Day Trading

you are not just investing here, but have a business operations to take care of. without proper tools, how can you expect to compete with all the professional traders worldwide? and on Daily Basis??

Learn how to invest:

1. Do not chase past returns. People that buy stocks or funds because they have done well in the past are doing exactly that.

2. Do not market time. Market timing is buying based on your (or your newsletter, or your TV, or neighbor's) guess about what is going to happen in the future. Even if someone knows something, you've already missed the boat. The price already reflects what you just found out.

3. Use index funds. Over time, index funds outperform actively managed funds, mostly because they do not have those high expense ratios. Some actively managed funds do beat their index, but the ones that do usually do not do so consistently. So why gamble? Use index funds. If you want to use a few actively managed funds, make sure that the costs are very low. Vanguard has some good ones.

5. Diversify. Don't put all your eggs in one basket. Own a mix of bonds, domestic equities (large, small and mid cap funds), an international fund and perhaps a REIT (Real Estate Investment Trust) and emerging market fund. Four to six funds is all you need. Know your risk tolerance and set up an appropriate asset allocation. Rebalance as needed.

6. Consider taxes. Use the least tax efficient funds in your tax-deferred accounts and the most tax efficient funds in your taxable accounts.

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

http://crnindia.com

For most stocks, commodities and other investments, the market is just too big to be manipulated. What looks like a lot of money to you and me — and is a lot of money for an individual — is just noise to the overall market.

That's not to say that they don't ever try. Most notoriously, the Hunt Brothers pushed silver up to about $54 in 1980. They declared bankruptcy and were convicted of conspiring to manipulate the market. By the way, when they started acquiring silver in 1973, they were among the very wealthiest people in the US and world.

Now, when it comes to illiquid penny stocks, you may know that the story is quite different. Then you do have cases of "pump and dump."

That's where somebody buys a small, over the counter stock, then somehow pumps it up. Most commonly used are Internet investment chat rooms and forums, but financial newsletters have been accused of this too. If you can get a few hundred or thousand people to buy the penny stock, the price will go up. Then you dump it.

Or you can do the opposite. Short a stock, then bad mouth it until the price goes down where you want. I forget the catchy phrase for that.

But notice that these scammers are not using their money to artificially raise or lower price of stock, just word of mouth.

I don't believe that using your own money to push up price of a stock or option — by buying more and more — makes mathematical sense. When you run out of money, demand will return to normal, and so will the stock price, leaving you holding a lot of overpriced shares and options.

Remember that in the money options go up (or down) in price dollar for dollar compared to price rise (or fall) of underlying stock.

best, Rick

The SEC does not allow brokers to allow "pattern day traders" unless they have $25,000 in their account.

The "day traders" that have been successful have read many books, watched many webinars and gone to good seminars. On average it takes 3 years (or more) to learn day trading.

http://www.marketwatch.com/Search/?property=column&value=paul+b%2e+farrell&scid=3&siteid=mktw&dist=mktwmore

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As for theStreet.com, there is enough of that out there for free, and all the news can really be overwhelming. I wouldn't, but that's just because I have subscribed to other newsletter type services in the past that didn't enhance my return. If anything, I would recommend an education service, like spreadtradesystems. More expensive in the short-term, but huge dividends in the bigger picture.