Day trading

[kabatura]

I've been looking at the stock market a lot lately, tracking certain stocks and I think I could make some money doing some very active trading. However I don't have $10,000.00 right now to throw at the market. Let's say I made 10% on $100 worth of stock. That would be great right, Well on a site like Scott Trade it is $7.00 per trade, $7.00 to buy, then $7.00 to sell means I would lose $4.00 on that trade.

So 2 questions

1. Would an actual broker be a better place to go, or are there better sites, or is it just not worth it without a great deal of money?
2. I know you can buy a portion of a stock, but do you have to buy a specific portion or could you buy say $100.00 dollars of a stock no matter what it's price is?

 

[Gaucho]

lol, is this a joke?

100 bucks................

$14 per trade, means you have to make 14% just to pay off brokerage. The average person makes this in a year, you plan to make this on a day trade? Not gonna happen very often!

 

[Wiesman44]

You can't daytrade w/ $7,000. You need $25,000 or more.

Why don't you open an account at IB. They charge .0035 cents per share.

$100 worth of stock is pointless. You might as well spend it at the bar.

 

[steve38]

Wow, do you have a lot of research to do! And from reading some of the other discussions on this topic, this site is probably not the best place to get solid info.

Trading (especially intra-day) is a tough business and if you think it’s a way to make easy money, you’re going to be very disappointed. But if you want to attempt it, please do yourself a favor and learn all you can, then paper trade until profitable for 3 months, then start VERY slowly with real money and plan on losing it all. I’m not kidding.

I trade index futures for a living and it was a long, hard road to get here. You are probably better off going to Vegas. Good luck.

 

[kabatura]

Wiesman44 thanks for the suggestion. That's one question addressed. Now for the other question, which is theoretical more than anthing. I can edit the post and change the $100 to $1000, or $10000000 if it will make you feel more cozy. The question is can you buy so much of a share. I'll use big numbers, just for you Gaucho. BRK A is at about $130000 right now. Could I buy just $100000 of it, or do I have to buy half or all of it or what. I have been told you can guy a portion of a share.

Oh and Gaucho, I'm very proud of you for basically restating what I put up. But I'm sure you feel more validated as a man now, which is good.

 

[steve38]

Oh, you wanted some real info? OK But first, how do you define ‘very active trading’? If you intend to make more than 4 intra-day STOCK trades a week then yes, according to the PDT rules you will need a $25000 account. But if you intend to hold most of your trades for a few days (swing trading), that does not apply and a couple thousand is enough to open an account and take a shot. Stock is usually purchased in round lots (100 share multiples), but you CAN purchase less than that. So if you have $2000, you could purchase 60 shares of a $30 stock. Anything less than that and the commissions would negate any potential profits. As for BRK-A, I really don’t know if you can buy less than one share, but I can tell you that you could throw a dart and find a better trading stock than that one. BTW, you CAN day trade with $7000. But that would be in the futures markets.

 

[Gaucho]

I restated what you said, because if it didnt sound stupid writing it, then obviously it must sound stupid reading it!

But obviously not!

1. Would an actual broker be a better place to go, or are there better sites, or is it just not worth it without a great deal of money?

Not worth it.

2. I know you can buy a portion of a stock, but do you have to buy a specific portion or could you buy say $100.00 dollars of a stock no matter what it's price is?

No, you cannot buy 100 dollars of a stock no matter what its price.

I am a professional investor (as opposed to a day trader). I trade after fundamental analysis, as opposed to technical analysis. Learn both and decide. Its good you have an interest in the market, but you need to start saving and reading reading reading if you actually want to buy and sell stocks without being raped. Even then, a lot of trading is luck.

I once heard a good quote, relating luck to trading. Its goes as such:

Instead, two speakers discuss how, knowing what we now know, anyone could present himself as a stock-picking guru. "If you put a thousand people in barrels and push them over Niagara Falls," one of them says, "some of them will survive. And if you take those guys and push them over again, some of them will survive. And they’ll write books about how to survive being pushed over Niagara Falls in a barrel."

Here is a link to the whole article, very interesting reading:

http://www.portfolio.com/executives/features/2007/11/19/Blaine-Lourd-Profile#page9

 

[Bible_Belt]

http://www.sosuave.net/forum/showthread.php?t=103238&highlight="stock+market"

I used to day trade for a living in the 90's up until about 2002. The market has changed a lot since then. The opposite stuff tends to work now as opposed to what worked in the 90's, and a greater percentage of the orders being executed these days are from computers executing trading programs. It's not impossible to make money, just very difficult. Although you'll probably lose the money, you can get all the intraday buying power you need with just $5,000.

Here is a list of firms to contact. They all have different account requirements:
http://www.tradersnarrative.com/list-of-proprietary-trading-firms-735.html

 

[MikeYikes122]

I'm not very well-versed in the stock market, but aren't we headed for a recession?

It would seem to me that the best course of action would be to wait for the recession to hit and invest in something stable like Apple.

 

[Gaucho]

I'm not very well-versed in the stock market, but aren't we headed for a recession?

It would seem to me that the best course of action would be to wait for the recession to hit and invest in something stable like Apple.

Most beleive the US is already in recession, however, that it will take 6-12 months for this to show up in the figures, due to time lags. This may be what the correction lately has been about, this belief is already being factored into expectations. Then again, most economists have predicted 15 of the last 5 recessions!

 

[BoredDude]

Then again, most economists have predicted 15 of the last 5 recessions!

Ha nice. Anyways this thread intrested me since I'd love to trade, but I'm a poor college student not willing to lose the money I know I will. But let's say I would want to just mess around with the stock market (no plans on making profit) hands on to learn about everything a little more indepth. What should I do? I was thinking about opening up a small $500 account investing in penny stocks to see how everything works when you actually trade. I have read most of Jim Cramer's books and some others, which seemed to be useless after reading Cramer's books.

 

[Bible_Belt]

I was thinking about opening up a small $500 account investing in penny stocks to see how everything works when you actually trade.

That's not a bad idea, but "penny stock" is a term for the 'over the counter bulletin board' or 'pink sheet' stocks. They are typically priced at a few cents per share. Stay away from penny stocks. It is a suckers' game. What you want are NYSE and NASDAQ listed stocks. The rules are a lot more fair, and the market is ten times more efficient when you trade listed stocks.

 

[BoredDude]

I was thinking about opening up a small $500 account investing in penny stocks to see how everything works when you actually trade.

That's not a bad idea, but "penny stock" is a term for the 'over the counter bulletin board' or 'pink sheet' stocks. They are typically priced at a few cents per share. Stay away from penny stocks. It is a suckers' game. What you want are NYSE and NASDAQ listed stocks. The rules are a lot more fair, and the market is ten times more efficient when you trade listed stocks.

Alright thank you.

 

[Squiggly Sponge]

"Day trading is a mugs' game" - My Corporate Finance Lecturer

Does he know what he's talking about?

 

[Wiesman44]

only stupid and greedy people day trade now adays. If you want to make it trading, you need a PhD in physics or math and then work for a bank prop desk.

Thanks buddy. Guess I'm a stupid, greedy bastard making real good money.


PS: Aren't u the loser that was complaining about depression earlier and is trying to quit coke ?

Guess we should take your advice, since your the expert.

 

[MacAvoy]

Look into currency trading, you can trade over 100 times on margin, so if you have $1000, you can buy up to $100 000.00 in currency. However you'll likely need software if you want to trade short term.

 

[Celadus]

I don't suggest daytrading unless you do a direct access broker. I suggest joining a prop firm like Kershner or some other firm that takes all the financial risk. At a prop shop, your odds are about 5 in 100 of making it. And those who make it put in tons of research. I've basically given up a year and a half of my life to break even.

But really, don't listen to anyone. Just try it. It takes more than 100 bucks though.

Don't listen to academics or corporate finance guys. Two entirely different mindsets and sections of the industry. Someone like wutang can tell you all about valuation but they probably don't have any clue what reading the book is or means. I'm bad with analogies, but a painter can't tell an electrician what he is doing is wrong just because they both work on houses.

In the end, you make money by correcting inefficiences, providing liquidity and figuring out how to read supply and demand.

And anyone can get hurt by leverage. Long Term Capital Management had two nobel prize winners and they royally f'ed up. The thing with quantative investing (what PHDs do) is it works, until it expands in your face. I do a little statistical arbitrage and it works well until it doesn't. First 6 months of my career, I was doing a lot of it, then boom. Hello volatility. Took another 6 months to figure out how to make money out of volatility.

 

[Wiesman44]

I don't suggest daytrading unless you do a direct access broker. I suggest joining a prop firm like Kershner or some other firm that takes all the financial risk. At a prop shop, your odds are about 5 in 100 of making it. And those who make it put in tons of research. I've basically given up a year and a half of my life to break even.

But really, don't listen to anyone. Just try it. It takes more than 100 bucks though.

Don't listen to academics or corporate finance guys. Two entirely different mindsets and sections of the industry. Someone like wutang can tell you all about valuation but they probably don't have any clue what reading the book is or means. I'm bad with analogies, but a painter can't tell an electrician what he is doing is wrong just because they both work on houses.

In the end, you make money by correcting inefficiences, providing liquidity and figuring out how to read supply and demand.

And anyone can get hurt by leverage. Long Term Capital Management had two nobel prize winners and they royally f'ed up. The thing with quantative investing (what PHDs do) is it works, until it expands in your face. I do a little statistical arbitrage and it works well until it doesn't. First 6 months of my career, I was doing a lot of it, then boom. Hello volatility. Took another 6 months to figure out how to make money out of volatility.

amen to that

 

[Celadus]

http://www.youtube.com/watch?v=rCtQL5b_rCM

The emotional roller coaster of being a trader, haha.

 

[Gaucho]

Just some advice, I would stay out of the market at the moment or start shorting BIG TIME! Because the US market is set for a HUGE smashing!!!!!! Not even Barry Bonds and Babe Ruth combined could hit as many sixes as what is going to be put on the US stockmarket! Expect the worst since the 20s!