Day Trading

Yes, there is a very good tool. If you use one of the trading sites online, such as E-Trade or AmeriTrade, you will find simple instructions on how to use it.

I would recommend you do a lot of research before you get involved with real money. Do "pretend" investing while you study the Motley Fool site carefully. It is full of great ideas.

As long as the money stays in the account you can use it.

Really you want to short the retail (domestic) A-shares. I think this is more difficult but you might be able to get an over-the-counter swap with an investment bank. That's about the only bright idea I have beyond what you suggested, and not really executable except at the institutional level.

No.

$3000 is too high a cost to pay to learn what's all free and available all over the net.

Go and download the "OPTIONS TOOLBOX" and play with it. Everything you need to know is there.

You can get this from http://www.cboe.com/LearnCenter/RCTools.aspx

Explore CBOE - Chicago Board Options Exchange, for wealth of free information on options. There you have links to other sites too - Options institute etc.

Buy the book - Options as a Strategic Investment by Lawrence G. McMillan, for lot less than $3000 ( think it's $50 at Amazon.com )

p.s.
Mr.DowJones assessment that Option trading is riskier cannot be more wrong. On $ for $ basis, with respect to Risk & Reward, stock trading is lot riskier than option trading. Options goal is to minimize risk and maximize reward. No such thing with stock trading

Yes, they're just mini futures contracts (they are not options on futures).

E-mini's trade just like the full size contracts, except the dollar value is smaller and so are the margins. Everything you do with a futures contract you can do with a mini contract, you'll just make/lose less money had have lower margin requirements.

Hi,

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 only broker I know that doesn't have a minimum account balance is OptioonsXpress. Scottrade has the lowest at $500. OptionsXpress' commissions are slightly higher at $15 a trade but it's worth it as the service is really good.

Day trading is extremely risky, and unless you already have a pile of cash and years of stockmarket experience, you'll likely just lose every penny you do have now.

Trading is expensive. The only way to reduce your trading costs per transaction or per share is to trade with great frequency, so you'll get discounts. But really all that does is make sure your broker makes money by you trading more, it has no relationship to whether those trades you do make were profitable for YOU.

There's many better investment opportunities with far less risk. Keep learning, but definitely explore other options as well.

Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions will usually (not necessarily always) be closed before the market close of the trading day. Traders that participate in day trading are called day traders.

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.

Conservatively, you can average about 12% a year by buying large-capitalization stocks and selling (also called writing) call options to collect a premium. So you can make about $12,000 for each $100,000 in your account. With a $500,000 account, you would make about $60,000 a year. With a larger account, of course, you could make more.
Another way to make consistent profits in stocks in "swing trading," going for small moves of several days to several weeks in stocks or stock options. I use Japanese candlestick charts to swing trade, and have been averaging 8% to 12% a month, using some leverage. Instead of buying stocks, I buy deep-in-the-money options, going both long and short. Doing this, even a small account of $100,000 can make you $8,000 to $12,000 a month, an amount many people would consider a very comfortable living. Get a book on Japanese candlestick trading, paper-trade for a while (just make "pretend" trades, tracking the results in Yahoo Finance) until you become proficient at recognizing and acting on the signals.