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colivo1
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I want to start day trading. I've done my homework on day trading and I have saved up money to invest. I lack experience. It all looks clear and simple in my head but in reality I know its not like that. I know that there is much to learn than I know (the basics). I am willing to learn and possibly become a great day trader if anyone is willing to mentor me.
Posts: 4 | From: Oklahoma City, OK | Registered: Nov 2003  |  IP: Logged | Report this post to a Moderator
microdaytrader
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FIRST THING YOU NEED TO DO IS PAPER TRADE RECORD ALL YOUR TRANSACTIONS
HAVE AN IN AND AN OUT PRICE BEFORE YOU MOVE
DO LOTS OF DD
HAVE A REASON FOR GETTING IN NOT JUST BECAUSE SOMEONE ELSE SAYS SO
GOOD LUCK

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COOLORANGEFREEZE
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I've only been here a few weeks. And I recommend that you start small... amounts you can afford to lose. And check this board everyday as there is tons to learn from the people here... both good and bad. The other thing is to do your own research. Verify data. GOOD LUCK!!!
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Jeremy
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quote:
Originally posted by COOLORANGEFREEZE:
I've only been here a few weeks. And I recommend that you start small... amounts you can afford to lose. And check this board everyday as there is tons to learn from the people here... both good and bad. The other thing is to do your own research. Verify data. GOOD LUCK!!!

Bad thing is, day trading small amounts, your commissions will typically eat into most of your gains... if you have any gains.

If you're day trading say 100 or 200 bucks at a time, more often than not your gains are going to be about 5% or so, and that's assuming all of your picks make money and not loose money. What is 5% on 100 or 200 bucks? 5 or 10 dollars of profit. What are commissions at most brokers? 5-12 dollars. So a round trip trade on one security is going to cost you 10-24 dollars.

Well, do the math.. most likely your either making very little money, or losing money on a stock that went up 5%. And that is before taxes!

Sure, you may find a big winner occasionally that goes up more, maybe 10, maybe 30%.. but you won't be doing this on all trades. And remember to factor in the trades you pick that may not make any money, or loose you money. Chances are, daytrading small amounts (hundreds of dollars) will not make you anything that is worth your time.

To really make daytrading worthwhile, you need to be throwing down a few thousand per trade, and if you aren't comfortable with doing this, I would really suggest a way of investing other than day trading.


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colivo1
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Thank U all 4 your comments + suggestions. I greatly appreciate it.

? What does "DD" stand 4? What other abbrev.., R there 4 me 2 NO?

Paper trading sounds like a good route but how do I go about finding potential penny stock gainers 2 invest this "paper" money? Your answer might B RESEARCH but by the time I am done researching I might have missed my window of opportunity. At the moment, I am TRYING 2 study stock charts/indicators. R these benefical tools 4 a day trader or a waste of my time? R there software programs (using technical analysis) that flag U when 2 buy/sell a stock? That would really boost my research department.

I NO people post daily stocks 2 watch out 4 but time is not on my side at the moment.
Can someone recommend a stock to the best of their trading analysis?

Jeremy U have a point. I don't have $1k+ 2 invest, so anything less would only benefit my broker + the gov't unless I hit the jackpot by investing in a stock that went up 600%+. Because I lack the money to reap true profitable status I will start with what I have + build from there. The question is what is the plan?

Should I:

(a) invest $500 in a pennystock, profiting barely nothing like Jeremy says?
(b) invest $500 in a pennystock and wait for it to reach a predeteremined percentage with porfitable gains?
(c) other

I do appreciate all your help. I am trying to learn the ropes. I do want to be a great day trader. It might not happen to today or even tomorrow but when it does I can thank you all.

Thanx


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Jeremy
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As far as research.. there are lots of websites, books, and tools to get you started. One of the first things you should become familiar with is chart reading. This way you can glance at a chart for about a minute and instantly have a fairly broad view of the stock, it's history, trading patterns, and possible profit potential.

Once you can find stocks that "look" good on the charts, you basically just need to do a little more research on the company. See what current news releases are out there, check out a few of their latest SEC filings, see if the general trend is positive or negative regarding the company.

The rest is all up to the market and a little bit of luck to make you some money

Regarding how to invest your money, I can't really tell you how to put it to work best, but you will definately benefit much more buying a stock or two and holding it rather than trying to time your plays in and out every day, eating into your profits with commissions.

There are a lot of stocks out there that can make you 10-25% in a week or two. You may want to find one and set some goals like that. I mean that 500 dollars could turn into 600 dollars in a week or so.. maybe more, maybe less. But you would be a lot safer to buy and hold at least for a few days and then sell, taking some of that money and moving on.

Depending on how much you have to spend, you may also want to consider splitting your money up. Maybe invest half into a solid growth stock, not a penny stock. Something that you can keep in your portfolio for a few months or a year, kind of a safe haven. Over time, that money too can possibly see a good 25% in 3 or 4 month's time.

This way you have a bundle of money working for you safely, while you are getting used to trading pennies. Think of it as a high interest bank account (with the possibility of it still going down).

But with limited funds, the general rule of thumb is you want to trade less, and hold more. If you make 10 trades in your first month with your 500 dollars at 10.99 commission, you're spending 110 dollars that month alone just to try and turn your 500 bucks into something much more. That means you'd need to get a 25% return just to break even... or, you could trade just once or twice in a month, spending 20 bucks, and retain almost all of that profit.

It is a tangled web with so many decisions, and things change so fast once you actually get your money in the market so nothing is ever set in stone. I would just advise to trade less and build up your portfolio value slowly, because unless you sink your 500 bucks into a stock that is super lucky and gives you a quick 100% in a day or two.. you will be quickly discouraged.


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COOLORANGEFREEZE
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The first time I jumped into day trading, or even short term positions, I had little capital and I was burning it up with the commissions based on buying/selling with the negative force of emotion as my motivator. BIG mistake.

I do way more research now, coupled with a more streamline attitude. Enough capital is also very "key". And the most important thing to do is study.

For me the buildup of my skills and portfolio is a slow process. But it is a process that can payoff in a BIG way within just a few years. And it's fun too... when you don't lose


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jraver
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i started with 400 bucks in august...bought cypt @.125....sold at 1.71....then bought rdvw @.65 sold @ 1.24...took 500 out of the account...but have had dead money since..in @.175 on msgl....and .275 on oplo.so you guys are half right...you can "day"trade with small amounts if you can afford to wait alot of days between trades. i choose my stocks mostly by the volume and the hype...i didn't really care about the fundamentals of the company since i didn't plan to own it long
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colivo1
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"trade less, and hold more" sounds like a functional plan for a beginner like me who wants to make money, not lose money. I am a patient person and can wait a while. So if I have to hold on to a stock for a week or 2 then so be it. I think I will do that till I reach a good amount in the thousand dollar range where I can profit faster. Sounds good?

At the moment I am researching CYKY. So far all I have done is looked at its chart. It seems to be moving in a slow upward trend. Do you think this stock would be a good stock to start off with. I know I will have to wait a while to see profitable gains.

Well, thanks for all your inputs. I have learned a lot in just a few days.

P.S What does "DD" stand for?

Thanx


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JJ
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DD = "Due Diligence"
Posts: 16 | From: Manassas, VA, United States | Registered: Nov 2003  |  IP: Logged | Report this post to a Moderator
   

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