Day Trading

I will give you what info that I can. Although there are many others who are far more expeienced with daytrading than I am. I have tried many different kinds of stock trading, including daytrading. Of them all, daytrading is my least favorite. It may not be the most work (but it ain't easy), but it's definitely the most stressful. In my experience there are far easier ways to make money in the stock market.

By law the minimum amount needed to open a daytrading account is $25,000. This will open a margin account, with which you can daytrade up to four times the amount that you have in your account. So with a minimum account of $25,000 you can daytrade up to $100,000 per day. (There are some restrictions) You must pay interest on any amount that you hold overnight that is in excess of the cash in your account. Daytraders never hold anything overnight.

There are many different styles of daytrading. You can trade gaps up, or gaps down. You can trade technicals or breakouts. You can trade a particular stock or group of stocks. Each style requires a specific set of tools and the skills to use them. At a minimum you will need a good broadband internet connection, streaming level 2 quotes, and a good broker. Quotetracker is a good, free platform that you can download and try, just to get a feel for what is involved. Also I believe that Scottrade will let you download and try their platform for free.

The broker that you choose depends upon your style of trading and the volume that you trade. Flat fee commission brokers like Scottrade are fine if you trade volumes above 1000 shares at a time. On a thirty dollar stock, that's $30,000 per trade. Personally I may buy more than 1000 shares, but I'll often take a position 100 shares at a time. So in my case paying $7 for each of those 100 share trades would kill me on commissions. Instead I use a broker that charges per share, not per trade. If you're not dealing in high volume it's best to pay per share, not per trade. That way you can buy 100 shares and it will only cost you $1 in commission.

The other thing that you should consider, just in case you do make money daytrading, is taxes. Although the advent of online tax services has made keeping track of all those daytrades considerably easier, it can still be a headache. It's much easier just to buy a stock, hold it all year, and then pay the taxes on it. Very simple.

I do not believe that daytrading is the best way to go for a beginner. It would be better to start by just buying and holding, or swingtrading. Personally I now use a service that sends me alerts on what to buy and sell. It actually works much better than I could ever do on my own, and it's a whole lot easier. Still it's quite common for me to lose $1000 or more per day. But on average my up days far outweigh my down days.

Yes, I do this for a living, and it is much easier than having a real job.