Day Trading

Investing in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

When you spread your time frame out a bit, you even the odds a little more and give yourself a better chance. It's still not easy, but why start off against impossible odds?

Here's some ideas that might help you manage risk a little better and actually have a chance: http://www.srsfinance.com/Smart_Money_Principle.html

Sorry if I'm raining on your parade. I don't mean to. GRMN, BTW, looks great. Just make sure you keep a stop loss under $95 and trail that up higher as the price moves higher. Nothing worse than letting a winner turn into a loser.

Best of luck

I used to do this but I found that I could gauge individual stocks better than an index. I would recommend trading on stocks with extremely high volatility like Google and Bidu if you are into intraday trading.

I've made quite a fair bit of money this way.

The brokerage business is highly competitive and rates are usually subject to negotiation. Unfortunately there are no shortcuts. Use the internet and search for “Futures Broker” or “Forex broker” and compare the prices of 10 brokers. This will give you a feeling for the lower prices possible.

When comparing prices, make sure that they are “all inclusive”, i.e. inclusing exchange and NFA/SEC fees and any other fees that might apply. Sometimes brokers lure you in with “Trade the e-minis for $0.50″ and then you will see that they add all kinds of fees and you end up paying $5 - $6 per round turn.

When trading futures, you can expect to pay $4 - $5 per round turn with a discount broker and $5 - $8 if you need some service. Full service brokers usually charge $10 - $15 per round turn.

Right now you might consider trading the e-mini S&P Midcap. The CME Group and Infinity Futures Brokerage run a promotion until the end of the year: You can trade this contract for $1.50 per round turn ALL INCLUSIVE. I think that’s a heck of a deal.

The e-mini Midcap (Symbol EMD) is comparable to the e-mini Russell (ER).

Regarding Forex: I don’t trade Forex at all. I prefer trading the currencies as futures contracts at the CME. This has there advantages:

1.) Lower spread. The spread is usually 1 tick and not 2-5 pips.
2.) Better leverage: 1 tick in the futures is worth $12.50 and not $10 like in the forex. That’s 25% more!
3.) It’s regulated, and you are trading against other traders and NOT against the house.

Hope that helps.

Markus

PS: Below is the link for the EMD promo I talked about.

investing isn't like pitching quarters…. you actually need to learn things and it's a lifelong endeavor….

There is a difference between 'traders' and 'investors'. In the long run traders are statistically losers. That's why there are so few Warren Buffets in the world.

success in anything of value takes effort, knowledge and experience. There is not some little trick that is going to make you rich.

If you're interested, here are some things you can learn to be an investor. It's not as exciting, but it is more successful…. you can always use 10-15% of your portfolio to gamble with, but learn to be an investor with the bulk of it.

Start by getting a subscription to Barrons or Investors Business Daily… Do this for 6 months or a year. At first, It seems a bit mysterious, but pretty soon you start to understand the terms and things that investors are looking for and what they are afraid of

Go out to the internet and search on the following subjects. Become very familiar with the concepts.
Asset allocation
Long term investing
inflation
Roth ira vs ira
Large med small cap
Value vs growth
Indexed mutual funds
No load mutual funds
ETF
Sector funds
Bonds CD preferred stock
dividends
International funds
Market cycles
volatility
Fundamental analysis
Technical analysis

In most cases, I think it is wise to use indexed mutual funds and ETF's to build the base of your portfolio.

Good luck

Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.

Day trading used to be the preserve of financial firms and professional investors and speculators. Many day traders are bank or investment firms employees working as specialists in equity investment and fund management. However, day trading has become increasingly popular among casual traders due to advances in technology, changes in legislation, and the popularity of the Internet.

Trade Frequency

Although collectively called day trading, there are many sub-trading styles within day trading. A day trader is not necessarily very active. Depending on one's trading strategy, the number of trades made in a day may vary from a few to hundreds.

Some day traders focus on very short or short-term trading, in which a trade may last seconds to a few minutes. They buy and sell many times in a day, trading very high volumes daily and therefore receiving big discounts from the brokerage.

Some day traders focus only on momentum or trends. They are more patient and wait for a ride on the strong move which may occur on that day. They make far fewer trades than the aforementioned traders.

Overnight Position

Traditionally it is suggested day traders should always settle their positions before the market close of the trading day to avoid the risk of price gaps (differences between the previous day's close and the next day's open price) at the open. Some day traders consider this to be a golden rule to be obeyed at all times. Some day traders, however, believe they should let the profits run, so it is acceptable to stay with a position after the market closes.

Day traders often borrow money to trade. Since margin interests are typically only charged on overnight balances, the extra costs discourage them from holding positions overnight.

Profit and Risks

Because of the nature of financial leverage and the rapid returns that are possible, day trading can be extremely profitable, and high-risk profile traders can generate huge percentage returns. Some day traders manage to earn millions per year solely by day trading.

Because of the high profits (and losses) that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Some individuals, however, make a consistent living day trading.

Nevertheless day trading can become very risky, especially if one has poor discipline, risk or money management. The common use of buying on margin (using borrowed funds) amplifies gains and losses, such that substantial losses or gains can occur in a very short period of time. In addition, brokers usually allow bigger margins for daytraders. Where overnight margins required to hold a stock position are normally 50% of the stock's value, many brokers allow pattern day trader accounts to use levels as low as 25% for intraday purchases. This means a day trader with the legal minimum $25,000 in his account can buy $100,000 worth of stock during the day, as long as half of those positions are exited before the market close. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his original investment, or even larger than his total assets.

Even when a position has made a profit, the trader has to offset the transaction costs and the interest on the margin. It is commonly stated that 80-90% of day traders lose money. An analysis of the Taiwanese stock market suggests that "less than 20% of day traders earn profits net of transaction costs".

Day trading is considered a risky trading style, and regulations require brokerage firms to ask whether the clients understand the risks of day trading and whether they have prior trading experience before entering the market.

1) Learn basics of charting, but keep it simple. 2 things: Breakouts, i.e. a price above a previous area of resistance. Second, Support/Resistance, buy at support and sell at resistance.
2) Stick with very high volume stocks. Consider QQQQ (index of the nasdaq 100), has good volatility and massive volume so you can get in an out quickly without affecting price.

Stick to strict loss rules, because in order to succeed you have to survive the learning process.

Good Luck.

You best 4-day return would have been 13.6% and your worst 4-day return would have been -12.3%.

So, unless your stock-picking abilities are remarkable, I'd say yes, the theory is far too simple.