Stock Trading and Other Things

Tips on profiting in day trading in the stock market?

I've gone through tutorials online about how to make money in the stock market due to the small rises and falls throughout the day in stock prices. All these tutorials mention the same thing: to sell when the stock goes up slightly. This is good advice because they always seem to go back down and up that same small amount in the shorter term. However, they fail to mention one major thing. That is the comissions and trade costs. My brokerage account charges $7 for every purchase and every sell, plus more for comissions.. right off the principal if I don't make enough to cover all that! This makes me really wonder how day traders make money, I mean it seems almost impossible.

Public Comments

1. you don't know near enough to be betting like this.

stop


get some much more serious education in the subject or don't play the game.

one teacher i had in this area used to open his intro seminar by claiming that 49 or 50 new traders would leave the markets within two years after having lost some, all, or more than all of their capital.

2. 3 Important facts for you.

1. They want you to buy and sell often because that's how they make their money. They could care less whether you make money.

2. The great majority, (emphasis on "great"), of day traders do not make money.

3. Have you heard the term, "efficient market effect"? The general rule is that you cannot react fast enough to beat the market because, by the time you've figured out your move, the market price has already adjusted to nullify your decision.

What you should do is diversify, do not take stupid risks, and don't quit your real job.

3. "Day trading" for amateurs is a suckers' bet. It's encouraged by the brokerage community just for that reason: so they can profit on commissions, not so YOU can profit. Unless you have lots of money and real knowledge, you will lose in the long run.

4. I don't know what tutorials you're watching but the advice you're getting makes no sense.

To day or swing trade profitably you need to;
Have a mastery of trader money management including but not limited to;
position sizing techniques
entry & exit techniques
stop order placement
target techniques
Technical Analysis (more than a grasp.... fully developed trigger plans, etc.)

It takes, on average 3-5 years to learn the above. Reading countless books, attending webinars & subscribing to periodicals aimed at day traders (Technical Analysis of STOCKS & COMMODITIES Magazine as an example: http://www.traders.com

95% of the people that try day trading fail in less than a year. Swing trading is a little better @ 90% failure rate.

The better platforms charge by shares. It costs me $3 to buy 300 shares with one of my brokers, the other charges $1.50 for 300 shares.... I use the first broker the most because their platform is so good.... it's also a "negotiated" rate.

You should attend the TradersExpo in Las Vegas this November. It would open your eyes to a new world.

Here's two swing traders you can learn a lot from;
http://leighdrogen.com/
http://joefahmy.com/
Watch their videos when you can.

Good luck..... start reading as many books on trading that you can... like;
Mastering The trade
Trading In The Zone
Stock Market Wizards
etc.

5. If you had Scottrade, they charge you $7 to buy and $7 to sell, which is the commission. Now if you buy 100 shares, the commission is only $0.14 per share but if you only buy 10 shares at a time, you are looking at $1.40 per share commission before you make a profit.

So its a matter of scale, which is why it's suggested that you have $25,000 to be a day trader (or more).

If you trade stocks that on average have over $1 range each day, you have a better chance of getting in and out each day.

If you study a stock's patterns each day as well as that industries sector's performance, that may help you also.

You must really spend time learning about the market first, while you Virtual trade (practice).

Lastly, stocks on the 52 week high list, keep making new highs so selling them may not be the best strategy.

As a seasoned day trader, having a trade plan is essential for profitable trading. You can make a lot of money by taking small wins and limiting your losses. Good Luck!

6. Just don't do it. Don't waste time studying something experienced people tell you not to do. You will lose your money as everyone else does that has taken this path. Don't point to the one guy out of 200 that has been successful due to luck mostly. Experienced investors are knowledgeable people who have studied diligently or have learned through personal costly choices along the way. If day trading was the way to go don't you think the smart people would be doing it. Don't be foolish. Listen and be thankful for people who know better than you and want to help you. I was a day trader myself many many years ago. I paid dearly. I am not alone. It's easy to figure how much you make if you buy a block of stock and it goes up a little and you sell for profit. The problem is every purchase will not result in an upturn in price. If it goes down how long are you going to hold and how much are you going to lose. Think of trades as wins and losses. Remember once you lose you need more than one win to even break even. Now the odds are against you. And you have less capital to make your next wager if you will. In investing, like gambling, you want to reduce the odds against yourself. Day trading does the opposite of that.