newbie to trading: is my strategy valid?

[yuriythebest]

Right, Greetings to everyone at Forex Peace Army! I am but a humble Ukrainian with a yearly income of 1000$ per month, which allows me to save about 400$ per month if I so choose.
I want to play it safe - I know many people lost money on the "casino" style of trading (constantly buying/selling depending on stock fluctuations), what I did was different- I want to be the "long term boring trader".
As such, for now I've invested 700$ and divided it among stocks that have been on a stable rise for the past 5 years (google, mastercard, visa, sandisk, TRV), and I only plan to make decisions to buy/sell once every six months to a year, since everything less is "noise" on that timescale. Am I on the right track? Are there things I should be aware of? Thanks in advance.

 

[dkami]

This is just my opinion but just because you wish to be a long term trader "long term boring trader" this does not make it that much safer, yes longer the term chart the less noise there is but with that are bigger stoplosses but also bigger take profits and another thing to consider trading longer term is there's more chance of a natural disaster occurring. It doesn't matter how good the fundamentals or technicals are on a particular stock a natural disaster can make things go bad real quick

So to sum up you can not plan to buy and sell on a 6mth or yearly basis you must trade what you see on the time frame you took the trade on, things can change in a heart beat!

Another thing to consider (and this is debatable) is and again this is my opinion but there really is no such thing as long term anymore, like buy when you are young and by the time you are 60 years of age sell and you will be a millionaire,yes many old timers went and got a paper every morning and place trade off the prices in that and made good money long term but these days you have computers with lightning speed orders getting filled, robots ect,ect and with this comes a lot of manipulation

My advise is do you research on a stock if this is sound and the fundamentals are good then go to your chart (longer term = MN,W1 or even D1 any higher than MN and you could be waiting years just to get into a trade) and buy and sell on your technical analysis no matter what the fundamentals are saying

And remember divergence never lies

 

[FxMaster]

Well, you will be "long term boring trader" BUT you need to watch market closely, if you avoid market situation and start trade than definitely you will lose your money. Instead that you can practice much on demo and then continue trading with low amount.

 

[ilearn2t]

Hello yuriythebest

Every business faces risks. Trading the likes of "Google Inc" on the (NASDAQ:GOOGL) has a smaller risk as "Google" makes tons of money on its web page advertising, so if people stop viewing its ads the bigger its risk of failure increases.

The likes of "Apple" (NASDAQ:AAPL ) can also cause risk to "Google Inc" if they talk about launching any new software, so watch out for any reports on that company.

Do you have any cut off point (sell back) price in mind on the above companies you mentioned in your first post ?

Good luck
Liz

 

[Pharaoh]

Liz is reading my mind again. No matter what your strategy is, you always need some sort of stoploss in the event of something unusual happening.

As long as you've got protection like that in place, if long term trading suits your mindset, then it sounds like you've got a reasonably good plan laid out.

 

[bigdolly]

Valid and reasonable strategy, but to make off living with that you need to invest not less than 100-200K $. There are some other ways but to keep the speed you need to risk more which seems to be not acceptable for you. Now what you do is just for fun or you just unconsciously freeze your capital..

 

[jotekfinance]

Agree with bigdolly. And $400 or 40% of your income is a LOT.

 

[Bar2oo2]

I also think it's a smart way of trading yeah, following stock fluctuations and figuring out when to buy/sell could be a headache to most people. Stick to the approach you mentioned, and let us know how'd you do at the end of the 6 months / year.

 

[pro4Xtrader]

Actually I think that the long term boring trader approach is not that bad if you continuously adjust your stop loss to reduce the risk or fix profit in the unlikely event. But with this sort of trading you have to be very specific on the asset you trade and explain yourself in details why it has a long term potential and what are the short term risks.

Overall you could do swing trading, holding trades for couple of weeks/months which could prove to be more profitable. Just need to test your strategy for that.

 

[nahiyar]

As a beginner I also like short term strategy . It helped me to gain small profits. Gradually I work on long term . Long term strategy needs a lot of experience as well as good capital , Because we have to plan it well .