Author Topic: Going to start an account and trade based on the first recommendation I see each  (Read 7051 times)

FIRE47

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Going to start a practice account and act solely based on the first random advice I see online, on T.V. etc - this was inspired by the sell everything recommendation that the one bank had posted.

My brokerage has a very good practice account feature - going to start with a hypothetical 100k and go from there. We'll see how it does.

The rules I will be following for this experiment are as follows:

The first advice I saw today was that emerging markets had hit a definite bottom therefore trade #1 is $100k into an emerging markets ETF.

The commissions on the account are $9.99 a trade and will be factored in. MERs etc will also be calculated as expected on any holdings.

I intend to hold 15 securities. At first I will be selling ~6.75% of the current first holding (emerging market tip I saw this morning) until 15 holdings are reached.

Rules:

1. Will trade twice a week -  Monday and Wednesday around noon based on the first thing I have seen that day - I have an app that accumulates financial headlines from various sources (other than today to get the ball rolling). It serves up some real winners and I think it is perfect for this - I've seen Cramer, CNBC, Fox on it. Generally this will be where the trade comes from however anything is fair game.
2. Will not do any additional research and will invest in the first possible fund that comes up when I google the tip if it isn't a particular stock and I can't think of a fund to track the asset on my own- will not look into fees or volume - market orders only
3. Will make all buy recommendations by selling  an entire current holding based on a Random Number Generator. Numbers 1-15 will be based on the order on my holdings page (alphabetical). This is once I get to 15 holdings, at first I will be selling ~6.75% of the current first holding (emerging market tip I saw this morning)
4. Sells will be based on either a specific mention of an exact stock or to sell a sector/industry/asset class/geographic region if any of my holdings happen to fall into it (for practicality unless in the case of RBS recently will not liquidate whole portfolio or "de-risk" etc. based on vague or non-specific advice or general negative sentiment). I'm thinking most sells will be triggered by the next best buy that is recommended in the majority of cases.

I will release results monthly for the previous month

I hope to include in the results - Current account value and holdings, trades (for hilarity) and will report on rate of returns as the functionality of the account permits.

I will likely also try to include any headlines that seem especially outrageous and the accompanying trade.

« Last Edit: January 15, 2016, 01:48:13 PM by FIRE47 »

NoStacheOhio

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This is awesome/hilarious. Can't wait to see how it plays out.

FIRE47

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This is awesome/hilarious. Can't wait to see how it plays out.

I'm still trying to hammer out the details of how I will fully implement, may have to scale it back to a couple moves a week to make it manageable. Also still trying to come up with the best way to randomly pick a tip - maybe just type stock market into google and click news if I havnt heard anyone talk at work or radio/TV by noon? I also have an App on my iPad that serves up some juicy calls every hour or two.

 If there is any interest I will post a summary of the trades and results each month.

Any recommendations are welcome - this is something fun to make light of the current situation in the markets.
« Last Edit: January 15, 2016, 10:41:04 AM by FIRE47 »

RecoveringCarClown

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Oil is soooo low, how can you not buy right now!!  ;)

Glenstache

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Posting to follow the hilarity.
Out of curiosity, will you also be tracking the excess overhead costs of that kind of active management?

FIRE47

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Posting to follow the hilarity.
Out of curiosity, will you also be tracking the excess overhead costs of that kind of active management?

Yep I will, as the account will be "charging" me 9.99 a trade I believe.

I'm slowly shaping the rules - anyone feel free to chime in. The rules are meant to simulate as best as possible the damage that can be done to someone with little knowledge and by following the experts advice.

1. Will trade twice a week - thinking Monday and Wednesday on my lunch based on the first thing i see that day - I have an app that accumulates financial headlines from various sources (other than today to get the ball rolling). It serves up some real winners and I think it is perfect for this - I've seen Cramer, CNBC, Fox on it.
2. Will not do any additional research and will invest in the first possible fund that comes up when I google the tip if it isn't a particular stock and I can't think of a fund to track the asset on my own- will not look into fees or volume - market orders only
3. Will make all buy recommendations by selling my current worst performing holding (past results indicate future results :p). This is once I get to 15 holdings - at first I will be selling ~6.75% of the current first holding (emerging market tip I saw this morning)
4. Sells will be based on either a specific mention of an exact stock or to sell a sector/industry/asset class/geographic region if my stock happens to fall into it (for practicality unless in the case of RBS recently will not liquidate whole portfolio on general negative sentiment). I'm thinking most sells will be triggered by the next best buy that is recommended in most of these articles.
« Last Edit: January 15, 2016, 11:11:10 AM by FIRE47 »

Jack

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That's awesome! Now all you need to do is package this strategy into a fake mutual fund / ETF so that we can then trade fake derivatives of it and pretend to bet on it (or against it) ourselves.

FIRE47

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That's awesome! Now all you need to do is package this strategy into a fake mutual fund / ETF so that we can then trade fake derivatives of it and pretend to bet on it (or against it) ourselves.

LMAO the FIRE47 index... I honestly cant wait to see how this plays out myself. Feel free to bet on it here. Ill come up with a prospectus each month. Day 1 it is 100% emerging market ETFs and will be heavily exposed to this at first until I get the first 15 holdings.

Jack

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That's awesome! Now all you need to do is package this strategy into a fake mutual fund / ETF so that we can then trade fake derivatives of it and pretend to bet on it (or against it) ourselves.

LMAO the FIRE47 index... I honestly cant wait to see how this plays out myself. Feel free to bet on it here. Ill come up with a prospectus each month. Day 1 it is 100% emerging market ETFs and will be heavily exposed to this at first until I get the first 15 holdings.

Well... it wouldn't be an index. Don't forget to charge everyone a nice fat active-management fee!

FIRE47

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That's awesome! Now all you need to do is package this strategy into a fake mutual fund / ETF so that we can then trade fake derivatives of it and pretend to bet on it (or against it) ourselves.

LMAO the FIRE47 index... I honestly cant wait to see how this plays out myself. Feel free to bet on it here. Ill come up with a prospectus each month. Day 1 it is 100% emerging market ETFs and will be heavily exposed to this at first until I get the first 15 holdings.

Well... it wouldn't be an index. Don't forget to charge everyone a nice fat active-management fee!

You bet - 2.5%.

johnny847

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That's awesome! Now all you need to do is package this strategy into a fake mutual fund / ETF so that we can then trade fake derivatives of it and pretend to bet on it (or against it) ourselves.

LMAO the FIRE47 index... I honestly cant wait to see how this plays out myself. Feel free to bet on it here. Ill come up with a prospectus each month. Day 1 it is 100% emerging market ETFs and will be heavily exposed to this at first until I get the first 15 holdings.

Well... it wouldn't be an index. Don't forget to charge everyone a nice fat active-management fee!

You bet - 2.5%.

Only 2.5%? You gotta be charging more for running a fund that acts on the advice of experts!

With This Herring

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Don't forget that if you have all the 15ths of your pot invested and you get another random tip that says "buy X!" with X being one of your securities, you should probably take a margin loan to make that purchase.  :)

RidinTheAsama

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Following.
This is great.

FIRE47

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Don't forget that if you have all the 15ths of your pot invested and you get another random tip that says "buy X!" with X being one of your securities, you should probably take a margin loan to make that purchase.  :)

LOL - there actually was an option to open a margin practice account (probably because its a banks program) - just did cash though.

CmFtns

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3. Will make all buy recommendations by selling my current worst performing holding (past results indicate future results :p).

So your going to always sell the stock that just dropped the most... Wont this just zero you out super fast

I'm thinking that you should think about rethinking your thoughts on this one

FIRE47

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3. Will make all buy recommendations by selling my current worst performing holding (past results indicate future results :p).

So your going to always sell the stock that just dropped the most... Wont this just zero you out super fast

I'm thinking that you should think about rethinking your thoughts on this one

I'm open to any recommendations, this idea just began to come to fruition over my lunch break. The selling is the hardest one to come up with a rule for - perhaps it should be random once I am at my 15 securities?


CmFtns

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3. Will make all buy recommendations by selling my current worst performing holding (past results indicate future results :p).

So your going to always sell the stock that just dropped the most... Wont this just zero you out super fast

I'm thinking that you should think about rethinking your thoughts on this one

I'm open to any recommendations, this idea just began to come to fruition over my lunch break. The selling is the hardest one to come up with a rule for - perhaps it should be random once I am at my 15 securities?


Yea, I don't really have any great suggestions but I've been throwing around some ideas lol...
I was just thinking that selling your worst performing stock twice per week would lock in just about every loss you ever incur without giving anything a chance to rebound.

Maybe you could:
-sell your worst performing stock to meet buy requirements but only if it has been held for a certain period of time.
-sell an even amount of money from all of your holdings.
-once per week search for each of your holdings and if you find bad news within a minute or two you dump it.

Also Monday went by... Did you buy anything?


Financial.Velociraptor

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I think selling the worst cummulative performance holding each time will do better than most people suspect.  It only "locks in a loss" if the worst performing holding is down.  You could be locking in gains.  More importantly, it is half of a momentum trading strategy.  You are cutting the losers in favor of letting the (relative) winners run.  I'd stick with the original plan.  It will make a better sales pitch in your prospectus that you are "capitalizing on momentum based strategies" too.

Jeremy E.

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Tesla Apple and Energy stocks incoming

kiwigirls

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I'm in!  Where do we sign up :)

Glenstache

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What % will be dedicated to responding to penny stock banner ads?

With This Herring

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What % will be dedicated to responding to penny stock banner ads?

I vote one penny each. :D

mrpercentage

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If I get a say try maybe 5% into ESCA with a limit order to sell at $16. $18 if you really feel froggy. You have to let it ride till April 30th to follow this random guys advice. If it triggers then good for you.

How is that for random guy on the internet advice.
Disclosure: I have no real position in the above holding, but have in the past, and do in simulations. End of Report

NoStacheOhio

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If I get a say try maybe 5% into ESCA with a limit order to sell at $16. $18 if you really feel froggy. You have to let it ride till April 30th to follow this random guys advice. If it triggers then good for you.

How is that for random guy on the internet advice.
Disclosure: I have no real position in the above holding, but have in the past, and do in simulations. End of Report

Ironically, I did pretty well with ESCA a few years ago. Held it for maybe 18 months or two years. Nice little dividend.

FIRE47

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Yep, I made Monday's trade (a leveraged inverse Oil Bear ETF) - Today's trade is coming up. Didn't want to start spamming the boards but it seems like interest is growing so I may post a little more frequently.

The only thing I dont like about it is I have to log into my real accounts and see the real losses to navigate to the practice account which I was trying to limit at this point in time.

FIRE47

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If I get a say try maybe 5% into ESCA with a limit order to sell at $16. $18 if you really feel froggy. You have to let it ride till April 30th to follow this random guys advice. If it triggers then good for you.

How is that for random guy on the internet advice.
Disclosure: I have no real position in the above holding, but have in the past, and do in simulations. End of Report

I've been limited my reading lately with the drop so yours was the first advice I saw today- it will be todays trade.

FIRE47

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Didn't trade on these due to them not coming out on the right day but I found them hilarious nonetheless:

Not exact headlines but what I remember of them

WeightWatchers set to pop after Opera claims to have lost 26 lbs
Shares of electric generator makers to surge with storm warnings

Cant make this stuff up

The NYMEX Crude Bear Triple Leveraged is eating me alive so far this month
« Last Edit: January 26, 2016, 11:29:42 AM by FIRE47 »

WerKater

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Posting to follow because this is awesome.

FIRE47, will you post a clear history of your trades in some way? Otherwise, this will get complicated real fast (unless one cares only about the total sum).

FIRE47

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Posting to follow because this is awesome.

FIRE47, will you post a clear history of your trades in some way? Otherwise, this will get complicated real fast (unless one cares only about the total sum).

I'm going to try my best to build a decent report each month but within certain limits.

The total dollar amount and returns and likely the holdings at each month end. Beyond that I'm not sure yet how far I want to take it - maybe more detail if the following grows and people are receptive to it.

As an aside even 2 trades a week is annoying and I barely think about them when I do them (its actually 4 since I have to sell then buy) but right now still selling that first emerging markets ETF so its fairly easy. Cant imagine having to do this for real and actually painstakingly analyzing each move... ouch.
« Last Edit: January 26, 2016, 12:01:03 PM by FIRE47 »

LadyStache in Baja

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So fun!  Wish I would have thought of it.  For which asset to sell, I think you should just go with your "gut". 

FIRE47

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So fun!  Wish I would have thought of it.  For which asset to sell, I think you should just go with your "gut".

Yea I think so too on the sells. I'll do up some details in the next few days - got scorched on the inverse leveraged oil bear etf but since it started on the 15th and not the 1st and got lucky on a couple picks it did ok overall.

FIRE47

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Month 1 results - unfortunately I realized too late that I will not be getting detailed performance or statements for the account like I do my real accounts so I need to take the information down manually at month end- didn't realize this until Feb 1 at noon - so the results are not month end but Feb 1 at noon. Going forward I'll remember to record things at month-end. Bearing this in mind the account lost about an additional 1% between month end and yesterday at noon if my memory serves me correctly. Results are before yesterday's trade.

Without further adieu:

Starting balance 100,000

Month-end Balance: 101,544.56

01-Feb                                                 Book            Market
Apple                                                $6,678.00     6,761.00
Emerging   ETF                                             $70,298.00     71,632.00
DIRTT Environmental Solutions          $6,609.00     7,788.00
NYMEX Crude Bear  2x Inverse                         $8,871.00     7,569.00
Transcanada                                              $6,947.00     7,201.00
            
Cash                                                             $593.56     593.56
             
Totals                                                     $99,996.56     $101,544.56


Work in progress so let me know if anyone wants to see anything else.

Jeremy E.

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Month 1 results - unfortunately I realized too late that I will not be getting detailed performance or statements for the account like I do my real accounts so I need to take the information down manually at month end- didn't realize this until Feb 1 at noon - so the results are not month end but Feb 1 at noon. Going forward I'll remember to record things at month-end. Bearing this in mind the account lost about an additional 1% between month end and yesterday at noon if my memory serves me correctly. Results are before yesterday's trade.

Without further adieu:

Starting balance 100,000

Month-end Balance: 101,544.56

01-Feb                                                 Book            Market
Apple                                                $6,678.00     6,761.00
Emerging   ETF                                             $70,298.00     71,632.00
DIRTT Environmental Solutions          $6,609.00     7,788.00
NYMEX Crude Bear  2x Inverse                         $8,871.00     7,569.00
Transcanada                                              $6,947.00     7,201.00
            
Cash                                                             $593.56     593.56
             
Totals                                                     $99,996.56     $101,544.56


Work in progress so let me know if anyone wants to see anything else.
I'm doing something similar with a stock simulation challenge on investopedia,
http://forum.mrmoneymustache.com/throw-down-the-gauntlet/i-challenge-you-to-a-stock-simulation-challenge/msg958735/#msg958735
with investopedia you can view daily performance, and lots of other cool stuff

Le Poisson

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WHat happens when the first advice you see is sell advice? Why not take your sales from there whenever possible?