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[terson]

I am trying to implement this strategy in my portfolio.. Based on your experience, Which is better or your usual play? Keeping the gain or Keep the initial invest amount in the free train?

It may sound the same... but I am thinking on some investment has 30% gain, 100% and 200% scenario....:D

[Kyle]

Originally Posted by trants In short Kyle, The capital gains is a factor at the end of the year. Not on a per trade basis. That is because your correct calls are offset by your wrong calls, (Of course I never have any of those... lol NOT ) I do the long term hold of the "FREE" stocks and they become long term capital gains rather than short. I truly do try to keep those for years. This also lets me only worry about the short term capital gains on say 20% or 30% not on the whole trade! You will find this also favors you using this method! As for re-entries. Remember I hold anywhere from 25% to 80% of the actual stock long. As such I wait until the trade is to irresistible before getting back in for another run. I am satisfied if they go up, down, where ever, it's the banks money so to speak. So I just wait until the stock says to me "Here we go again!" They speak to you that way! XD lol Greed has a good ear Kyle! XD All this said, just don't take out your earnings and spend them without banking 1/3 for the tax man! Hope it helps.

Thanks, Trants.

I would assume tax is a sunk cost, thereby factoring it in the cost basis like a trade commission.

Often it is what holds me back from selling a position. That's why I am looking for a rule of thumb or a general formula that allows me to figure out the after-tax profit/loss, break-even price at any instant.

[terson]

Simple math, I think we should hold around 12-15% of the gain ...
Capital Gain = 50% x Average around 25%-30% tax... = 12-15%XD

Originally Posted by Kyle Thanks, Trants. I would assume tax is a sunk cost, thereby factoring it in the cost basis like a trade commission. Often it is what holds me back from selling a position. That's why I am looking for a rule of thumb or a general formula that allows me to figure out the after-tax profit/loss, break-even price at any instant.

[slarty]

Hi Trants,
good to know there's some experts on here willing to help us newbees, I look forward to learning lots!!

I read with interest your trading strategy....
but I couldn't help feeling that there must be a couple of things I've missed:

1. If you start with, say, just $1000 and use the same dollars to buy and sell, and bank the free shares, you'll only be able to increase your trading volume after you start selling the free shares, which could be quite some way down the line, especially with some of these mining/oil shares.
2. You mention that if your free portfolio plummets, you've only lost profit anyway, but in the crash we've just seen, most stuff suffered and your trading portfolio would presumably drop as well as the free shares.

I hope these are not idiot questions.
I've usually been trading my whole purchases, buying and then selling at 10% or more according to how the share is performing, then evenually being able to buy 2 lots of shares in something else, and increasing the rate at which I can profit since I'm on more stocks than I was before. Is this a recipe for disaster?

Slarty

[DanB]

1. If you start with, say, just $1000 and use the same dollars to buy and sell, and bank the free shares, you'll only be able to increase your trading volume after you start selling the free shares, which could be quite some way down the line, especially with some of these mining/oil shares.

Correct, but this all relative, if all you can afford in $1000 then over the course of a year if you bank $4000 in free shares you've been very wise and have had excellent ROI. If you want to increase your capital then sell some free shares slowly over time and build it up - Share dealing is best done in baby steps.

2. You mention that if your free portfolio plummets, you've only lost profit anyway, but in the crash we've just seen, most stuff suffered and your trading portfolio would presumably drop as well as the free shares.

Depends on how much of a handle you have on your portfolio, if your a prudent invester you'll bank your free shares and put stop loss on your primary capital investment. Leave it in without due care and attention and risk losing.

I hope these are not idiot questions. I've usually been trading my whole purchases, buying and then selling at 10% or more according to how the share is performing, then eventually being able to buy 2 lots of shares in something else, and increasing the rate at which I can profit since I'm on more stocks than I was before. Is this a recipe for disaster?

No questions are stupid, some may bring the odd banter but expect a little fun :) that said the trading style your doing is risky (they all are tho) and I think comes under day trader, even though you may keep the shares for a week maybe.

Will this cause you trouble only if you don't watch your investment and put adequate stop loss in place.




I'm new to this but a few lessons I've learnt are:

• Protect yourself with stop loss
• Move slowly and eyes open
• Know your target
• Don't be greedy
• You will always say 'only if I...'

[slarty]

Thanks DanB,
Thanks for replying....
All the feedback I can get is useful - I am such a newbee!! - it scares me - how can I make money and know nothing about this game????
I think stop losses will be good when I'm not watching my investments so if some dumb bit of news comes out to hit the share price, then I'll be protected. - but then most of the time the share price bounces back and I would have sold at a loss, and not got the share going back up again! - something wrong with this but I can't see what ??
I've got a good bit more than 1000GBP in, but I find I can never seem to have enough to cover all the stocks I want to get onto, does that mean I'm being too greedy, or just impatient 'cause maybe I've just seen another that's going to go up! (in my opinion!!!)
All feedback to my lack of knowledge and understanding welcomed!!!!!!!!!
Slarty

[chuckd]

Patience Grasshopper. lol If you do your research and get a good entry point....have patience.

I am sure this has happened to most of us, we exit our position in a well researched play to chase

the next "hot" stock. We end up missing gains on the original play and taking a loss on the one we

chased. Raise your hand if this has happened to you. I have learned to trust my research and stick

to my plan. (ie. doubling down when needed) Remember that there is ALWAYS another hot stock

just around the corner. Do your research and stick to a plan.

[slarty]

Thank you,
I think it's the patience I lack... I've never been so enthusiatic about making money before!!!: I've never made so much money it such a short space of time.....
Is it beginners luck?? Is the crash about to fall upon my head???

[ShaggsTheStudd]

Originally Posted by slarty I've never made so much money it such a short space of time..... Is it beginners luck?? Is the crash about to fall upon my head???

Well, for the past month, the people who lost money were the ones who tried to!

[JimN]

Thanks trants,
I've been in the market for years, and just fumbled with brokers that haven't cared anything but the commision. Have followed stockrants for about 1 1/2 months and have done quite well with the advice from the postings along with my own research which cooraborates what you've already posted. I'll be follwing your advice here too on the free shares. Thanks