

[BlackJack]

The BOI says Thailands in great shape and getting better except for some street fires recently.

Is anyone trading Thai stocks or am I in the wrong forum.

I bought into ASX KCN Kingsgate (Thailand gold mine) recently and they have a Thai sub that may do well when they have their IPO

I had a lot of KCN at $2.50..sold out way to early but 30%-40% gains to good to walk away from. Nobody talks stock much here. Super traders always win without disclosure. I did talk about and posted my holdings and what I paid for them, there halfway in the thread somewhere. No one else did though

zorro1

with all due respect....

what you said is just not true.... this attached summary has also been posted a week or so ago..... for the month of june 2010....

and i again agree with you wholeheartedly that more traders, if and when they have some unengaged time.... should post some of their trades....

and i believe only a handful would be willing to post their month end summary.... for one reason or another....

it is just humanly virtually impossible to have winning trades every session.... imho....

just do not let your irrational emotion overrides your trading plans.... cheers everyone.... :jap:

To be honest, I cant think of a single person, other than maybe your wife, who would be interested in your open positions at the end of June. If you are looking for investment advice, I dont think this is the best place to come.

P.S. Although as you have started I would like to see your latest bank account statements.

BIS gold swaps

http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=107700&sn=Detail&pid=92730

[zorro1]

Abrak

"we all know what sort of size you deal in because you have told us"

I have posted here how many $$$ I buy in at one time is that what your referring to? Look it up and paste it if you like, nothing to hide here. What diff is it if we invest 30k in a 2c stock or by 2000 BHP?

Are you suggesting that Punters are not allowed here? Abrak your 3 million dollar trading account is as relative as a school teachers 1k beer money account. We are all the same here relativley, SHAME on you!

Abrak your confusing me and Im sure others. The thread I started is about the stockmarket Coming to a stockmarket forum to discuss any shares blue chip or micro cap is totally within a persons rights.

[zorro1]

Zorro - Abrak has a very valid point - this Thread is called "StockMarket" and not "PennyStocks". Just PROOF to him how valid your points are and start your own Thread and perhaps you will be TOTALLY ASTONISHED how successfull your thread will become.

Parvis.

this Thread is called "StockMarket" and not "PennyStocks"

So we should talk about what? What is stockmarket, Please give your evaluation and why you think penny stock should be excluded. maybe re read what you just posted and perhaps make more sense of it

cheers

p.s

"start your own Thread"

errm pretty basic research your lacking....I did start THIS THREAD called STOCKMARKET

I see - you just miss-labelled it.

Perhaps somone with more solid foundation in reality than Zorro - like Abrak for instance - should start a thread called Trading.

hey bud why dont you start something , this one is going strong with a lot of info , its a good thread trying to be moderated by people like you. The thread I started is about the stockmarket Coming to a stockmarket forum to discuss any shares blue chip or micro cap is totally within a persons rights.

Now , its beer oclock. A great weekend to you all both the "sophs" and the punters good luck with your choice of trading :jap:

[zorro1]

Well I started a thread about trading Thai Stocks, I have to say not much interest. Abrak, was very helpful to me. ( showed me a simple way to chart a stock) Not in telling what to buy. But the strategies he uses.

I think part of the problem is we more or less at different levels not only in funding. But, in experience as well. 90 days into this I'm just learning the language, few feel like running a training thread.

A thread like this has wealth of information and good amount of debate. Now me I don't understand the debate yet, to others it seems like it's very clear.

Can a thread be started to exchange useful idea's, frankly it would surprise me.

I believe you are voicing what many posters may feel. There is too much BS on this thread. I believe the exchange of ideas about trading can be useful from beginners to experts.

A suggestion to Zorro: Learn how to create meaningful charts.

Parvis i missed your post.

The chart is a basic spotters chart which I follow up on using higher definition via trading platform. I post that chart as its easy to read. What is it in that chart that you dont understand Parvis? yellow triangle confirms start of an up trend and green triangle confirms it , bollingers are squeezed with the s/p forcing top bollinger up but still within. stochastic and mac d both turning up. Keep in mind Im not looking to create a day trade chart for BHP. Im looking for a swing trade and breakout for a 20-30% gain on limited info on a 9c stock.it may take a week. I have posted others here BEFORE they BROKE OUT. I will find them over the weekend. I think it was VIL.

Whats your problem Parvis? Whats wrong with posting a basic chart

Tell you what why dont you have a look via your chart system and tell me why SVL is not a buy, that would be easier .

[lannarebirth]

Well I started a thread about trading Thai Stocks, I have to say not much interest. Abrak, was very helpful to me. ( showed me a simple way to chart a stock) Not in telling what to buy. But the strategies he uses.

I think part of the problem is we more or less at different levels not only in funding. But, in experience as well. 90 days into this I'm just learning the language, few feel like running a training thread.

A thread like this has wealth of information and good amount of debate. Now me I don't understand the debate yet, to others it seems like it's very clear.

Can a thread be started to exchange useful idea's, frankly it would surprise me.

I believe you are voicing what many posters may feel. There is too much BS on this thread. I believe the exchange of ideas about trading can be useful from beginners to experts.

A suggestion to Zorro: Learn how to create meaningful charts.

Parvis i missed your post.

The chart is a basic spotters chart which I follow up on using higher definition via trading platform. I post that chart as its easy to read. What is it in that chart that you dont understand Parvis? yellow triangle confirms start of an up trend and green triangle confirms it , bollingers are squeezed with the s/p forcing top bollinger up but still within. stochastic and mac d both turning up. Keep in mind Im not looking to create a day trade chart for BHP. Im looking for a swing trade and breakout for a 20-30% gain on limited info on a 9c stock.it may take a week. I have posted others here BEFORE they BROKE OUT. I will find them over the weekend. I think it was VIL.

Whats your problem Parvis? Whats wrong with posting a basic chart

Tell you what why dont you have a look via your chart system and tell me why SVL is not a buy, that would be easier .

This is what I'd say is wrong with the chart, for my use anyway. Your off chart studies take up more screen space than does the price chart, which to me trumps all studies. While I understand with a penny stock a price move of a penny or two is huge in percentage terms, it still looks like basically a flatline as presented. I'd work on the scaling so that you can see movement with a casual glance and not have to squint. If your chart provider allows for "on screen" studies you may be able to get more information with a single glance. Also you may want to review the inputs for each of your studies. I think you'll find several have similar inputs, which will give you similar signals. Better IMO to use dissimilar inputs which if all give a buy signal, it proves more reliable. I can't get my screen capture gizmo to show my whole setup but I'll show you what I mean using some of the charts on my screen Very ST buy signal at 1515 yesterday using three different methodologies.

Edited July 9, 2010 by lannarebirth

[Parvis]

Yes Lanna - these charts are much better and actually usable. Checking my own charts to see if I had the same signal yesterday. I had a buy signal at 14:15 yesterday (1 hr and 45 min before the close).

I use mostly 9 day line charts (5min interval) - like you - also of different parameters to confirm the signal. My original buy signal, on this recent move, I had on 7-06 at 15:15 (45 min before close) - which I exitted yesterday at 10:25 am (1hr after opening). I think you are probably aware of the gains of a 440 point move on the DOW.

I did not reenter yesterday.

This is the type of discussion of methodology, construction of charts etc. etc. that I find useful - I should ofcourse also show my charts - but I am inclined to take Zorros recent suggestion.

Edited July 9, 2010 by Parvis

[zorro1]

Well I started a thread about trading Thai Stocks, I have to say not much interest. Abrak, was very helpful to me. ( showed me a simple way to chart a stock) Not in telling what to buy. But the strategies he uses.

I think part of the problem is we more or less at different levels not only in funding. But, in experience as well. 90 days into this I'm just learning the language, few feel like running a training thread.

A thread like this has wealth of information and good amount of debate. Now me I don't understand the debate yet, to others it seems like it's very clear.

Can a thread be started to exchange useful idea's, frankly it would surprise me.

I believe you are voicing what many posters may feel. There is too much BS on this thread. I believe the exchange of ideas about trading can be useful from beginners to experts.

A suggestion to Zorro: Learn how to create meaningful charts.

Parvis i missed your post.

The chart is a basic spotters chart which I follow up on using higher definition via trading platform. I post that chart as its easy to read. What is it in that chart that you dont understand Parvis? yellow triangle confirms start of an up trend and green triangle confirms it , bollingers are squeezed with the s/p forcing top bollinger up but still within. stochastic and mac d both turning up. Keep in mind Im not looking to create a day trade chart for BHP. Im looking for a swing trade and breakout for a 20-30% gain on limited info on a 9c stock.it may take a week. I have posted others here BEFORE they BROKE OUT. I will find them over the weekend. I think it was VIL.

Whats your problem Parvis? Whats wrong with posting a basic chart

Tell you what why dont you have a look via your chart system and tell me why SVL is not a buy, that would be easier .

This is what I'd say is wrong with the chart, for my use anyway. Your off chart studies take up more screen space than does the price chart, which to me trumps all studies. While I understand with a penny stock a price move of a penny or two is huge in percentage terms, it still looks like basically a flatline as presented. I'd work on the scaling so that you can see movement with a casual glance and not have to squint. If your chart provider allows for "on screen" studies you may be able to get more information with a single glance. Also you may want to review the inputs for each of your studies. I think you'll find several have similar inputs, which will give you similar signals. Better IMO to use dissimilar inputs which if all give a buy signal, it proves more reliable. I can't get my screen capture gizmo to show my whole setup but I'll show you what I mean using some of the charts on my screen Very ST buy signal at 1515 yesterday using three different methodologies.

Thanks very much lana. Im no chartists like you and appreciate your input. The chart I post is simply a buy alert. I do however follow through on my trading platform for a clearer picture. Can you further advise me (only opinion of course) over the next week or so as to which way you see this one heading? By the way i did buy yesterday. What Im looking for is a swing trade perhaps you can give me your thoughts during next week. what do you mean by this "Better IMO to use dissimilar inputs which if all give a buy signal,"

Thanks for the effort Im sure many that dont post here but read and most investors in general find charting a mystery

edit from memory your in the states so you cant help, the charting system only identifies trend reversals which is all I need to see for further investigation. I will post a bhp chart ,and my thoughts maybe you can help with input

Edited July 9, 2010 by zorro1

[Abrak]

Ok Zorro, I apologise. I genuinely thought that noone was interested in Australian pennies but I was wrong. Or at least wrong to the extent, that I thought they werent happy to advise you on them. I was more worried about the likes of Badge, Parvis and Lanna losing interest because it went off topic and was about 'shares' which I dont imagine they deal in much.

I was more concerned that bringing individual stocks into the thread would kill it. Obviously while people are getting good input that is fine. Conceptually I would still like to differentiate between 'stockmarkets' and 'shares' but that is that.

[lannarebirth]

Ok Zorro, I apologise. I genuinely thought that noone was interested in Australian pennies but I was wrong. Or at least wrong to the extent, that I thought they werent happy to advise you on them. I was more worried about the likes of Badge, Parvis and Lanna losing interest because it went off topic and was about 'shares' which I dont imagine they deal in much.

I was more concerned that bringing individual stocks into the thread would kill it. Obviously while people are getting good input that is fine. Conceptually I would still like to differentiate between 'stockmarkets' and 'shares' but that is that.

I don't trade "shares", except leveraged ETF's sometimes, and I don't trade Australian stocks, and I don't trade pennies, but I like to see a chart that tells me something in a glance. 20% moves should not look like a flatline, it should be running out the top of the page if its a relatively ST chart. I think there should probably be a separate thread for the consideration of individual stocks. Gold pennies in Australia is a niche trade of a small sector in a minor market as far as I'm concerned. With so many asset classes being correlated now I still like looking at the broader view for trend. If you get that part right the rest will follow.

[Parvis]

I think any legitimate trader will sooner or later realize that there is more serious money to be made in Derivatives than in Stocks. The idea that derivatives are "riskier" methods than stocks is just totally false. However, derivative trading takes significantly more work to study and understand the particular Market.

Edited July 9, 2010 by Parvis

[zorro1]

Ok Zorro, I apologise. I genuinely thought that noone was interested in Australian pennies but I was wrong. Or at least wrong to the extent, that I thought they werent happy to advise you on them. I was more worried about the likes of Badge, Parvis and Lanna losing interest because it went off topic and was about 'shares' which I dont imagine they deal in much.

I was more concerned that bringing individual stocks into the thread would kill it. Obviously while people are getting good input that is fine. Conceptually I would still like to differentiate between 'stockmarkets' and 'shares' but that is that.

Abrak apology accepted and have no interest in turning thread into penny dreadful, any type of 'trade"

except beads and shells should be allowed

[Abrak]

I think any legitimate trader will sooner or later realize that there is more serious money to be made in Derivatives than in Stocks. The idea that derivatives are "riskier" methods than stocks is just totally false. However, derivative trading takes significantly more work to study and understand the particular Market.

Very true on every point. of course I could use derivates to reduce risks. but conceptually I believe you can get equity returns for less risk with derivative. However derivatives add risk and destroy value in aggregate. What they actually do.is increase risk and destroy value from existing capital to derivatives. So the legitimate trader will sooner or later work out that there is more money in derivates than equity because he is essentially destroying the value of equity or debt.

Could be worth a separate thread. But essentially the value creation does not appear out of nowhere.

[Parvis]

I think any legitimate trader will sooner or later realize that there is more serious money to be made in Derivatives than in Stocks. The idea that derivatives are "riskier" methods than stocks is just totally false. However, derivative trading takes significantly more work to study and understand the particular Market.

Very true on every point. of course I could use derivates to reduce risks. but conceptually I believe you can get equity returns for less risk with derivative. However derivatives add risk and destroy value in aggregate. What they actually do.is increase risk and destroy value from existing capital to derivatives. So the legitimate trader will sooner or later work out that there is more money in derivates than equity because he is essentially destroying the value of equity or debt.

Could be worth a separate thread. But essentially the value creation does not appear out of nowhere.

Correct - the value creation does not appear out of nowhere. Rather - for a "small speculator/trader" the value created comes from those who use derivatives as "hedge" - as "insurance". The "Underwriter (issuer) of these derivatives" is essentially in the Insurance Business. This "insurance premium" becomes part of the operating cost of the Mutual Funds etc, who use derivatives - as you stated - "to reduce risk".

Therefore derivatives do not "destroy the value of equity or debt" - but rather reduce risk - as any Insurance does - but - ofcourse - become an operating expense for those who use/buy derivatives to reduce risk of the "unknown future".

Trading derivatives - as opposed to buying and holding to reduce risk - is highly speculative and only suitable for some traders.

I do not think discussions of this type are "worth a seperate thread" since these are largely issues of philosophy and "system analysis". However I desire to find a thread where trading is taken more seriously and is more informative about charting etc. etc. etc..

Edited July 9, 2010 by Parvis

[zorro1]

I think any legitimate trader will sooner or later realize that there is more serious money to be made in Derivatives than in Stocks. The idea that derivatives are "riskier" methods than stocks is just totally false. However, derivative trading takes significantly more work to study and understand the particular Market.

Very true on every point. of course I could use derivates to reduce risks. but conceptually I believe you can get equity returns for less risk with derivative. However derivatives add risk and destroy value in aggregate. What they actually do.is increase risk and destroy value from existing capital to derivatives. So the legitimate trader will sooner or later work out that there is more money in derivates than equity because he is essentially destroying the value of equity or debt.

Could be worth a separate thread. But essentially the value creation does not appear out of nowhere.

Correct - the value creation does not appear out of nowhere. Rather - for a "small speculator/trader" the value created comes from those who use derivatives as "hedge" - as "insurance". The "Underwriter (issuer) of these derivatives" is essentially in the Insurance Business. This "insurance premium" becomes part of the operating cost of the Mutual Funds etc, who use derivatives - as you stated - "to reduce risk".

Therefore derivatives do not "destroy the value of equity or debt" - but rather reduce risk - as any Insurance does - but - ofcourse - become an operating expense for those who use/buy derivatives to reduce risk of the "unknown future".

Trading derivatives - as opposed to buying and holding to reduce risk - is highly speculative and only suitable for some traders.

I do not think discussions of this type are "worth a seperate thread" since these are largely issues of philosophy and "system analysys". However I desire to find a thread where trading is taken more seriously and is more informative about charting etc. etc. etc..

" However I desire to find a thread where trading is taken more seriously and is more informative about charting etc. etc. etc.. "

hotcopper.com.au you will be blown away by chartists especially weekend chart section coming up

[lannarebirth]

However I desire to find a thread where trading is taken more seriously and is more informative about charting etc. etc. etc..

Pretty good message board. Very Active.

http://www.traders-talk.com/mb2/index.php?act=idx

Very good message board but not very active.

http://forums.technicalwatch.com/post?id=4760483&trail=50#7

[Abrak]

Correct - the value creation does not appear out of nowhere. Rather - for a "small speculator/trader" the value created comes from those who use derivatives as "hedge" - as "insurance". The "Underwriter (issuer) of these derivatives" is essentially in the Insurance Business. This "insurance premium" becomes part of the operating cost of the Mutual Funds etc, who use derivatives - as you stated - "to reduce risk".

Therefore derivatives do not "destroy the value of equity or debt" - but rather reduce risk - as any Insurance does - but - ofcourse - become an operating expense for those who use/buy derivatives to reduce risk of the "unknown future".

Trading derivatives - as opposed to buying and holding to reduce risk - is highly speculative and only suitable for some traders.

I do not think discussions of this type are "worth a seperate thread" since these are largely issues of philosophy and "system analysis". However I desire to find a thread where trading is taken more seriously and is more informative about charting etc. etc. etc..[/size]

Well it certainly isn't worth discussing if you believe US$615trn of derivatives reduces risks and adds value. But that is what bankers say and is totally illogical.

You cannot essentially reduce risk merely push it somewhere else until it builds up to create a bigger bubble. This is fictional capital that demand a return and a fee on the same productive capital. MBS merely spreads the risk around and increases capital.

So there are two clear points derivatives must demand a return and pay fees so must be capital to some extent.

Second the fact I own BP bonds 85 and pay 6 for cds clearly reduces my risk to zero. However if the bond defaults to zero then the guy who sold the cds has lost 15x his money. Doesn't sound much like risk reduction to me.

So the key point about derivatives is that people will pay a premium to reduce risk. Derivatives can also be used to add risk and volatility which encourages and increases the price of hedging. Moreimportantly you can use derivatives to effect the underlying cost of capital. Very simply it is clear that derivatives add systemic risk, have costs and have no effect on underlying productivity except to reduce the returns of productive capital.

if you consider your post carefully you will see it is complete nonsense. The holder reduces his risk which is taken on by an 'insurance' company. Now if there was a fire everyone is fine. the insurance company has 1000 payments and one fire which cost 800. But in capitalism variables are co_dependent. And when the shit hits the fan they have 800 fires at once and the insurance company goes bust.

Anyway look up guy called Rakesh Saxena and see how he created and traded derivatives.