Day Trading

Without knowing what you already know, it's hard to know what to tell you. What I will do is give you a link to great site for explaining the tax implications of trading stocks.

http://www.fairmark.com/capgain/

You can choose how much of the material you want to read, but I suggest you be sure to read the section on "wash sale" rules given the way you described your trading.

Yes if you do this 4 or more times in a week, however, you will be tagged by the SEC as a pattern day trader. This just imposes special trading rules on your account. Mainly, you must maintain a balance of $25,000 or more at all times. Since you are talking about investing $140,000 then this wont be an issue. Other regulations pertain to margin accounts and non-withdrawl requirements. Also remember that profits made by day trading are subject to normal income tax, they don't receive the special tax treatment of long-term capital gains. But the short answer to your question is yes, you can do this.

People spend years learning how to trade & you want a short quick answer……… sorry…. there is no such thing.

If there was a "best time" to trade… wouldn't all the professionals be doing it. I do have some rules for myself;
I never buy/sell before 10:00PM EDT
If a stock reaches its high 5 minutes before 4:00PM, I'll buy.
I never trade during the hours of 11:30AM-1:30PM (lunch)

BUT…. these rules mean nothing without a ton of information I or anyone here can give you.

Here's some places to start;
http://www.alphatrends.net/ (best "sum up" of daily activity on the web).
http://www.tradingwithtk.com/ (good teacher, dangerous stocks).
http://streamer.thinkorswim.com:8000/shadowtrader.m3u
(great market comentary during the day, 9:15AM - 4:00PM EDT).

ya@eriestocktrader.com

First, if you are a long term investor, you were willing to pay 1.20 according to your limit and you got filled at 1.16 so it's a good fill according to your instructions. Long term, 4 cents isn't going to make much difference.

Second, if you consider yourself a "trader" a lot of weird things happen in the pushing and shoving of the open. The specialists on the floor make a huge amount of money at this time. In this case, it wouldn't surprise me if the specialist/market maker first did a bunch of buying of opening orders (ONT opened at 1.07) and then sold to the opening buy orders at 1.16 (ONT jumped to 1.16 right after the opening) thus making 0.09 per share just for being the specialist/market maker. He has no obligation to match the orders of public buyers with public sellers. It's good to be the market maker. Traders like me always wait to see how the stock opens to get confirmation before placing an order. A lot of things can happen in the news between 1AM and the market open. Traders never put in orders and let them sit that long.

The situation you describe is not "day trading."

According to the NYSE definition of "day trading" the sale of an existing position from the previous day is a liquidation. The repurchase of that position is the establishment of a new position. It is not subject to day trading margin requirements.

If you are using a cash account, settlement rules would still apply.

Here's something many traders don't know:
To "day trade" or "scalp": A trader MUST have - AT ALL TIMES - AT LEAST $25,000 U.S. CASH in his/her/their trading account.

This does not include any stocks or trades the trad err might be in. This is cold, hard U.S. CASH.

As soon as the account goes one cent below $25K, a whole different set of rules comes into play.

Check with your broker or any broker to confirm what I write. There MAY BE exceptions.

As far as penny shares:
They are far, far, far too risky and volatile.

Thanks for asking your Q! I enjoyed doing my best to answer it.

VTY,
Ron Berue
Yes, that is my real last name!

There is no outright requirement to be a day trader.

Generally, you need to trade on margin. it is not really the same as margin generally.

Margin is taking a loan from a stock broker to buy more securities.

With day trading, you are borrowing money from your broker because the cash you receive from a trade takes a few days to clear.

The current market exists on a T+3 system it can take up to 3 days fro money and shares to actually change hands.

So to continue to trade on money you do not yet have, youborrow it. Unlike regular margin, there is not the same degree of risk invivled with normal margin purchases.

Some brokers let you do this without a margin accont because their getting the money is a sure thing and they still profit off of you from the commissions.

When you trade, you implicitly assert that you are willing to take on risk. This risk is something which cannot be eliminated, and in a day trading scenario is a bit harder to manage.

The most basic rules would be to put stop loss orders for an acceptable level of loss you are willing to take on the downside, and not let emotion or sentiment about the stock affect that.

On the upside, it is always good to know what is an acceptable level or return, and set triggers to sell atleast part of the holdings that point. There are a variety of methods and strategies you could employ to manage risk. You can look at hedging your positions with options, and a good reading would be the book 'Options Futures and Other Derivatives' by John Hull.

A few suggestions.

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.

This can work - it depends on how much attention you're willing to devote to it. I have found that any time I take my attention off of the market for a few hours or a few days, I'm punished by an opportunistic turn that I missed. This is not a maybe - it will happen if you're not at your desk. And when I focus 9:15 through 4:15, I perform, with a couple hours homework a night.

The books recommended by others here are great. It's hard to advise you further not knowing how much you do/don't know about the market. The paper trading practice sites are an essential. Try those out in earnest and you'll save yourself from unnecessary mistakes later when errors cost real money.

I find that it's important to do a few things:

1. Chart the S&P for uptrends and downtrends - when you see an established trend the market will tend to move that way, and stay within the down slope and up slope "channel" in its daily activity for multiple days. This gives you added confidence as to when to "buy", when to "add to" your position, and when to cash out. When a stock busts out up or down that can be the opportunity to get in or out (depending on direction) of a given index, ETF, or stock. This will also help you stabilize your stock monitoring because you will focus on the stocks at present which are near "support (floor)" or ceiling (resistance)" positions. To help me do this, I've found it is incredibly valuable to have a second computer screen (I use two PCs because I'm mobile when I want to be) with several key screens of data/chart references.

One screen has no more than 6 stocks I'm watching that day, with charts on each screen.

One screen has all major sectors' charts on it - by sector fund (USO, OIH, etc.)

One screen has 52 week uptrending stocks I'm monitoring for pullbacks

Other screens are categoric (e.g., AG companies)

2. Using other resources such as the 52 week high stocks (WSJ, YahooFinance, Google Finance, etc.), and Top 100 (IBD.com) are also opportunities to check for trends, and determine whether to jump on this momentum during a given day, or to wait for a pullback and get in before a multi-day upswing for a multi-day "swing" trade. If you put in the time, you will identify pending breakouts.

3. Listen to Fast Money to pick up on hot trends and expert interviews that can indicate stocks to watch since they have such a wide audience.

4. Keep track of volume levels and beware of low volume days.

5. Track sector movement and rotations. Institutional buyers will dictate what will move, whether it "makes sense" to you or not.

6. Listen to Art Cashen (sp?) - every morning about 9:15 AM EST before the market opens. His insights are usually good indicators to align with or watch for. Good pulse on the market.

7. Know that a margin account can be traded every day with no interest if you don't carry it over night. Non-margin accounts will have a 3 day carry cycle until you can reinvest the funds.

Best wishes for success. Cramer can be a goof on some topics, but knowing what he's tracking can also give you one or two key stocks to watch for the next day if conditions align to support those stocks. His trading rules lists are very good.