# Day Trading



## Calico (26 Sep 2007)

Does anyone do this? How did you get started? Is it possible to make a small living from this while insofar as is possible, hedge losses by placing stop-loss options? What brokers, applications etc. are recommended? What is the best way to learn how to day-trade? Is it possible to do it virtually for a few months?

Sorry, I know these are all specific questions, but I am interested in the general debate. It seems to be that with a bit of practice and plenty of time (and capital)  it should be easy enough to make some kind of return but then of course a fool is easy parted with his money....


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## z106 (26 Sep 2007)

Yes - you can virtual trade with a ot of companies.

However - day trading is considered very risky.

The reason being day trading is too short a term to allow fundamentals to be factored into the price.

With day trading it is purely speculative. Basically high risk gambling.

You could always try technical analysis and tade over a longer term.


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## markowitzman (26 Sep 2007)

90% of day traders lose 90% of trading capital in first month.


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## Guest120 (26 Sep 2007)

Calico said:


> hedge losses by placing stop-loss options?


Putting stops in place isn't a hedge.



markowitzman said:


> 90% of day traders lose 90% of trading capital in first month.


Fact or opinion?


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## markowitzman (26 Sep 2007)

fact during the tech boom to bust.
day trading was the new path to riches.
One of the us online brokers did this research.


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## Guest120 (26 Sep 2007)

markowitzman said:


> fact during the tech boom to bust.
> day trading was the new path to riches.
> One of the us online brokers did this research.


Not really relevant to the OP now then.


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## DublinAgent (26 Sep 2007)

YOu can trade on several finicial ups and downs with one of the exchanges like betdaq.com


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## extopia (26 Sep 2007)

markowitzman said:


> One of the us online brokers did this research.



Which one was that? Any sources?


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## ixus (26 Sep 2007)

I like reading the article's in the SBpost by Proinsias O'Mahony.

Here's one, there are quiet a few with discussions about day trading if you search through the archives.

[broken link removed]


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## markowitzman (27 Sep 2007)

from memory I think it was datek online.
in answer to your qs calico.......
Yes is risky but if you have strict trading discipline and focus on capital preservation your chances of success improve.
You need level 2 quotes and a good online broker for fast fills.
Routing is important also to speed up trades.
Yes paper trading is possible.
Your chances would improve if you subscribed to one of the advisory sheets as once a buy is initiated you would have volume and momentum on your side.
For what it is worth I have had most success trading options on a regular basis due to the leverage effect. Looking for quarters on stock trades is like watching paint dry in comparison.
Major warning!!!
This is only for money that you do not need and is not for the faint hearted!


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## markowitzman (27 Sep 2007)

http://faculty.haas.berkeley.edu/odean/papers/Day Traders/Day Trade 040330.pdf
this study shows less than 2 out of 10 make money day trading.
and this finds as well as 70% plus losing money they also loose all their trading capital....... [broken link removed]


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## IFT (27 Sep 2007)

edit...


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## command (27 Sep 2007)

if you want to aggressively day trade try doing it on the far east markets. The public have gone nuts for it much like it was in the west during the cot com bubble days.

Its super high risk but they are markets that are moving. 

To attempt to day trade in ireland is extreemly difficult, and I would not advice anyone to consider doing it. The markets react to newsflow. A certain amount of share price movements are priced into a share before the news even breaks.

Unless you know your stuff it is very difficult to second guess it. You need an edge on the market to consistently make money short term. Say for instance you worked in the oil business then you may be in a better position to guess whether a new round of test drilling by Tullow in Amillionbarrelsadayistan is likely to be successful. 

Try picking a handfull of companies and monitor their activity and newsflow over a few months. I reckon you should send at least 6 months doing some sort of "vitual" trading first. 

You'ld be a brave man to try day trading with your own money.


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## Kluivert (27 Sep 2007)

IFT said:


> I would advise against it aswell. Buy ( over time to achieve a better mean weighted average ) and hold for the long is the best strategy.


 
Rome wasnt built in a day...is the phrase that springs to mind. 

Google "bullbearings" and give fantasy trading a go. 

I agree with the above post. An hour or two at the weekends review positions and charts and then deciding on a trade should be enough, place the order for Monday monring and return to your positions the following weekend.

I have a big interest in trading, am an accountant now but often wondered what it would be like working in share dealing or a broker. 

You bet what you can afford to lose.


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## charttrader (27 Sep 2007)

Markowitzman
There's no way that 90% of people lose 90% of their money in less than a month.  Even the dumbest trader would need a little more time than this!  

There's no doubt that the vast majority of people lose, however.  This link provides details of many studies
http://www.investorhome.com/daytrade/profits.htm

Re. the OP's questions.  I do a lot of day trading and it's not easy.  Psychologically, it's very taxing.  Most people will find it easier to make money through short-term trading (2-10 days) rather than day trading.  If you haven't a record of consistently profitable s/t trading, you'd be mad to think you could do so day trading.  

If you want to day trade stocks, then you have to choose US markets. Stamp duty and commissions make Irish/UK/Euro stocks unfeasible.  You can day trade the UK and European futures markets (no stamp duty there) but you'd want to be very experienced to consider futures trading - when day trading futures, you're up against pros who do it for a living.

The obvious day trading broker is Interactive Brokers.  Best commissions, best executions, solid platform aimed at active traders.  They also offer a simulated platform (although it's not the same thing when real money is on the line).  IB charts are awful, however.  QuoteTracker.com offers free and excellent charts - many traders use the IB data feed in conjunction with QT charts.

All US brokers demand a min of $25000 to day trade stocks.  You are allowed intraday margin of 4:1 - that is, you can buy $100,000 worth of stock if you have $25000 in your account.  

With futures, most brokers will allow you to day trade with a min of just $5000.  Futures are very leveraged - one Dow futures contract controls about $70,000 (Euro and UK futures are similar).  It costs about $2 to buy/sell a contract (again, commissions for Euro futures with IB are similar).  

As an earlier poster mentioned, the real volatility is in far east markets at the moment.  IB allows traders to trade global markets, so it is an option, but substantial profits (or losses) are also possible with the more relaxed European and US futures markets.

Stop losses are a must.  You're doomed if you day trade without them.  That said, inappropriate stop loss placement can see your account die by a thousand cuts.  

For the most part, conventional fundamental analysis is useless in day trading.  You need a strong technical awareness.  The best intro to day trading charts can be found at [broken link removed] - 100 charts or so detailing entry, exit, etc.

Would be better to read some of Trader Mike's material before you try the above charts - they do presuppose a certain degree of knowledge.  Check out 
 [broken link removed]

Trader Mike's site has a load of info for newbie traders in general.  He talks a lot about money/risk management, which is the most crucial area of day trading.

Would not bother investigating level 2 quotes - a lot of games played there.  

www.trade2win.com is a forum where you’ll likely find lots of your questions answered.  There are also a ton of good day trading blogs out there.  

If you’re serious about day trading, I would do as much research and practice as possible before committing any money.  

Regards


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## MichaelDes (27 Sep 2007)

I would consider spread betting. It's easier to manage and tax free. You can could also engage in arbritage either risk or statistical- it is something in the past I have exploited and made money on very very quickly (but can be time consuming)- especially the money markets. You could figure out LCTM's strategy and improve the model. Money would be made through it - I wish.


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## z106 (27 Sep 2007)

MichaelDes said:


> I would consider spread betting. It's easier to manage and tax free. You can could also engage in arbritage- it is something in the past I have exploited and made money on very very quickly (but can be time consuming)- especially the money markets.


 

I know what arbitrage is.
I have never been lucky enough to spot an opportunity though (Haven't looked very hard either !)
Do you have a couple examples of arbitrage if u don't mind ?
I'm curious.


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## markowitzman (27 Sep 2007)

charttrader are you making aliving from day trading?
Do you have a weekly/daily goal and once met do you leave it at that for day/week?


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## MichaelDes (27 Sep 2007)

below


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## MichaelDes (28 Sep 2007)

MichaelDes said:


> Capital spreads is a one company to use - it's fairly self explantory & provides probably the best value spreadbets with auotmatic stop margins or else http://www.etradeprofessional.co.uk/spreadbetting/index.html for money market plays. The current market turmoil is a perfect time to spreadbet when the Vix index is high. When the Vix is high then different positions are taken by many different people on where the market is heading. As I say the margins are tiny so unless you are Warren Buffett, it's only for a bit of pin money. As someone earlier in the thread mentioned the Far East market such as Ho Chi Minh index - up 73% YTD. Huge specualtion plays there. By the way anyone know the P/e's at the moment in Vietnam (posted thread earlier) are they as bad as the Shanghai or Shenzhen Stock Indexes. An example at present to bet on - there is a certain type of fruit that makes MP3's, a lot of uncertainity which way it will paddle in next few weeks - slashing prices of new product etc.
> 
> Finally did Sports Arbitrage before this, purely for the crack of screwing bookies - margins can be up to 10% on outcomes. They catch on very quick though so have to be clever with bets.


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## charttrader (28 Sep 2007)

markowitzman said:


> charttrader are you making aliving from day trading?
> Do you have a weekly/daily goal and once met do you leave it at that for day/week?



I'm doing well from trading (not just day trading - sometimes hold for days/weeks) and devote most of my time to it but I do have income from other sources.  I wouldn't like to be solely dependant on trading - not every week is a pretty one.

I hope to make a certain amount of money each week but I don't stop trading if it's met.  Take what the market gives you.  The volatility in early August meant I was often making in 15-30 minutes sums of money that would ordinarily take a day or more.  The opportunities were fantastic and it would have been dumb to stop trading just because I had made a certain amount of dollars.  

Besides, you're not going to make money every day/week, therefore you need to compensate with some exceptional weeks.  

I try to stop trading if I lose a certain amount of money on a given day or if I've had a number of consecutive losers.  Losses make you do stupid things (revenge trades, etc). In fact, I've heard of some traders using software to shut their platform down for the day if they've lost x amount of money. If you're losing, it's generally better to take some time off to clear the head.


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## markowitzman (28 Sep 2007)

how are you taxed for gains?


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## joe sod (28 Sep 2007)

charttrader said:


> I'm doing well from trading (not just day trading - sometimes hold for days/weeks) and devote most of my time to it but I do have income from other sources.  I wouldn't like to be solely dependant on trading - not every week is a pretty one.
> 
> I hope to make a certain amount of money each week but I don't stop trading if it's met.  Take what the market gives you.  The volatility in early August meant I was often making in 15-30 minutes sums of money that would ordinarily take a day or more.  The opportunities were fantastic and it would have been dumb to stop trading just because I had made a certain amount of dollars.
> 
> ...



so basically its like gambling, if you are losing you leave the casino


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## charttrader (28 Sep 2007)

Have to fill out a w8 ben form to stop US authorities taxing you (everyone with a US account has to, not just day traders).

Re. Irish tax, normal income tax arrangements apply once trading becomes your main source of income.  If it's not your main source of income, just pay CGT on your gains (that's what I was told anyway).

Joe Sod - your casino comparison puzzles me.  I was talking about the need for discipline and keeping a clear head rather than blindly thinking about the money.  If you're feeling frustrated or angry because you've lost money on a few trades, then you turn off your computer and stop trading.  Trade when the opportunity is there and when your emotions are in balance, not because you want to get your money back.  

I'd give the exact same advice to any trader/long-term investor.  An 'investor' acquaintance of mine lost money on Smart Telecom.  Bruised from the experience, he was itching to 'get his money back' asap and immediately bought other stocks.  He should have waited for an  opportunity to arise but he let his ego and his finances dictate his actions. People do this the whole time and it's dumb as hell.

That aside, 'gambling' is a subjective word anyway.  The notion that all investors are prudent and all active traders are gamblers is a silly one.  Much of what passes for investor analysis is little more than idle speculation, full of 'coulds' and 'shoulds'.  Just look at the newspapers - full of fortune telling and talk about how stock xyz 'is worth a punt for the long term'.  Little assessment of risk, no talk of stop loss orders - it's just amateur speculation.


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## MichaelDes (28 Sep 2007)

charttrader said:


> Have to fill out a w8 ben form to stop US authorities taxing you (everyone with a US account has to, not just day traders).
> 
> Joe Sod - your casino comparison puzzles me. .


 
Charttrader,

Would'nt hindsight be a wonderful invention. You seem savy enough to make it work - Well Done!


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## markowitzman (28 Sep 2007)

I was told by accountant if I was trading it would be income tax rather than cgt and like you charttrader it would not be my primary income source.


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## charttrader (28 Sep 2007)

I'm not a tax expert but that was the advice I was given.  If you check the forums at trade2win.com, you'll find a section on trading and tax.  Many differing opinions there, including conflicting advice from diff. accountants.  Admittedly is a UK site but am guessing that a lot of confusion exists in Ireland also.  In any case, I don't think revenue officials are going to get too hung up about the issue.


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## z106 (16 Jan 2008)

so charttrader - how are u getting on these days?

Still at it?


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## charttrader (18 Jan 2008)

It's hard not to day trade in this market Qwertyuoip, massive intra-day movement.


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## z106 (18 Jan 2008)

Well ya - but presumably you must pick the correct direction too.

Out of curiosity - if you were to sum up your trading strategy in 2 lines what would it be?
DOe sit following moving averages or is it fundamentals or what?


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## charttrader (18 Jan 2008)

I tend to trade with the trend, ie, if the market is down sell bounces to resistance areas, if up, buy dips to support.  Intra-day exponential moving averages are very useful indicators, otherwise I mainly look at price and volume.
I don't have one strategy.  If the market is choppy - as it often is - I'll trade differently.  I don't look at fundamentals as my time frame is extremely short.


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## z106 (18 Jan 2008)

Do you do this for a living?


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## charttrader (18 Jan 2008)

No.  I do a lot of day trading but I wouldn't like to be dependant on it.


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## beekeeper (19 Jan 2008)

A question for charttrader and other day traders.. do any of you trade FX or is it purely equities ?


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## coola (22 Jan 2008)

charttrader - where do you get all your info i.e. resistance points etc. support points etc


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## askU (22 Jan 2008)

charttrader said:


> I'm doing well from trading (not just day trading - sometimes hold for days/weeks) and devote most of my time to it but I do have income from other sources. I wouldn't like to be solely dependant on trading - not every week is a pretty one.
> 
> I hope to make a certain amount of money each week but I don't stop trading if it's met. Take what the market gives you. The volatility in early August meant I was often making in 15-30 minutes sums of money that would ordinarily take a day or more. The opportunities were fantastic and it would have been dumb to stop trading just because I had made a certain amount of dollars.
> 
> ...


 
*What kind of **Strategy do you use?*


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## charttrader (22 Jan 2008)

No, I don't trade forex.  Sometimes stocks, mainly index futures.

Re. support and resistance, you will notice how certain points are watched by traders as the day progresses.  It might be the previous day or week's  high/low, it might be the morning high/low, it might be the top or bottom of an hour long trading range, it might be a moving average on a five minute chart.  You use it to try and get a good entry or to guage where might be a good place to take profits.  Sometimes it works, sometimes it doesn't.  

Re. strategies, like I said earlier, I don't have one strategy and I trade differently on different days.  The current market is completely different to the market of, say, a year ago.

Anyone looking for more concrete and detailed info should check out some trading blogs. Here are a few resources, some of which I mentioned earlier;

 [broken link removed] - 


 [broken link removed]

http://www.traderjamie.blogspot.com/

For specific questions, try out www.trade2win.com


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