Most highly trained professionals refuse to day trade. Many amateurs think they are smarter than the pro's and try their hand at day trading. Fools rush in where wise men fear to tread…
Read these links:
http://www.sec.gov/investor/pubs/daytips.htm
http://www.ftc.gov/opa/2000/05/daytrading.shtm
http://www.ftc.gov/bcp/conline/pubs/invest/daytrade.shtm
http://www.fool.com/investing/small-cap/2004/12/27/daytrading-dangers.aspx
Also read Tom Busby's book, Winning the Day Trading Game.
They'll give you a good primer. Fantastic books to get you started. After that, you'll have a much better sense on what and where to go next.
One option would be to work with a mentor. Todd Mitchell looks interesting at tmitchell.com or tradingconcepts.com for trading.
Though if you go to daytrading, you'll need to practice a lot more than a couple of weeks. Most successful day traders I know practiced at least months before being somewhat successful as there's all sorts of nuances, the shorter the timeframe that you trade in.
Let me know if you have any questions.
Hope that helps!
Any person, website, company that is going to charge you for trading tips is most likely making more money on you than they ever will following their own advice.
The whole premise behind active trading is that the market is ineffeicient and thus, short-term opportunities arise to take advantage of such innefficiencies. The problem is that once an inefficiency is identified and gets mass publicity, it ceases to work as the trading/investing community starts to discount that information into the price.
What you need is education, not tips. Its the difference between being given a fish and learning to fish. Some strategies very well may work 80-90% of the time IN SOME SCENARIOS. But nothing will work 80-90% of the time in every kind of market.
There are really 2 main kinds of strategies out there.
1.) Those that work in a trending market
2.) Those that work in a range
The only thing these paid services are SOMETIMES good for is leads. Its up to you and your education & judgment to determine if these leads are good enough to implement with your hard earned cash.
But in order to decide this, you must have some method that you are consistently using to discriminate between what makes a good and what makes a bad trade. If you are not willing to take the time to learn this, then you should simply put your money in an ETF and/or mutual fund and be happy with getting your 8-10% on average.
If you are willing to educate yourself there are a number of resources available to you.
http://www.EliteTrader.com is a thriving community of traders where you can get brokerage reviews, vendor reviews, educational material reviews, etc…well worth looking into.
http://www.WilyTrader.com is a blog where you can see first hand what it is like to be an active trader and get a feel for the different kinds of strategies that are necessary for success.
http://www.traderfeed.blogspot.com is Brett Steenbarger's website where he talks about the psychological aspects of trading
http://www.Amazon.com : and look up the following books/authors:
The Master Profit Plan
Mastering the Trade
Brett Steenbarger (Get both of his books)
Trading For a Living
In short, just be very careful about any service offering you the sky. I guarantee you that such rewards to not come without great risks, and more often than not, those risks will come to fruition way before you see a dime of those rewards.
Hope this helps
For more clarification, there are about 252 trading days in a year. On average, looking at the history of the stock market, what percentage of these days are "up" days for the market.
Say you want data on the Dow. Go to http://finance.yahoo.com, click on Dow, then click on Historical Prices. Set the date range and click Get Prices.
Highlight the resulting table, Ctl-C to Copy, and then Ctl-V to paste into a spreadsheet program such as MS Excel. It may take several pages to get all of the data.
Simplest way: In the spreadsheet program, create another column, call it Change, next to the last column of numbers (Adjusted Close). Calculate this column as the value directly to the left, minus the value above and to the left. Count the minus signs (down days) and the zeros. Subtract from the number of rows and you'll get the pluses.
A more elegant way, if you are intimate with how to do formulas in your program, is to do an IF statement that does the following: IF the Adjusted Close is greater than the previous Adjusted Close, then enter 1; otherwise, enter 0. At the bottom of this column, have it calculate the sum. That will be the number of UP days.
Best of success.
While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.
Here are some of the facts that every investor should know about day trading:
Be prepared to suffer severe financial losses
Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status. Given these outcomes, it's clear: day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.
Day traders do not "invest"
Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.
Day trading is an extremely stressful and expensive full-time job
Day traders must watch the market continuously during the day at their computer terminals. It's extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.
Day traders depend heavily on borrowing money or buying stocks on margin
Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads.
Don't believe claims of easy profits
Don't believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.
Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders
Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don't believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.
Remember that "educational" seminars, classes, and books about day trading may not be objective
Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.
Check out day trading firms with your state securities regulator
Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. Confirm registration by calling your state securities regulator and at the same time ask if the firm has a record of problems with regulators or their customers. You can find the telephone number for your state securities regulator in the government section of your phone book or by calling the North American Securities Administrators Association at (202) 737-0900. NASAA also provides this information on its website at www.nasaa.org/QuickLinks/ContactYourRegulator.cfm.
Instead, read the Intelligent Investor and follow Warren Buffett. Get a great job and invest the proceeds wisely.
Best Regards,
Docmase
sh— can happen faster then you can blink.you need enough money to have a cushion over your $25grand bank,because if you fall below that amount,the broker will change your status to non-day trader.that means you will only have a 2-1 margin for spending,but if you can maintain your day trader status the benefits are great,the broker will give you a 4-1 margin.that means they will front you $75,000 grand on top of your $25grand to spend.think twice before you day trade.i think you have to be a special type of person to do it.apparently i'm not,cause i can't make much.
remember the two biggest problems with investing is FEAR and GREED. so keep your emotions out of it.
good luck
p.s.if you are considered a daytrader,you can trade multiple times, as many times as you want in a one day period. remember the broker charges you a fee for each trade,i.e a buy and a sell of the same stock,that's considered 2 trades. and if you are a swing trader you can only trade 3x a week.
According to the explanation given by the book I'm using, a gain of 0.5 is a gain of 2. How did they get that?
Then it goes up for 4 days at an average of 0.5 per day.
That means that in 4 days it went up by 2 points.
(= 4 days x 0.5 points/day)
This equals 89.5
They are asking what does 89.5 have to gain in order to equal 5% more than 87.5 (starting price)
This is 91.875
So the difference is the gain required 91.875 – 89.5
= 2.375
Suspect that if it is in a book it will fail because of the pump & dump scam. The successful traders will know about such methods and will deliberately game them, thereby helping themselves to your money.
Other than that, stick only to volatile stocks, and good, er, luck!