Never in the history of mankind has a stock garnered a greater
following or more attention, which makes me want to stay far away
from the tree. Aren't there better opportunities elsewhere?
It seems to me the bread and butter of making $$$ via ideas on
this website has always resided with the lower-priced stocks that
make quick pops and/or drops. Besides, AAPL seems to be a
crowded trade with 90% of investors already aboard in one form or
another.
To me, AAPL is nothing more than a proxy for the entire market,
and although I don't play ETFs or indices, I suspect those who want
to place a bet on market direction have better choices
elsewhere...unless, of course, you are an deluded to the core and
believe AAPL is headed right back to $700+by year-end.
like it or not it moves the market so i am finding all the
attention it gets here is useful. for me ritchie i trade
indexes just about exclusively and at the moment aapl has almost an
unhealthy influence on indexes.
the only time i even look at the trade ideas section is when i
am frustrated cause i have not found an index to trade for a week
or two.
given that you trade indices exclusively, Morgan.
Different strokes for different folks.
As an aside, I'm curious: Since an index tends to move
slower (in percentage terms) than most individual stocks, do
you find you either have to place a much larger "bet"
or hold an index for a longer period of time (compared to
trading individual stocks)? If not, wouldn't you have to
be right a much higher percentage of the time to make make
good money?
there are a hundred answers to this and i bet i have not
thought of all of them but the simple one to start with is- what
suits your or my situation.
when i started learning to trade i had a very busy work life and
not much time for trading and the first course i bought was very
big on "getting to know the instrument you trade" as in how it
moved daily ,weekly, yearly. so i did and have since , so i am much
more comfortable knowing a couple of indexes well, than trading a
new stock every couple of days. i also concentrated on swing trades
that lasted a week or three and therefore took less time to manage.
i still do that but when i have time now can comfortably trade
indexes for just a day or two as well.
so to your specific question, yes an index may move slower than
stocks but i tend to look for longer trades anyway and no you do
not have to place a larger bet if you use instruments with leverage
as in futures or CFD's. you sure do not have to be right more
often.
when you say "bet" i assume you mean how much money you need in
your account to make a trade NOT how much we are
risking.
if i had $5000 in my account i could trade $10000 worth of stock
, if that stock moved 10% i make $1000.
with $5000 i can trade 1 mini s&p futures contract- it makes
me $50 for each 1 point the spx moves. to make $1000, spx needs to
move my way 20 points. a 20 point move in spx is around a 1.5% move
at present. so i need a 1.5% move in spx to make the same profit as
a 10% move in a stock.
another thing to take into account is that indexes are not as
volatile as, especially small stocks. once moving in a direction
they are more likely to continue, smoothly for longer. that is a
generalisation, but if you think about it it makes sense, they are
slower because they represent a collection of many stocks, and
because of that they do not jump around as quickly as some
individual stocks can.
Just keep in mind that instruments of leverage are a double
edged sword. When you put up $5,000, as you say, through one
of these instruments, you are in fact risking more than when I put
up $5,000 to buy shares in a stock. Here's why: We always
have to keep in mind we could be wrong and we may lose the trade.
So, if I put up $5,000 on a stock and the position moves
against me by 1.5%, I lose $75.00; but if you're wrong by 1.5%, you
LOSE $1,000. In effect, you are putting more at risk than I
am (risking $1,000 to make $1,000).
Your play offers greater leverage than mine, which is great if
your right (and yes, you do need to be right more often than I do).
My approach is different. Having been a professional
horseplayer, I see value in risking little to make a lot.
Stops help me do that since my downside is limited while my
upside is open-ended.
Anyway, best of luck trading whatever you're most comfortable
with.
Agreed that aapl is overplayed in the media, but I think it is
crucially important to follow it and map it -- even if you don't
trade it. It is as important as following the oil trade back in
2008 (I've posted a good comparison yesterday). This is THE biggest
stock in the world, probably the most over-hyped, and LEADS the
market. I think you are right that "fan boys" of aapl are
delusional to think it rips to a new high now. Extending that
thought I think that it is delusional to think we are going to new
market highs without the market general. While aapl bounced hard
odd a long term trendline, it also breached a swing low and has
made a lower, low. Extending this, I think the spx breaches the
June low.... And within weeks
A "sythetic" long or short on apple is the same as owning the
stock if you know how to use options.... without investing
in 50k every time you press a button.
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Why the obsession with AAPL??
Posted by RichieD on 16th of Nov 2012 at 06:33 pm
Never in the history of mankind has a stock garnered a greater following or more attention, which makes me want to stay far away from the tree. Aren't there better opportunities elsewhere?
It seems to me the bread and butter of making $$$ via ideas on this website has always resided with the lower-priced stocks that make quick pops and/or drops. Besides, AAPL seems to be a crowded trade with 90% of investors already aboard in one form or another.
To me, AAPL is nothing more than a proxy for the entire market, and although I don't play ETFs or indices, I suspect those who want to place a bet on market direction have better choices elsewhere...unless, of course, you are an deluded to the core and believe AAPL is headed right back to $700+by year-end.
like it or not it
Posted by morgan8 on 16th of Nov 2012 at 09:30 pm
like it or not it moves the market so i am finding all the attention it gets here is useful. for me ritchie i trade indexes just about exclusively and at the moment aapl has almost an unhealthy influence on indexes.
the only time i even look at the trade ideas section is when i am frustrated cause i have not found an index to trade for a week or two.
Fair point...
Posted by RichieD on 17th of Nov 2012 at 07:34 am
given that you trade indices exclusively, Morgan. Different strokes for different folks.
As an aside, I'm curious: Since an index tends to move slower (in percentage terms) than most individual stocks, do you find you either have to place a much larger "bet" or hold an index for a longer period of time (compared to trading individual stocks)? If not, wouldn't you have to be right a much higher percentage of the time to make make good money?
now you have opened a can of worms!
Posted by morgan8 on 17th of Nov 2012 at 08:30 am
there are a hundred answers to this and i bet i have not thought of all of them but the simple one to start with is- what suits your or my situation.
when i started learning to trade i had a very busy work life and not much time for trading and the first course i bought was very big on "getting to know the instrument you trade" as in how it moved daily ,weekly, yearly. so i did and have since , so i am much more comfortable knowing a couple of indexes well, than trading a new stock every couple of days. i also concentrated on swing trades that lasted a week or three and therefore took less time to manage. i still do that but when i have time now can comfortably trade indexes for just a day or two as well.
so to your specific question, yes an index may move slower than stocks but i tend to look for longer trades anyway and no you do not have to place a larger bet if you use instruments with leverage as in futures or CFD's. you sure do not have to be right more often.
when you say "bet" i assume you mean how much money you need in your account to make a trade NOT how much we are risking.
if i had $5000 in my account i could trade $10000 worth of stock , if that stock moved 10% i make $1000.
with $5000 i can trade 1 mini s&p futures contract- it makes me $50 for each 1 point the spx moves. to make $1000, spx needs to move my way 20 points. a 20 point move in spx is around a 1.5% move at present. so i need a 1.5% move in spx to make the same profit as a 10% move in a stock.
another thing to take into account is that indexes are not as volatile as, especially small stocks. once moving in a direction they are more likely to continue, smoothly for longer. that is a generalisation, but if you think about it it makes sense, they are slower because they represent a collection of many stocks, and because of that they do not jump around as quickly as some individual stocks can.
Thanks, Morgan. As you say,
Posted by RichieD on 17th of Nov 2012 at 10:36 am
to each his own.
Just keep in mind that instruments of leverage are a double edged sword. When you put up $5,000, as you say, through one of these instruments, you are in fact risking more than when I put up $5,000 to buy shares in a stock. Here's why: We always have to keep in mind we could be wrong and we may lose the trade. So, if I put up $5,000 on a stock and the position moves against me by 1.5%, I lose $75.00; but if you're wrong by 1.5%, you LOSE $1,000. In effect, you are putting more at risk than I am (risking $1,000 to make $1,000).
Your play offers greater leverage than mine, which is great if your right (and yes, you do need to be right more often than I do). My approach is different. Having been a professional horseplayer, I see value in risking little to make a lot. Stops help me do that since my downside is limited while my upside is open-ended.
Anyway, best of luck trading whatever you're most comfortable with.
all agreed richie
Posted by morgan8 on 17th of Nov 2012 at 11:52 am
answer is i will risk $200 to make $1000 but not 1:1, and will not risk 2.0% of account on a trade.
so how does the switch from horses to stocks work for you, is there some crossover?
aapl has become a good trading vehicle because --
Posted by roger on 17th of Nov 2012 at 10:35 am
1. Since its recent top, the volatility has increased, obviously, and that creates opportunities long and short.
2. Its large enough that it trades in somewhat predictable patterns instead of all squirrely.
3. large enough capitalization that even small intraday swings can net a nice profit using margin.
I find that 3 time frames are enough to swing trade it and only 2 for intra-day.
swing trading - 2hr//15min/1min, or 30,10,1
intraday trading - 5,1 works well
Just look for oversold / overbought in 3 or 2 time frames.
seen more aapl charts past
Posted by freddy123321 on 16th of Nov 2012 at 08:50 pm
seen more aapl charts past week than in 3 yrs on whole move up.
love how they sell them
Posted by freddy123321 on 18th of Nov 2012 at 03:47 pm
love how they sell them to the folks that never bought it alk the way down.
Agreed that aapl is overplayed
Posted by kalinm on 16th of Nov 2012 at 07:38 pm
Agreed that aapl is overplayed in the media, but I think it is crucially important to follow it and map it -- even if you don't trade it. It is as important as following the oil trade back in 2008 (I've posted a good comparison yesterday). This is THE biggest stock in the world, probably the most over-hyped, and LEADS the market. I think you are right that "fan boys" of aapl are delusional to think it rips to a new high now. Extending that thought I think that it is delusional to think we are going to new market highs without the market general. While aapl bounced hard odd a long term trendline, it also breached a swing low and has made a lower, low. Extending this, I think the spx breaches the June low.... And within weeks
Oh please
Posted by darnelds on 17th of Nov 2012 at 01:02 am
How many on this board trade Apple? 100 shares at $500 each = $50,000 a trade. What a waste of time.
Last time I checked.... they still have options on Apple
Posted by zach06 on 18th of Nov 2012 at 10:58 pm
A "sythetic" long or short on apple is the same as owning the stock if you know how to use options.... without investing in 50k every time you press a button.