Day Trading

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Calico

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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....
 
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.
 
fact during the tech boom to bust.
day trading was the new path to riches.
One of the us online brokers did this research.
 
YOu can trade on several finicial ups and downs with one of the exchanges like betdaq.com
 
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]
 
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!
 
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.
 
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.
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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.
 
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
 
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.
 
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.
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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.
 
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?
 
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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