Day Trading

www.optionetics.com is thorough, but expensive.

David Schirmer is the guy to learn from.

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://paisainvestment.blogspot.com

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.

One was going to teach me to day trade with charts and statistics and graphs and Ouija boards and a gypsy with a crystal ball.

The other promoted a software that would pick stocks ready to break out.

The problem with the first is you would spend all your time charting and mapping and whatever. Trading happens second by second. You don't have time to chart anything.

The other might be fine for investing. But a trader doesn't need to know a stock is ready to break out. A trader needs to know the instant it is going to happen and no software will tell you that.

I do trade. Most of my trades are in DOW stocks. On any giving day,most have a nice daily spread of about a buck and a half. Sometimes it will be much more.

In trading the DOW, I have a very good indicator of where to be. Now I will not get rich doing what I do. But by trading blue chips I minimize my potential for loss. I can always move a good stock into my true investing account, knowing it really will come back

The market travels up and down more because of emotion and greed than it does true financial data.

With brokerage fees being so low you can trade on a twenty-five cent rise. 500 share up .25 is $125. You can do it several times a day. I traded the same stock Monday three times, put the money in the bank and was on the beach by 9AM…. market opens early in Hawaii

I don't believe anyone can teach you to trade. Your best bet is to try it with play money for a long time before you put up real cash. There are many virtual sites around.

When you do decide to trade, make sure your brokerage firm has level 2 NASDAQ quotes and then learn to use them.

As to forums, I have never had much luck with them. I use Scottrade, with there Total View they have active trader alerts. I had a good look over several days and decided it might be good for them for me to trade their picks but would not do me much good.

Also if you are an active trade you will get marked as a pattern day trade, make sure you keep enough in the account. You also should have another account for investments.

Good Luck and Good Trading

Before you invest in any security, whether as a trader or an investor the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest, and the importance of being able to make your own decisions.

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance.

Other website that can provide instructions and help with procedures and terminology are Investopedia.com, Stock Charts.com, investorshup.com; and 1source4stocks.com
Visit some of the more professional websites like Zacks.com, Smart Money, Schaeffers.com, Trading Trend, Trading Markets, these website will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.

Good luck