Day Trading

[Bullaholic]

I know what "Day Trading" is, but I don't know a lot about the process other than what I hear from some friends now and then. I hear this is not a game for the timid, poor, or un-knowlegable, yet I am continually attracted to give it a go because I spend all day in front of a computer, anyhow. Further, I don't know if the current economic climate is right to try something this risky? Thoughts?

[LE Dad]

Originally posted by Bullaholic
I know what "Day Trading" is, but I don't know a lot about the process other than what I hear from some friends now and then. I hear this is not a game for the timid, poor, or un-knowlegable, yet I am continually attracted to give it a go because I spend all day in front of a computer, anyhow. Further, I don't know if the current economic climate is right to try something this risky? Thoughts? Bull, I personally know 1 person that tried day trading. He went bankrupt. Then there was the guy in Atlanta a few years back that went Rambo on an office full of people after his venture failed. So just based on that it would scare me some, but you could be the next Warren Buffet???

[IHStangFan]

I'm not exactly a "day trader" but invested a little in the market last spring just to test the waters. With proper research there is money to be made. For example....with a little reading, and whatnot...I felt Oskosh (builds the military vehicles) was a good venture....I bought it at $11 a share last summer....sold it for $40 a share a few days ago. It's not rocket science, you just have to do your research and understand what you're reading.

Hope that helps. I'm no expert by any means.

[Tx Challenge]

Ok I will give this a shot. I am not and have never been a "day trader" by definition. I have played the market for the past 25 years both long and short term.

All I can do is give you my take. The market is ruthless esp. the short term market. To me long term is a bit easier, but the gains (or losses) are not as fast. Since you mentioned day trading, I will give my opinion. Take it for what it is worth.

If you want to "flip" stocks, the most important thing to do is to focus on a few stocks or a certian sector. DON'T get too broad. Find a few and follow their trends. Again just a few. After that, decide what you would be happy with as far as gains OR losses. Yes both are important and STICK with this. Greed will bite you. You can always jump in and out. Dont expect to always sell at the top or buy at the bottom.

Take taxes in consideration. Short term gains are taxed different than long term. I can not stress that disiplin is the main key to success. Every day or every trade is not going to be positive. It is stressfull. Keep all that in mind....Good luck!

[Bullaholic]

Thanks, gents....maybe Farmer and some others will offer up some insights, also. I doubt that Old Card is a "day trader", but I know he likes to make money.

[NateDawg39]

I might look into it just to see what it is all about. Im not sure if it would be for me or not though.

[Tx Challenge]

Originally posted by Bullaholic
Thanks, gents....maybe Farmer and some others will offer up some insights, also. I doubt that Old Card is a "day trader", but I know he likes to make money.

Bull, as long as you take emotion out of it, and do your research you will do fine. That is a lot harder than you think.

[BaseballUmp]

I had an economics teacher in hs that did/does it and im pretty sure hes doing quite alright. that was our project one 6 weeks. we started with i think $10,000 and we had to buy stocks in the morning and sale at the end. granted there was a bit of cheating(buying multiple stocks per day to see which stock made you the most) but there were a few of us that made over 5 million...it was pretty fun buying a stock at like $.14 and if it even went up a penny and you had all your money into it you made a killin' it definately got me interested in it later on down the road when ive got some money to play with

[Tx Challenge]

Originally posted by BaseballUmp
I had an economics teacher in hs that did/does it and im pretty sure hes doing quite alright. that was our project one 6 weeks. we started with i think $10,000 and we had to buy stocks in the morning and sale at the end. granted there was a bit of cheating(buying multiple stocks per day to see which stock made you the most) but there were a few of us that made over 5 million...it was pretty fun buying a stock at like $.14 and if it even went up a penny and you had all your money into it you made a killin' it definately got me interested in it later on down the road when ive got some money to play with

Yes, a real Day Trader cleans the slate each day. I have never done that. Many times you can buy in and out several times a day though. I will say this about penny stocks. I have traded them but they are very risky. When trading short term or roller stocks, be sure to look at volume. Esp penny stocks. If a stock trades 100k shares a day and you are trying to push 25k, think about it...

[BaseballUmp]

Ha yea it wasnt the most legit thing ever I mean stock goes up a penny keep it, goes down a penny find another of your stocks you got as back up and use that...but yea they are extremely risky

[Necked]

If your talking about true day trading (multiple trades a week), you will run into a lot of rules you'll have to follow, including the maintaining of a $25000 line of equity. Look up "Pattern day trader" for more info...

[BullsFan]

KEEP GOOD RECORDS, or the taxes will eat you alive. And e*trade records are the hardest to decipher. I think Scotttrade has better documentation as far as taxes go. If you do use e*trade, be sure and keep individual documentation on each transaction, because the 1099B they give you at the end of the year does not always include cost basis.

[Farmersfan]

Old Cardinal would be the one to explain much about this subject. Every aspect of my training indicated that this kind of trading was a fools game. I always believed in buying quality and buying for the long haul. Recently I have been trying to re-train myself to look at OTC stocks and Pink Sheet stocks. Old Cardinal has been very helpful in this .
Also remember, as was already posted, that until it changes long term capital gains are taxed at only 15% but short term gains are at a 40% tax rate. (I think).

[BILLYFRED0000]

Originally posted by Bullaholic
I know what "Day Trading" is, but I don't know a lot about the process other than what I hear from some friends now and then. I hear this is not a game for the timid, poor, or un-knowlegable, yet I am continually attracted to give it a go because I spend all day in front of a computer, anyhow. Further, I don't know if the current economic climate is right to try something this risky? Thoughts?

I did a little of it in commodities and it is difficult to be successful but it can be done. I had lost about half of my cash before I really started to understand how it was working and made it all back before the telecom crash in 2000 and the y2k layoffs took the money out of my hands.

[Farmersfan]

For every single stock that goes up there is another that goes down. Buying pressures and selling activities also will effect stock price movements. The vast majority of people understand that to make money in the market you need to buy low and sell high yet when it is THEIR money they let emotions rule them and they will jump onboard when a stock has already increased in value enough to get their attention and then they will sell after the stock has declined enough to cause them worry. The key is to get ahead of the movement and not simply follow the movement like most do!

[Bullaholic]

How do you avoid a bunch of transaction fees if you are trading a lot daily?