The harsh reality: As antique dealers, retirees and system administrators create trading strategies on the exchange (and what comes of it)

Photo: Telegraph.co.uk video screenshot

Nowadays, anyone with a bank card and Internet access can try to make money on the stock exchange. Such people are sometimes called “day traders” or DIY (do it yourself) traders. How do ordinary people who have never worked with hedge funds or HFT companies go to the stock exchange, and what kind of success do they manage to achieve (and can they do at all)? That is what will be discussed in our today's material.

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Former antique dealer: "I lost the house, and then I brought it all back"

Journalists of The Telegraph edition talked with three independent traders. The first hero of their material was 51-year-old Rene Muccio (his photo above). He lives in South London and studies stock reports daily to increase his savings. He is one of the huge army of “day traders” selling and buying stocks online from their bedrooms and kitchens, inspired by contextual advertising or booklets promising thousands of pounds of earnings per day.

Mr. Muccio told the journalist that he had earned £ 220 a day earlier in the foreign exchange market, using the exchange difference between the pound, dollar, euro and yen. Today it is his biggest daily win.

The path of the father of three children to this success was difficult and thorny. In 2007, he left a successful antique business in order to be able to devote himself to stock trading. In the first week, he squandered 2,000 pounds of his fortune. “I was looking for excuses to stop. And I did not find it, events were developing too swiftly. I didn’t understand practically nothing in this matter, ”the edition quotes the trader’s words.

After 6 months the savings came to an end, it was time to mortgage the house. “I didn't give a damn. Because even if I lost, I felt that I was doing what the heart tells me, ”says Muccio. Such behavior fits into the description of the concept of "game addiction".

Home traders are armed only with an Internet connection and standard software. Without any additional training, any strategy is a guessing game, explains Marc Dampierre, an investor in Hargreaves Lansdown. He is sure that it is unrealistic to predict market behavior at short intervals if you do not possess insider trading. It is clear that among the people practicing such a strategy there are more losers than winners.

Solo career as a trader from the City

Charlie Burton from Greenham, Berkshire, was among those lucky ones. He has a Porsche and a six-digit bank account. He is from the former City traders who have switched to independent feeding. His biggest success - 7,000 pounds per day, or rather, in 5 minutes. Now his goal is more modest, he expects daily earnings in the region of 500-1000 pounds.

Despite his 17 years of experience in a large management fund, he also lost significant sums on the road to success. Starting to trade alone, he lost 250,000 pounds in the first year. The turning point was the closure of the account in 2003. “Now I’m more careful, I’m not too happy when everything goes well, because I know that I can lose everything the next day,” he says.

Burton says that trading on the stock is within the power of everyone, even without a six-digit bank account. The main thing is to set realistic goals. He adds that those who decide to do this should be prepared to lose money in the first few years. “People think it’s enough to read a couple of books and take an online stock trading course. But it is not. Trading is the hardest job in the world, ”The Telegraph quoted Burton as saying.

To begin with, he advises to give stock trading only a fraction of his free time. “I met traders among pilots, surgeons and dentists. More and more people, no, no, yes, and go to the stock exchange in the evening from his bedroom, ”he shares his impressions.

Hobby shop owner

The third sketch about a man of this type - about the "half-day trader" Jackie Mitchell from Northwood, Midlasex. She is 52 years old. During the day, she runs a household goods store, and in the morning she plays on the stock exchange. She became a trader 7 years ago, when she accidentally came to a free seminar. It seemed to her that trading on the exchange was simple, and the next day she opened a brokerage account. Soon after, she lost her £ 3,000 savings.

Photo: Telegraph.co.uk

“Be prepared to lose money if you are new. Nobody talks about this at seminars, ”she explains. Mitchell says that now she has learned and earns on the stock exchange. But does not want to call the bag, so as not to jinx it. “This money is enough for me to pay my bills. My hobby does not oblige me to anything, I can leave to rest for a couple of weeks and just grab a laptop with me, ”she says.

Retired investor

In our blog, we have already told the story of seventy-seven-year-old Paul Glendorf from Ohio, the US state. The former plumber decided to master the exchange trade as a hobby after retirement. While working, he did not have time to think about investments, but as the retirement age approached, Glendorf began to wonder what would happen to his savings. Perhaps he could manage his capital better than graduates.

Photo: CNN Money

At 60 years old, he opened a club that he and his colleagues called “Stock Gurus” - it was a joke of pure water, none of the club members had any idea about the stock market. At first, the retired's friends were going to the former school of plumbers. Later a small investment fund grew out of it.

Over time, the pensioner has developed his own trading system, which involves the use of fundamental and technical analysis and work on long intervals - he buys stocks that meet the selection criteria and show growth, and then holds them for a while. Glendorf is not engaged in playing at short intervals.

In 2013, Glandorf's investment income was 57%. Even taking into account the favorable situation on the market, he managed to bypass the S & P 500, which showed an increase of 30% for the year. Since 2001, when he took over the management of his own fund, he has not had a single significant failure. Glendorf says that 80% of the stocks of companies he chooses make a profit, 20% - unsuccessful investments. He argues that this ratio is more or less constant in time. Except for the situation in late 2007.

Sysadmin: "Lost almost everything, but was able to reach a stable profit"

Attention to the stock market is paid not only by older people, but also by young people. They included Mike Sule, a student at the University of Nevada in Reno and the network administrator of the Tahoe Forest hospital. He spent several months developing a trading robot and a strategy for it.

At first, everything went well, but due to inexperience the young man made a mistake - he flew off to Iceland for a holiday, staying for several days without stable access to the Internet. When he returned home and connected to the network, he realized that something was wrong. His score was significantly less than before the trip.

“I realized that not everything is in order. I almost lost everything. ”

Sule updated his trading algorithm shortly before boarding the plane. And while he and five of his friends traveled around the country of geysers, his software lost money due to an error. In total, the robot lost more than $ 6,000 - about 60% of the deposit at that time. It turned out that the problem was a typo, which led to the program buying twice as many shares as it sold.

After the failure, Sule stopped his algorithm for six months - this time he spent on developing new tools that check the code for errors before the algorithm starts working with real money. Not so long ago, according to him, the trading systems created by him reached a “comfortable profitability”, and the number of profitable months outweighed the number of ended with a loss.

“This is still a hobby for me. It would be great one day to get passive income that goes beyond “active,” says Mike. “But I am not particularly in a hurry in this regard. I still like to have a full day job. ”

Read also : The editors of the ITinvest blog on Habré talked to the developer Andrey Gorkovenko, who told how knowing C # and C ++ helps make money on the stock market.

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Source: https://habr.com/ru/post/301948/

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