Seeking day trader info

rtread · #1 (**permalink**) 03-14-06, 10:48 PM

Howdy. I'm new to this forum and took this excerpt from the Community Introduction thread I just posted:

I am seeking knowledge. I am on a learning curve that possibly might get me into day trading in a little over a year. I have a long way to go but that doesn't intimidate me.....I am determined when I set my sights on something. I know the stats....like 80% of day traders lose money. I see that as a challenge to be in the other 20%. I am learning about risks and that will be what ultimately keeps me from getting started. I will have some risk capital initially but will not risk our future in any way.

I would like to get input from anyone presently in the same situation or was once in my situation....either here on the forums or by email. What are/were the obstacles? What would you have done differently? Regrets? Rewards? I'm all ears. Thanks.

Dee-eight · #2 (**permalink**) 03-15-06, 03:09 AM

Have a look at a swing trading style first, maybe. From my brief experience with the Investopedia sims, it seems to appeal to me. It's not far removed from day trading, but with the advantage of not being married to your monitor. Just my two cents, but day trading seems to carry an additional risk of ulcers/adrenaline overdose.

Also, I can see a possiblity of blending styles; a little day trading type, a little long term, and some in between. The ability to adapt to unexpected changes in any position you get into can serve to increase your opportunities.

Edit: BTW, don't let my reply to the NAV question at Investopedia give you a bad impression of me. I sometimes let my sense of humor drive while I take a nap in the back seat.

rtread · #3 (**permalink**) 03-15-06, 08:23 AM

Thanks for the reply d8....I will spend time today looking into swing trading. I hear 'ya about the ulcers...don't need any. The adrenaline (in moderation) sounds interesting, though.

Quote:

Originally Posted by Dee-eight

Edit: BTW, don't let my reply to the NAV question at Investopedia give you a bad impression of me. I sometimes let my sense of humor drive while I take a nap in the back seat.

Ha! I enjoyed your post and got good info from it. But I wasted too much time mulling over what papers in file cabinets do when nobody is looking...

rtread · #4 (**permalink**) 03-15-06, 10:30 AM

Quote:

Originally Posted by Dee-eight

Also, I can see a possiblity of blending styles; a little day trading type, a little long term, and some in between. The ability to adapt to unexpected changes in any position you get into can serve to increase your opportunities.

I reviewed and printed Investopedias five types of trading styles and I agree with your take on it....a hybrid blend would be good for someone inexperienced getting in. Also, I am enjoying the freedom of retirement and not being too tied down. Day trading sounds tied down whereas swing trading allows for a little more freedom. Blending all styles sounds like it has merit but then the inevitable question comes up....Can blending them cause a clash between fundamentalism and technical analysis?

Dee-eight · #5 (**permalink**) 03-15-06, 12:16 PM

As far as blended styles conflicting, I don't see a problem if you do your due dilligence. Any particular style you might choose would apply to an individual equity in your portfolio and not overlap your other holding, methinks.

Changing your strategy on any single stock can be profitable, though. For example, I picked one (simulator) stock looking for a small profit over the course of 3-4 days, and ended up holding it for nearly three weeks. I set a tight stop when it got just above my planned exit point, then reset the stop a bit higher after every market close. Instead of a 3-4% return, I exited with a 9% return.

gijoe9 · #6 (**permalink**) 03-15-06, 10:52 PM

I gues I'll wade in on the discussion bare in mind I lean toward investing as opposed to trading. I also trade in the sim on short term stuff as well as on long term stuff. My best portfolio in the sim returned over 60% in the last year. the core stocks are still there from the start. They are stocks that will be there for the long haul not all of these stocks have shown good growth but they are there to generate income as well as growth. 7% in dividends and 5% growth is still 12% gain. ( due to a glitch in the sim no Canadian stocks have received a div since last yr)I also use my margin to go after short to mid range trades. Like d8 says I learned to take advantage of stops and such to limit losses and to help maintain/take profits.
Another thing I will do to help increase my returns and limit my losses is to keep some of the profits from a trade in stock. I bought 39k shares of c.cll at $2.22 I sold off 29k at 3.82 at a profit of $24200 plus I still had 10k shares worth $38.2k. I later sold 9k more shares for 3.92 or about $35k I still hold 1k shares and they are worth around $5k. I would still have the 9k shares but I sold them to buy another stock that is up 74% now. This strategy fits well with the investor side of me. I hate to sell anything

I try not to get stuck on anyone thing or strategy I like to look for opportunities through fundamental analysis I then take advantage of those opportunities by what ever strategy will work.
Thats my 10 cents worth.
Joe

lehayes · #7 (**permalink**) 03-16-06, 08:55 PM

I am a swing trader myself and I can speak from education on both Day Trading and Swing trading that you can easily transition from one to the other. I use TA methods not much for fundamentals. I am currently trying to build my portfolio up to become a day trader.

I use swing trading information I have learned from www.tmtt.com and I also got my day trading skills from www.trendfund.com. I found day trading to be a very exciting trading event. I can't wait until I reach my $25k limit level so I can begin working it.

The 80% of day traders who take a dive is because they have very little formal training and spend most of their time shooting from the hip. don't let those little statements scare you off. I sometimes think these are propaganda's put out by mutual fund and IRA folks to scare people away from that style of trading.

rtread · #8 (**permalink**) 03-17-06, 06:36 AM

lehayes... I read of the $25k day trading account minimums for "pattern day traders" that NYSE and NASD require. It looks like the SEC approved this stipulation. My question at this point is in addition to the $25k minimum, how much more capital will I need in my account to get into day trading? I know this would be a question for individuals specific to their situation. If I decided I had risk capital of $100k and funded my day trade account accordingly, that means in effect I actually have $75k of capital to work with. Is that the way to look at it?

Another question....if you start out swing trading, which I probably will do, and gradually work into day trading....at what point are you considered a "pattern day trader" and the $25k minimum balance comes into play?

Also, thx for the links...will check them out today.

Thanks d8 and gijoe....I probably was thinking a little too rigidly about styles....need to flex out a bit. Good advice!