I have been doing some day trading lately (NASDAQ/NYSE) and making a decent sum just about every day regardless of whether the market is up/down.
I take both long and short positions as the circumstances of a stock demand. The other day I made 400$ in 15 minutes flat. Couldn’t believe it.
Wondering if anybody else out here is into day-trading (preferably in the US). Would like to exchange some stock ideas.
Re: Never thought making money was so easy
I guess you got lucky.. How many shares did you buy, and how much did u spend?
Re: Never thought making money was so easy
You do have to realize you can loose that and more in similar times.
Re: Never thought making money was so easy
I do a lot of day trading both on UK and US markets but most of the times on indicies. Dow mini being my favourite.
Re: Never thought making money was so easy
Ok..here's my strategy...which I learnt the hard way.
My basic criteria for choosing a stock for LONG POSITION (Note : this is for day trades or short-term trades only )
I love big company stocks which have suffered a major plunge recently(eg YHOO currently). I also try to make money on dead-cat bounces...eg on stocks which have been beaten to pulp and are not likely to go down any further.
I tend to keep away from volatile stocks as much as possible (though the lure of profit from these stocks can be tempting). I learnt my lesson after I bought NFLX at 19 bucks..it was downgraded by some analyst...and the stock plunged to 14 bucks..I panicked...and sold the stock at a loss. The stock is now trading at 25 !! So now, I just keep away from growth companies like NFLX which are difficult to predict.
I have come to believe that if you maintain basic discipline, making money is not that difficult in stocks. The key is not to stretch your luck...keep a stable head always...and resist temptations.
More later....
Re: Never thought making money was so easy
Trading in stocks is inherently risky..I fully understand that…but I try to shield my positions as much as possible. Also, since I do “trades” and not really “investing”, I am unaffected by macro-economics. Sometimes I hold a position for less than an hour.
Like I mention above…I dont buy companies like TZOO or SGTL (check out their 52 weeks range) even though they can look very attractive for day-trading at times…I only buy solid comapanies with beaten-down stocks.
For SHORT POSITIONS, I analyze and look for companies in mid-air descent.
Re: Never thought making money was so easy
Ehsan, would you please tell us why you think investing in indices is better than investing in individual stocks esp from short-term trading perspective.
Re: Never thought making money was so easy
^diversification of risk for starters :p
Re: Never thought making money was so easy
You think I am from lalukhet (Never mind…Lalukhet just seems to be a naive sounding name).
arey bhai, we are talking short-term/day trading here.
I would imazine that an index (well, many of them…not the sectoral ones though) will more closely reflect the market on a given day. So on a down day - you can expect an index like the Dow Mini to be down too .
While with individual stocks, you can “pick and choose” stocks to “trade”.
I could be wrong since I dont claim to be a stock market Guru…but I need the counter-arguments.
Remember, we are talking DAY TRADING.
Re: Never thought making money was so easy
question for you - if you made $400 in 15 mins does it mean someother day trader lost $400 in 15 mins? I just don't know how it works
Re: Never thought making money was so easy
So where are you doing these 15 minute transactions, do you use etrade or some site online or at the bank..?
Re: Never thought making money was so easy
Wow …you have a very grounded understanding of how the stock market works…Dont assume that there is a guy at the other end who has to make a loss so I can sell my shares at a profit…there are too many players in the market my friend.
I sincerely recommend the stocks trading tutorial at fool.com .
Re: Never thought making money was so easy
You can use any of the several Online Brokerages out there.
Re: Never thought making money was so easy
At the end of the day it is what you feel comfortable with. I feel that day trading in indexes is easier as you go with the flow of the market. The trick here is not how you feel about the market but how the market is behaving, never fight the trend.
Re: Never thought making money was so easy
Some1, check out ALTI, the last few days have been excellent.
Re: Never thought making money was so easy
wait till u have to do your tax forms. :D
capital gains taxes are nasty. and the amount of paperwork it takes to document frequent daytrading is horrendous.
Re: Never thought making money was so easy
Believe me I know exactly what you are saying.
I just downloaded all my transactions from last year. Will have to work on them now.
Re: Never thought making money was so easy
Very interesting topic indeed Some1. I've been investing heavily for the last year or so. I dont day trade, but I tend to buy companies that are seriously under valued and hold on till they recover some value, then dump. I think historically strong stock values are crucial though. I strongly beleive that low P/E and P/B value are both crucial indicators of stock value.
I tend to stay away from American markets due to currency risks (investing in Canada mostly). I think the Canadian market and economy are much safer due to the resource and commodity basis.
That said, a few questions.....
How much minimum investment do you need to day trade, I would guess to make any substantial gains (expecially in Large Caps) you would have to make large investments to beat transaction costs.
Anything you think will move upward in the near future? I think there should be some value in the US markets with the mini crash last week. I've been seriously considering sinking a bunch of money in Microsoft myself........
Re: Never thought making money was so easy
Question for Some1 & Ehsan bhai:
I'm not a trader or anything and but have lot of stock in Walmart, Royal Dutch, Tata Motor and Goldcorp. Exept Walmart all others are up about 70% (:)) since I got. Walmart is up only 6% from my cost. I am very happy for this lucky portfolio but scared if may be something goes wrong and these profits come down!
if you know about these (from above thread something tells me you are expert in the field), can you tell me if I should just sell now and enjoy the profit or leave it there if it will make more? Thx
Re: Never thought making money was so easy
^ You are the one making 70% and we are supposed to be the experts.
Anyways, If I was in your position , I would ring the register on some of my profits (esp on Tata Motors). However, I think you should stick to WMT for some time...Royal Dutch and Goldcorp are again good investments but they are already at their 52-weeks high - so you might want to secure a part of your profits in them at this time.