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High frequency trading? Do any of your husband do this?



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amother
Pearl


 

Post Fri, Aug 14 2015, 10:35 am
Or anyone you know for that matter? First of all, just to start off, I don't want this thread to become a lashing out party telling me I'm irresponsible...I would like to just get an idea of how many ppl actually do this, is it legit? Does it work? My husband is doing so much research, we will not invest if we find any little something that doesn't sound kosher. For those of you who don't know what hft is, as far as my husband explained to me, you invest a certain amount of money in stocks ( you can choose which stock to invest in, but a broker will recommend the better ones). Its all online, all you have to do is put in a minimum of $100 depending on which website you use. Apparently it's all done by robot/computers, you just log into your stock account and see what's going on with your money. Apparently you can't lose more than you put in. Its called high frequency because apparently these websites get info about the economy/stocks even before wall street does. I am NOT saying we are investing today or tomorrow or anytime soon for that matter. I know there are plenty of ppl out there who invest in stocks. Do you happen to know anyone who does high frequency trading? Did it work out for them? Also, my husband and I both have jobs, so this is not like "we are desperate and need money fast and easy". Just something we are thinking about. Any info would be appreciated. Thanks!
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amother
Tan


 

Post Fri, Aug 14 2015, 11:33 am
My husband used to do this. Started as a bochur. He was pretty good at it. Btw theres no such thing as no risk in investing especially in stocks like this. Sometimes he did very well even making thousands off one stock. Other times lost out. Over the years we saw it was a net loss although not by tons. Also it was emotionally draining goven the high chance of losing/making it big. Another thing is at this stahe of life with kids we cant take chances with our 15k in the bank so my dh does not do this anymore.
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PAMOM




 
 
    
 

Post Fri, Aug 14 2015, 11:36 am
OP, how can you not lose more than you've out in? That doesn't make sense.
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animeme




 
 
    
 

Post Fri, Aug 14 2015, 11:44 am
The stress of any trading is extraordinarily high. If I were going to do this, I'd treat it like gambling. Say goodbye to the money, and if it happens to come back, lovely.
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amother
Pearl


 

Post Fri, Aug 14 2015, 11:47 am
That's why I'm asking Smile I've never done this before, I don't understand 100% how it all works. My husband had been researching for a couple of months already. I just wanna know if this all makes sense? I know plenty of ppl who invest in stocks, I know it's risky, I know you can make money and lose it in a split second. I just feel like, if this is such an "easy" way to make money, why are so many ppl not doing it? And if so many ppl are in fact doing this, does it work? More luck some of the time, most of the time or totally not at all? I want to be informed in case we do decide to invest a bit to try it out. It happens to be, a lot of my extended family invests in stocks, but I don't want to ask them, because we are a young couple, and my family compared to our extended family is just not making it (even without comparing...), I just don't want to give the impression that we are being careless. Which, we are not, because we wouldn't invest if we think it's too risky for now.making sense??
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amother
Crimson


 

Post Fri, Aug 14 2015, 11:51 am
We know someone in our shul who does it. He makes just as much money as he loses.

Since you have regular jobs, just put money each month into Amazon stock, you would do much better.
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Amarante




 
 
    
 

Post Fri, Aug 14 2015, 12:05 pm
I'm not sure what you want to hear from people. There is no infallible way to beat Wall Street and any website or person that tells you differently is attempting to scam you.

No offense, but from your questions, you and your husband sound like unsophisticated investors. There are highly trained/paid analysts working for brokerage companies/hedge funds who try to figure out what will happen to stocks (or bonds) or gold or pork belly futures or any other investment vehicle.

If you want to take $100 or so that you have to spare and use it as a form of recreational gambling, go for it - Gey gezunterhait :-)

If you are serious about investing to build your family's wealth, become educated so that you can evaluate and understand options. And depending on your age, the best investment for most individuals is to buy a stock index fund from Vanguard and Fidelity because, with very few exceptions, buying and selling stocks/day trading doesn't beat the market on a consistent basis. Every time you trade, you pay a fee - many unscrupulous brokers make money by "churning" the accounts - I.e. buying and selling as frequently as possible because they make a commission for each transaction.

ETA - I know many people who have done well on the stock market as an investment - but over a number of years so I have been able to ride out the inevitable downturns in the market. However, I have bought mutual funds for the most part with distribution as recommended by conservative guidelines - as to stock/bond percentage as well as domestic/international funds - large/medium and small cap. I do have a broker who my family has been using for years who is pretty conservative. For the most part I just leave my investments alone but when he makes a recommendation to sell, I have educated myself enough to understand why he is recommending it and be able to evaluate whether it makes sense.


Last edited by Amarante on Fri, Aug 14 2015, 12:11 pm; edited 1 time in total
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amother
Pearl


 

Post Fri, Aug 14 2015, 12:10 pm
Amother crimson, what's Amazon stock?
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Amarante




 
 
    
 

Post Fri, Aug 14 2015, 12:13 pm
amother wrote:
Amother crimson, what's Amazon stock?


Stock in the company. It may or may not be a good investment.

For most small investors, it doesn't make sense to invest in individual stocks.
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amother
Pearl


 

Post Fri, Aug 14 2015, 12:14 pm
Amarante, it was your kind of comment I was not looking for. Maybe you missed the part where I said we are a young couple, and we are just looking into this, and not doing anything until we have more info. If anything I think that is far better than ppl who just rush into things. No we are not investors at all, sophisticated or otherwise. People are not born investors, they all start somewhere and risk taking is involved. Which is why I'm asking, thank you.
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Amarante




 
 
    
 

Post Fri, Aug 14 2015, 12:19 pm
amother wrote:
Amarante, it was your mind of comment I was not looking for. Maybe you missed the part where I said we are a young couple, and we are just looking into this, and not doing anything until we have more info. If anything I think that is far better than ppl who just rush into things. No we are not investors at all, sophisticated or otherwise. People are not born investors, they all start somewhere and risk taking is involved. Which is why I'm asking, thank you.


I am sorry if you are offended by my answer.

Day trading is really not what most people would call an investment strategy.

Why are you asking if you are not interested in responses.

For what you wrote about a website with robots that has "inside information" before Wall Street and guarantees you won't lose money, it sounds like a classic scam to me.

But as I wrote Gey gezunterhait ;-) - it's not my money.

What does age have to do with anything. Being young is the best time to start a realistic investment strategy because money invested keeps multiplying over the course of many years. So there is no reason to think I am young and therefore I don't have to worry if my investments make no economic sense.

When people talk about being young and able to take financial risk, they generally mean that when you are young, a higher percentage of your assets can be in stocks because you will be able to ride out inevitable downturns. When you are closer to retirement, it is more critical that your assets be in a potentially less mercurial type of investment since if there is a decline, it is less likely that you would able to recover in the time frame when you need the money to live on.
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amother
Pearl


 

Post Fri, Aug 14 2015, 12:43 pm
Apology accepted. What I meant to imply by our being young, yes, maybe young was the wrong word, I guess I meant inexperienced. Which is why we want to become informed first.
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laykee




 
 
    
 

Post Fri, Aug 14 2015, 1:20 pm
I know a bit about this. I used to work on WS.

HFT is trading done by computers. The computers use algorithmic calculations to evaluate risk. the system makes trades based on risk parameters set by the user (trader). This trading system seeks to profit from slight variations in price between exchanges, similar stocks, ETFs etc. Most systems are set to make many many trades (thus the term "high frequency") and profits by capturing very slight price differentials.

Regarding market info, since there are so many HFT operations, getting news a millisecond before the general public isn't much of an advantage any longer. And milliseconds is about the time advantage a HFT system gets usually.

This trading takes a lot of money to make money. placing $100 with a HFT shop and expecting big returns is pie in the sky thinking. If the system is any good, they would have no problem raising 100s of millions of dollars and wouldn't need your $100.

My opinion is, they set the 'entrance' fee very low to entice you to commit, with the intention of asking you to 'invest' more and more later. It's not for small players.

And yes... you can lose money using HFT models. No such thing as a sure thing.

Go online and you will find lots of info on what HFT is.

One last point. Day trading is very different than HFT. One is done by people the other by computers.
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amother
Saddlebrown


 

Post Fri, Aug 14 2015, 1:22 pm
My father used to do this, and like a pp, he made a lot of money on one sale, like 15K, but then equally lost a lot. He ended up going into debt.

The only way to make money on the stock market is if you are slow and steady, invest in strong companies that are here to stay and stay with them through the downs. Even better is if you can invest in the company when it's just over its hump so that you are catching the stocks on their way up. Sell when you made a certain percentage (a pre-determined amount), no matter what, even if it looks like it's going further up. It's the greed that does ppl in. And don't panic when a good company goes down a bit because if you sell, you will lose.

To give you some examples: When I began researching this in about 2007, Ford was selling at about $8 a share. They had overcome the hump of the recession and were doing better than GM and Chrysler. Then in 2008, it went way down to almost a dollar each, but by 2011 they were trading at $18 each. With patience (and enough money to handle to downturn and not sell), one could have made quite a bit.

Another example : Whole foods in 07 was about $25, they went down to $4 at the end of 08, two years later they were back to $25, and by October 2013, they were $65.

My point here is that you need to have a long range vision in order to make money, have a pre-set percentage of profit of when you sell, and enough of a buffer in your account in case the stock drops a lot so that you don't have to sell at a loss.
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amother
Pearl


 

Post Fri, Aug 14 2015, 1:25 pm
Thanks for the info!!
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laykee




 
 
    
 

Post Fri, Aug 14 2015, 1:35 pm
your father didn't High Frequency Trade. He was an investor. Please do not confuse the OP.
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MagentaYenta




 
 
    
 

Post Fri, Aug 14 2015, 1:38 pm
laykee wrote:
your father didn't High Frequency Trade. He was an investor. Please do not confuse the OP.


This^ I know someone who decided to invest their pension in the mkt and do day trading. Eventually he lost it all.

Investors typically get advice from brokers and others and actually follow the market and trends. They also pay attention to a lot of other variables in terms of big picture economics.

There are no robot computers with inside info.
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jerusalem613




 
 
    
 

Post Sun, Aug 16 2015, 6:51 am
Hey Pearl, we are also a young couple married for under two years, and my dh has been running all sorts of investments since he was a bochur. He also used to trade stocks but has since stopped.
There is no such thing as a broker getting information before wall street does besides if its obtained illegally which is considered insider trading and punishable with massive fines and many years inside,
Must of these broker firms are interested in the commission they earn for every trade you place, but be careful because if they were so good, they would not need you and would be racking in the billions without your few usd...
As they say, "the house always wins" feel free to put your dh in touch with mine if he wants further advice..
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