Day Trading

There is no magic tool, you will have to find the answers yourself or you will never be a professional trader. Experience matters. You need to figure out the basics for yourself– don't fight strong trends, protect your capital, ride your winners, learn to spot trends, set stops, set specific goals for each trade, learn how to use leverage, learn to make money in every market, take breaks. You will fail. You will lose money. Some learn from this, some keep doing the same stupid things, some give up. If you want to be rich, you get up, ignore the pain, figure out where you made mistakes, and don't make them again. Moreover, after many years you may create the perfect trading strategy that on paper will make you rich every time, but executing it in real life is a different story. Psychology, emotions, it is your worst enemy. I was up 1200% in four months earlier this year, then my Dad got really sick and my dog died. I thought I could keep trading, but I was not nearly up to it, and wound up losing all of my profits from those four months in three weeks. It was actually a cheap lesson that I should have learned before. I won't make that mistake again. Don't look for tips or advise from others, because you can't be fixed, you have to be flexible and adapt to the market. No matter what happens you should be confident that you can start with a stake and turn it into real money in a couple of weeks; you need that kind of confidence and determination… that is more important than any software.

If you sell a call and the strike price is not reached, then yes, you keep the option premium. If the strike price is reached, your stock will be called away at the strike price of $8 and you will be given $8 per share, plus you get to keep the option premium.

If the stock drops and you want to get out of your option contract, you have to buy to close. You pay whatever price the option is worth — then you will be free to sell the underlying stock. You can't sell the stock until you buy back the calls, because you would then be short a call (you would be what is called a "naked writer," exposed to unlimited risk.) You can only write naked calls if you have a very high-level option clearance and — generally — at least $250,000 in your trading account.

You may be authorized to sell cash-covered puts. That is, if you have $10,000 cash, you can sell puts on stock worth $10,000. While buying puts is a bearish strategy, selling them is bullish. If the stock falls below the put strike price, then the stock will be "put" to you at the strike price. You will get shares of stock in return for the cash you put up. You are thus hoping that the stock rises so you can keep the option premium without having to buy the stock — thus, writing cash-covered puts is a bullish strategy.

Intelligence..

There are no tricks for trading in the stock market.

Investment strategies for trading stocks are based upon your overall financial plan and what actions you take that are relevant to the realization of that plan.

Without a financial plan, you don't have any criteria with which to determine what stocks to pick and what to do with them based upon certain performance criteria.

When you listen to these so called experts who give you investment advice, you don't see their overall investment strategy, and the logic behind that strategy.

Let's say that your goal was to make $1,000,000 in 1 year trading stocks. With that criteria, you begin to plan around it.

About $83,500 Per Month would yield a gross of $1,002,000 in 12 months.

About $2,785 a day for 30 days would yield a gross of $83,550 per month (which would yield a gross of $1,002,600 in 12 months).

So based upon these numbers, you develop your strategy around them.

The broker will give you the price, only use their price because sometimes there are slight differences e.g. HBOS holds the same price for 30 seconds after a quote even if the market price changes.
The only way to make money day trading is spread betting, commissions destroy returns on shares and CFDs are too expensive and not highly enough leveraged.
You will normally be better of following a buy and hold strategy but there is no reason not to take advantage of short term mispricing as well.
I have a high yield portfolio which I haven't changed in years but I still make some fast money trading over a short period (normally more like a week than a day).
In my experience the best way to make money short term like this is to take leveraged positions in big companies which have fallen unduly, I have used this recently to profit from tsco and bgy.

Hi,

Hey! You have done well. You have a good split between domestic equities and foreign stocks, but I think you should look into some small cap growth and small cap equity mutual funds.

Have you looked at the American Association of Individual Investors?

If I were young or even middle age, I would be investing in small cap growth mutual funds or stocks. Go here for excellent low cost advice (http://www.aaii.com/aaiiportfolios/commentaries/stockportfolio/200701comment.cfm).

Don't be alarmed at the low cost – it has some of the best financial advice on the Web.

If you have lots of time before retirement the magic of compound interest will just keep building and building. It really works and if you keep investing and re-investing your proftis every year, in 10 or 15 years you will be surprised at how it mounts up. In 30 years you could be a millionaire which probably won't amount to much in 30 year owing to the the ravages of inflation. But stocks are a good hedge against inflation.

By that time you may need a money manager to manage your money – probably before when you reach the $500,000 mark. Heck! If you have achieved that much, you probably don't need a money manager – you are the best judge of where to invest your money by that time.

And that's the primary reason to keep investing in small cap growth stocks – they will flog inflation to death.

When investing in mutual funds, select the no-load funds only. Do not invest in mutual funds with a "load", an up front commission that you have to pay before when they sell you the mutual fund. Some charge as much as 10% which is a rrip-off. Many studies have shown that the no-load funds do as well as the load funds and sometimes a lot better.

Look at the AAI Shadow Stock Portfolio. I would try and emulate that portfolio if you want to invest in stocks. It was up 25% as of November 2006. The Vanguard Index fund is only up 14%.

AAII has some of the best financial advisers and the cost is very low. They have excellent guides and advice.

You may need a broker so go to e-Trade or Scottsdale who have low commission rates.

Do your own due diligence. Your own ideas are the best. Do not depend on someone else to select investments for you. Learn about investing so you don't have to ask what stocks to invest in.

Be self reliant.

Remember what Emerson said: A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do.

Find stocks that have steadily rising net profits (earnings), low debt, and good P/Es, lots of cash, companies buying back their stock..

What interests you? Find stocks that pique your interest and passion.

You need fast growing good stocks with good earnings and in good sectors. You need to learn more about the stock market before you even think about investing in it.

The stocks world is divided into 12 sectors such as energy which chevron belongs to. It is next to last in the sectors list today.

Technology is numero uno, but things can change in a new york minute, but within the sector, the fastest growing are computer services, not Microsoft. Then, Electronic Instruments and controls. Next is computer storage devices.

The next hot sector is Healthcare, but heed the warning below. Go here for sectors: (http://clearstation.etrade.com/cgi-bin/Itechnicals?Event=srp&Section=redge&Refer=/redge.html)

The best software is Vector Vest if you can afford it. It has sector investing.

Here is a free Web site for charting stocks: (http://www.incrediblecharts.com/).

First of all, stay away from "professional brokers" and tips coming to you via e-mail or friends and acquaintances. And tips at Yahoo! Answers. And e-mail tips. Do your own due diligence – don't rely on someone else. Read Emerson's essay "Self Reliance.

Hey! They will say anything to get you to buy their junk. If it's too good to be true, it is.

Remember this, they are just sales people trying to sell you what their firm is pushing. They are not security analysts or financial planners, not even financial advisers. Trust me, I know from experience that they cannot be trusted especially with a million dollars. You risk losing it all. A million dollar account is known as a "whale" and they would love to get their greedy little paws on it and suck it dry. They just want to make commissions on what they buy and sell for the suckers, err…clients..

Get this book: The Market Gurus: Stock Investing Strategies You Can Use from Wall Street's Best (Paperback)
by John P. Reese (Author), Todd O. Glassman

Risk avoidance is the name of the game.

Remember, the harder I work, the luckier I get.

Penny stocks are highly speculative. I would avoid the ones under a dollar a share. For example, Best Buy started at less than $5. So there are some good companies, but it takes a lot of digging to find the good ones. You are looking for companies with good earnings, little debt, low capitalization, and good P/Es. For stocks under $5, very few will meet these requirements.

Stay away from the pharms unless they have patented drugs – do not invest in generic pharms, no growth there.

Check out which business sectors are the most popular and invest in the companies in those sectors. The number one, two and three are: technology, health care, and cyclicals (retail). These change periodically so keep current.

Go here for a list of growth stocks: http://www.thestreet.com/_googlen/newsanalysis/ratings/10345212.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

There are these lists all over the Web – you pays your money and takes your chances.

Watch CNBC, but don't pay too much attention to the talking heads, except for Jim Cramer, the wild man – but he tries to teach you how to invest and has some great advice.

Get Jim Cramer's Real Money: Sane Investing in an Insane World by James J. Cramer

Listen to Jim Cramer on CNBC.com

Go to Clearstation for quotes and tutorials on investing at (http://clearstation.etrade.com/). Sign up is free. Look up a few stocks. Do their tutorials. Check out the sectors.

Get this book: Value Investing: From Graham to Buffett and Beyond (Wiley Finance) by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, and Michael van Biema.

Another good book: The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of (Motley Fool) by David Gardner, Tom Gardner, and Selena Maranjian

Jim Cramer's Mad Money: Watch TV, Get Rich by James J. Cramer and Cliff Mason

I Want to Make Money in the Stock Market: Learn to Begin Investing Without Losing Your Life Savings! by Chris M. Hart\

Sensible Stock Investing: How to Pick, Value, and Manage Stocks by David P. Van Knapp

Stock Investing For Dummies (For Dummies (Business & Personal Finance)) by Paul Mladjenovic

All About Stock Market Strategies : The Easy Way To Get Started by David Brown and Kassandra Bentley

The Motley Fool Investment Guide and their Web site (http://www.fool.com/).

The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks by Dan Holtzclaw

How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition by William J. O'Neil

Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder

Big Trends in Trading: Strategies to Master Major Market Moves (A Marketplace Book) by Price Headley

Extraordinary Popular Delusions & the Madness of Crowds (Paperback)
by Charles Mackay (Author), Andrew Tobias (Foreword) This book talks about the Tulip craze in Holland where people would mortgage their homes to buy Tulip bulbs. Same thing happened in 2001 – 2002 with the Internet bubble that brought the stock market to its knees. The dot com companies were the Tulip bulbs.

Buy Investors Business Daily. It has lots of tutorials and I like it better than the stodgy Wall St Journal.

Money Game by Adam Smith

Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics) (Hardcover)
by Philip A. Fisher. Recommended by Warren Buffet who took $100,000 and grew it to $34 billion!

Value Investing with the Masters by Kirk Kazanjian

Valuegrowth Investing by Glen Arnold

The 5 Keys to Value Investing by J. Dennis Jean-Jacques

The Intelligent Investor Rev Ed. (Collins Business Essentials) by Benjamin Graham. Warren Buffet was his student at Columbia.

The Money Masters by John Train

The Bogleheads' Guide to Investing by Taylor Larimore

Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor by John C. Bogle

Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics by Gary Belsky

Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! by Phil Town . See his Web site at (http://www.ruleoneinvestor.com/). Free sign-up. I got the book at the library.

Listen. You don't have to spend a lot of money on these books – most can be found at your library and those that your library doesn't have they can usually get from other libraries in your state.

Most of these books talk about stock and mutual fund investing, but for a good introduction to other forms of investing Gerald Appel has a great book called Opportunity Investing – How to Profit When Stock Advance, Stocks decline, Inflation Run Rampant, Prices fall, Oil Prices Hit the Roof and Every Time In Between.

First, Break All the Rules: What the World's Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman Not a book on investing, but it's a nice segue into the next book.

Now, Discover Your Strengths by Marcus Buckingham and Donald O. Clifton

Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance by Marcus Buckingham

Finding your strengths is important when investing. These books teach you to build on your strengths, what you a good at. Everyone is good or passionate about something. Why not get better at what you are good at?

Another good book is: Opportunity Investing: How To Profit When Stocks Advance, Stocks Decline, Inflation Runs Rampant, Prices Fall, Oil Prices Hit the Roof, … and Every Time in Between (Hardcover)
by Gerald Appel

Most mutual funds do not even keep up the the return on the S&P. That's like 99% of them.

Vanguard Index funds are a no brainer.

A CD is better than a savings account. They range from six months to several years. You cannot touch your money tho until the time limit is up.

Check out this Web site on Direct Investment Plans where you can buy shares directly from companies: (http://www.fool.com/School/DRIPs.htm). Usually no fees and you can buy one share at a time.

Bonds are probably the safest. But they are not for the young. You might try a bond fund. They might return 5 or 6 percent. At 5% a million would return $50,000 a year – not a bad income. Remember, you have to pay taxes on the $50,000.

There are also municipal bonds and the income from them is taxfree especially if you buy them in a state that offers them, but they only pay about 3%, but it's mostly taxfree.

Look into Fidelity sector funds. Buy the top three, then in six months look how they are doing and if not so hot, select the next three that are best. Do this for a few years and you will make lots of money.

Kindest Personal Regards,

Walt Brown
Site Build It Certified Webmaster

http://buildit.sitesell.com/waltera1.html

capecod1@capecod-beaches.com

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wab@theworld.com

P.S. This is a life-long learning process. Reading these books and applying the rules to analyzing stocks that may be good It takes time. Be patient and keep reading and listening. Don't be a sucker and follow someone elses advice. Be your own man or woman. Depend on no one except yourself. You can only get smarter and stronger that way.

P.P.S. Internet has lots of good stuff, for example (http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_conve
Stockcharts.com is very good and their discussion of MACD is one of the best, barring its originator, Gerald Apple, but now we are getting into Technical Analysis and that is not for beginners. But it is an important factor in finding good stocks that are going up and growing. Remember, tiny acorns grow into mighty oaks.

What you are describing is swing trading. (Holding a stock between 2-5 days or up to a couple weeks) While it can be profitable it takes awhile to understand how to do it successfully.

For starters you need to learn how to read candlestick charts and understand how to use moving averages.

You can not be a true "day trader" unless you keep at least $25,000 in your brokerage account. This is why you will find more swing traders than day traders.

Well, it IS possible to do well daytrading stocks–I'm proof of that–but it's true that the majority of daytraders fail. You need to have a good brain, learn as much as you possibly can, develop a good strategy, and have the discipline to carry out that strategy. Without all of these things, you're doomed to fail.

Trading PENNY STOCKS will just increase your chances of failure and is akin to gambling: You may hit it big once in a while, but usually you'll lose.

As suggested, start with a 'Dummies' book or the like. Also, scour the internet for info on daytrading. Investopedia.com, for one, has some good articles on short-term trading and technical analysis.

I think you should use whatever strategy you are good at! Rates of return are not based upon the strategy you trade.

I think it is pretty cool that you are trading at your age. But, no matter what strategy you use, don't take on too much risk, cuz losing trades are part of the game, no matter what strategy you trade.

Good luck!

Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com

Stock investment is the quickest way to make money! This is the general notion of everyone. Have you ever wondered on what strategy the stock market works? Well, if you are a beginner, then this is question you will ask your financial advisors. In order to get the answer to the question, knowing what stock market is, is important. Then you need to how to make some quick money from stock market investing.

Well, making some quick money from stock market investments is not an apt option for someone wants to invest on a short term basis. But it is definitely one of the best options if someone is planning for a long term investments in stock trading. But please keep it mind, risk is not averted in any of the investments: Either short term or long term as nothing is guaranteed in stock trading system. The market may on its peak one moment and the very next may be crashing down! In long term investments, there are less chances of huge loss. Because loss incurred one moment, it can be recovered after the market has again started gaining pace.

Check out the below link:

The traditional definition of a day trader is one who has a 100% turnover rate each day. That means that he/she will buy and sell all shares of a stock before the trading day ends.

A swing trader is a person who holds onto shares for a couple days to a few months.

A position trader is one who can hold onto shares up to a year.

An investor is a traditional long term position holder buying and/or holding shares for several years.

All of the above people are investors more or less it is only that there time horizons are different. All types can make any of the plays/orders you mentioned but again their time horizons are different.
Also of course day and swing traders are almost always technicians i.e. they do no fundamental analysis simply because there is no time to do so. They rely on stock (price) charts looking for trends and indicators.

My $0.02