Day Trading

There was a strategy popularized in a group called the turtles several years ago. One of their features was to watch for a price break out of a moving average number. They commonly used 50 or 200 day numbers, but your 100 day will work too.

If you notice price fluctuations over time, there seems to develop something some people call ceilings and floors. The price seems to stay within a channel. In statistics you would call that a standard deviation, as practically applied–technically, it is a bit more involved, yet it is a functional equivalent of the principle.

Now, if the price of the stock or commodity contract "breaks out" of that corridor, whatever caused that would likely have some strength or momentum to it. The turtles found that they got to get more action in watching the 50-day moving average breakouts, but there was more strength and better results in waiting for a 200-day breakout. Bear in mind, it didn't matter which direction the price broke because they would buy (go long) for increasing prices or sell-short (go short) for falling prices.

Next you apply a stop loss of some sort, usually a trailing stop of something like 5 or 10 percent depending on how volitile (how the price flops around). Just because something set a new higher or lower price than it experienced recently doesn't mean it will be a straight shot up or down.

Trading is not an easy road to wealth. There are plenty of statistics to say that most people who go down it fail (90%+). I'm not going to say how much I make per week, but I will say I'm in the 10% (or less) who have succeeded. To me, you need two things to succeed in trading. #1 is a curiousity of how things work. Most good traders will tell you that "systems" are constantly breaking down (i.e., what works today won't necessarily work tomorrow). If you are going to be a successful trader, you are going to be constantly doing research for new things that work. If you don't enjoy the process of researching new ideas, I think you are doomed from the start. #2, you've got to be willing to learn how to handle emotions. Things are going to go against you, and at least in my experience, humans are wired to want to get away from the pain of a trade going against you. How you deal with these moments will define a lot of how successful you are going to be trading. Make a long story short…if you are looking for an easy road to wealth…this isn't it. If you like the game, and can't learn enough about it…then you will eventually find a way to succeed.

Trading is not an easy road to wealth. There are plenty of statistics to say that most people who go down it fail (90%+). I'm not going to say how much I make per week, but I will say I'm in the 10% (or less) who have succeeded. To me, you need two things to succeed in trading. #1 is a curiousity of how things work. Most good traders will tell you that "systems" are constantly breaking down (i.e., what works today won't necessarily work tomorrow). If you are going to be a successful trader, you are going to be constantly doing research for new things that work. If you don't enjoy the process of researching new ideas, I think you are doomed from the start. #2, you've got to be willing to learn how to handle emotions. Things are going to go against you, and at least in my experience, humans are wired to want to get away from the pain of a trade going against you. How you deal with these moments will define a lot of how successful you are going to be trading. Make a long story short…if you are looking for an easy road to wealth…this isn't it. If you like the game, and can't learn enough about it…then you will eventually find a way to succeed.

Adam has got the answer covered quite well and I agree with crim's advice. I highly recommend you don't day trade. If you don't understand ask and bid prices you don't understand the complexities of investing or gambling (which is what day trading is) and will be a quick loser of your money. Even people who understand the markets that day trade lose money very quickly. There are those that make money and many claim to make money but the statistics say over 90% of day traders end up broke. If you could make quick returns and profits they offer why would the big boys not be doing this. I am embarrassed to say I have tryed it and learned my lesson the hard way. That was a long time ago and I try to discourage anyone who is about ready to do what I did from doing so.

Everyday it will keep changing.

You can refer to Economic Times, Business Standard and other business/economy papers. They publish such data everyday. Particularly , Business Standard is exhaustive. They publish a list of top 200 stocks based on volume and value everyday.

You can also refer to Bombay stock exchange website ( www.bseindia.com) and National Stock exchange website ( www.nseindia.com). These are the most authentic sources of market statistics. Every trading day after market hours you can access these websites for such compiled data.

Everyday it will keep changing.

You can refer to Economic Times, Business Standard and other business/economy papers. They publish such data everyday. Particularly , Business Standard is exhaustive. They publish a list of top 200 stocks based on volume and value everyday.

You can also refer to Bombay stock exchange website ( www.bseindia.com) and National Stock exchange website ( www.nseindia.com). These are the most authentic sources of market statistics. Every trading day after market hours you can access these websites for such compiled data.

I have been to two teaser seminars, one because it was right down the street and the other because I needed to a vacation anyway. It was on O'ahu. *vacation not a big thing I live on the Big Island*

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