That point of time is now. Had you bought at the peak at the end of August, you would still be holding now 4 and a half months later. Say 1 CFD costs $2.50 to hold per night and there is 128 days from September 1st to today, that is $320 dollars in interest. It could be many many months more before you make that interest back, plus profit. Keeping in mind that interest will continue to build up nightly.
Sometimes it’s better to cut your losses and start over. I have about 90 to 95% success with the simple rules I set myself outlined above. My losses were all intentionally taken for the reason I just gave - sometimes it’s quicker to cut your loss and make the gain elsewhere, rather than be patient and wait for the stock to rise.
It’s the same principle and judging by your comments on here you are really trying to find a way for this work, the only way this will ever work is if the stock bottoms and you somehow manage to buy the bottom and then the stock has a 20% gain in the next month (give or take). Otherwise if you buy the stock and it doesn’t move/you buy the top you are screwed.
But the way you describe it “you are really trying to find a way for this work”. As I said before I have done that many times before without leverage. My success rate is 100% sofar. And do not forget we are talking about megacap stock MFAANG.
The return is not great like the one I have with EV individual stocks, or other growths Chinese stocks but the risk is much lower with Mega caps stocks.
The same strategy. So do not sell it at loss. Find the best possible entry during the dip, The dip not because of fundamental change. You might want to combine it with Dollar Cost Averaging (DCA). I also have S&P 500 Index fund that I keep it in my SIIP and never sell it to catch the continues growth of this stock. The problem index fund here is that they buy it when it is at long time high. You will not be getting the benefit when the mage caps stocks are making the dip because of the sentiment in the market (not fundamental change in business).
Show me in the chart above in which point this strategy does not work.
Keep in mind we are just talking about Megacaps, we do not include when they have not turned to become a mega cap stock.
The risk swing trading with megacap stock is very low as the risk they go into administration is almost nil. And they keep growing. We are not talking about the return you would have got with penny stocks or other high risk growth stocks. When it is not bull market the return is lower, but you could still do it, it is only that it is probably better to divert it to another stocks as the opportunity cost is high.
Leverage and non-leveraged stocks don’t act the same! Just because MSFT will go up 1% doesn’t mean the 3x will go up 3%. I linked an article showing you a few examples.
You obviously haven’t taken in what anyone has said to you. Good luck when the market consolidates or starts to go down.
"@Zerr. Just because MSFT will go up 1% doesn’t mean the 3x will go up 3%. I linked an article showing you a few examples.
Well you are refering and also your link is about leveraged ETF, but I am refering to individual share is leveraged not ETF, so the complication of how the index is calculated is removed from the Equation.
It is explained it here:
“For example, if Amazon.com Inc. rises by 1% over a day, then the ETP will rise by 3%, excluding fees. However, if Amazon.com Inc. falls by 1% over a day, then the ETP will fall by 3%, excluding fees.” That is what I said before.
Well, It is the same thing with CFD, you always need to pay the fee for leverage product. The same thing you are taking Mortgage, to leverage your buying power for purchasing power, you will need to pay the interest for that.
Otherwise, how do they make money, also how do they len people money or lend people share? But you get leverage with it
They mention it clearly “excludng fee”. Everyone with basic math knowledge could see that without need to be explained that it will not be exactly the same without buying share without leverage.
Professional fund manager does not need to buy with leverage as they have enough money to buy without leverage so also to avoid the fee.
There are some factual errors on that page you link to from a provider of leveraged ETPs eg implying that you can lose more than you in with CFDs.
I’m not sure why you think a leveraged ETP on a single share is less risky than a similar product on an index. With single shares there is still a rebalancing mechanism (see the recent threads on Granite Shares Rolls Royce ETP to see how positions can be wiped out pretty quickly).
If you read about decay due to fees and daily rebalancing I suspect you won’t want to hold these type of products for more than a day or so (which doesn’t really fit with my understanding of how you’re investing at the moment).
TL:DR ETPs are significantly more risky than what you are doing now and won’t deliver a simple 3x multiplier of share price.
Thanks about this info really appreciated. I will have a look on this.
About the fee is clearly stated on the KPI. Also eveyone is aware that you will need to pay the fee for any product. But I have not seen anyone is mentioning about the need for balancing and rebalancing mechanism in the previous discussion similar to what leverage ETF is doing.
Balacing serves a purpose for index fund, but I wonder why there is a need to balance or rebalance mechanism if it is just an individual share is leveraged.
I will have a look on Granite Shares Rolls Royce ETP.
What make you think I lose money. Yes, my profit is going down due to market correction but this things happen to everyone. But I did not lose money at all.
I do not currently have a leverage position. But Show me MFAANG Stock in the chart where you lose your money even after in this market correction. You just need to wait until they come back. And histoyy has shown they always come back even stonger. They have been tested in much more severe environment such as COVID-19 market crash in late March last year.
And for" Dane James" is Enron an MFAANG ?
In fact, Energy companies/banking sectors are the last thing you will need to consider when come to swing trade. Think about their ridiculous executive pays, bonusess, which motivate them to maximise the short-term profit. When the companies go under they already quit.
I bought at the top at the end of August. I sold after 3 months for a loss. If i did not sell, I would still be holding after 7 months, at a loss, at $7.50 per day.
Also, this was my biggest loss ever. But it was a good decision. I made the money back already. If I didn’t sell, I would be at a loss.
I agree with this. But not for your reasons. Swing trading needs volatility. Banks are not volatile stocks because the entire concept of money and our entire society rely on them. Society also relys on energy so these are very stable stocks; but I feel energy (and also pharma) stocks are number 2 after banks which are number 1 (I’m talking about societal dependence).
Did you buy it during “the significant dip”?? You bought at the top at the end of August and you sold after 3 months for a loss. Aslo I have seen there is another one on December 28, 2020 it was the peak for Amazon, as Christmas and new year season. This is a fundamental mistake. If you buy it at any time (not during the “significant dip”) what is the point of doing a swing trading in these sorts of stocks if you could just track the performance using regular index fund?
You will need to buy during a significant dip. And the stock price falls due to the non-fundamental issue such as activist try to disrupt because they did not agree the way the business is conducted. Or unfair severe punishment due to missing the target, severe market correciton, etc. Example of siginficat dip is the recent market correction up to a week ago when Amazon share was around $2,900. Just watch a few monts time from now. It will bounce back and you sell it.
Your issue is entirely different you buy randomly and you are facing the hard choice of selling now for a loss or not selling it and wait. Some people have to do that because they need the money., but that is entirely a different issue,. And it seems you are happy of doing thatand makig a loss. Next time you will probably not as lucky as this case.
But implying this strategy you will need to make sure you buy at “significant dip” and will never sell it at loss? The stock will almost certain be bouching back at all time high. Even it wil mean you will have to wait for a few months. In this case you will never lose money.
What is your time Horizon for your Index Fund? How much return did you get in your index fund? Keep in mind we are talking here of a very low or no risk strategy which could only be matched with bonds and / or very well diversified index fund.
I disagree. The stock could easily have risen and I could have made profit.
212.5 days x $7.50 interest = $1593.75
If I held this position and waited until it was profitable, I would have paid 1593.75 dollars in interest from the time I opened the position until now. I sold in December for a loss and have since made the money back.
Not correct. I was buying on an upward trend. The problem is I bought the top.
What index fund? I don’t hold any index funds because tax in my country is too expensive for index fund investing.
In conclusion, buying FAGMAN stocks doesn’t guarantee you returns. Be careful!
We are talking about two different things here. I am talking about buy MFAANG stock during the “significant dip” not random. Example of significant dip is the recent market correction about a week ago. The stock price falls due to the non-fundamental issue in business. For examples, activist try to disrupt the business because they did not agree the way the business is conducted, unfair severe punishment due to missing the target, severe market correction, etc.
You did not buy it on the dip. You were facing a hard choice between selling at a loss or wait but for this in your personal opinion you miss the opportunity (e.g. opportunity cost) . In my opinion you could only count opportunity cost if you know exactly 100% you will get that if you execute that option. Doing another speculative move cannot be taken as an opportunity cost as You might be lucky this time but you might not be next time.
You could easily see the signal those who did buy MFAANG that during the recent market correction have made make money. Just wait until they reach all time high pre market correction and sell it back for a profit. If you can not wait too long just see when they start turning back and you are happy with the current profit.
I did not do that recently as I do not have money in my ISA to invest on these stocks.
Again, it was not random. I was buying on a clear upward trend.
Buying a “significant dip” is trying to time the market. For me, this might as well be random.
Each to their own, and no offence intended, but I have the impression you feel you have found some secret method of guaranteed cash. Just be careful, because you haven’t, and it’s all fantastic…until it goes wrong.
Indeed, each to their own. The fact that you bought three of them in December 20, 2020 to DCA tell everything. It is in fact the high season for retailer such as AMAZON as it is a Christmas and NY season. No major catalyst such as price correction that drove the price down.
“A significant price move” due to non fundamental issue in business will normally only happen when there is a catalyst such as , activist try to disrupt the business (e.g FB) because they did not agree the way the business is conducted, unfair severe punishment due to missing the target (e.g earning season) , severe market correction, natural disasters, cathastrophy. etc. It is hardly ever happen in general day to day business as usual
As I repeat it many times your issue is entirely different. You were facing a hard choice between selling at a loss because you need the money for another swing or wait until they recover and resell it for a profit. You might be lucky this time but you might not be next time
What I am saying is not my method.
This swing trading MFAANG stock have been known bymany retail investors. You could easily see by observing… Even duing the most severa environment such as March last year COVID-19 pandemic, it works.
Also As I mentioned on my previopus psot I have been doing that many times my success rate is 100% and I have not lost money sofar…
