Are any of you day traders?

Discussion in 'Stock Market Education' started by richc3, Jun 20, 2014.

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    Jun 20, 2014
  1. richc3

    richc3 Senior Investor

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    I typically hold my stocks from months -> years even, but I've always been curious about people that essentially put their emphasis in day trading.
    For those of you that have any experience in it, what is it like to you? Do you have multiple computer screens dedicated to it or carry a smartphone app that lets you buy/sell through it?

    Any insight or general thoughts would be great.
     
    richc3, Jun 20, 2014
    richc3, Jun 20, 2014
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    2. Jun 20, 2014
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    If you're talking about the strict definition of day trading the feds and most use - buying and selling the same securities on the same day on 3 or more occasions in a 5 day period, and usually liquidating everything before the close every day - I day traded for a little while many years ago.

    I got away from it when I realized it was very risky, expensive, and that usually those who were able to get orders placed and filled the fastest usually made the money.

    No doubt things have changed in recent years with all the new technology, but now you have the high frequency trading systems that find buy / sell signals and execute at speeds a human simply cannot compete with.

    It's extremely risky and often difficult to predict what markets, securities, commodities, etc will do in the course of a day. I have found that occasionally lightly jumping in on something unusual that happens and is announced during market hours and taking a quick profit is a good way to make a quick buck on occasion. The problem is that most of these events - such as earnings forecasts, FDA decisions, M&A activity, etc - are announced outside of market hours. It can be very risky trying to determine if the price will keep going in that direction the next morning at the open, or if it will stall or even reverse (quite common).

    And many times many "events" don't move the security as much as some might think anyway.
     
    JR Ewing, Jun 20, 2014
    JR Ewing, Jun 20, 2014
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    3. Jun 20, 2014
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    If you're gonna do such a thing, I think you should do so with a relatively small amount of $ from a big pile of money.

    If you need $5k a month to live on, you'd ideally want to have about a million and a half set aside in an income fund that will pay you $ that a job would normally pay you to live on, since day trading is now your job and you don't want to pull $ out of your trading account to live on. Either that, or hopefully you'd have some rental properties or some other source of passive income.

    And I'd say put 90-95% of your investment funds into more traditional investing.

    So you'd probably want to have $3 mil or so - a mil and a half in bonds / rental properties / high dividend stocks / etc paying you $5k or so in monthy income, another million plus invested in a more traditional portfolio, and perhaps low 6 figures to trade with. This way if you lose all of your $ trading (quite possible - > 95% failure rate), you'll still have 90+ % of your assets.
     
    JR Ewing, Jun 20, 2014
    JR Ewing, Jun 20, 2014
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    4. Jun 21, 2014
  4. turt

    turt Guest

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    It's one way to make money but I'd never do it for the majority of my trades. You need to put a lot in to make a good profit with a huge amount of risk. If it doesn't go up later in the day, you just end up loosing money. You really have to look for special situations to really make it work for you. Multiple screen definitely helps with trading. You could work on one screen and have the market up in the other. Then you could have your phone on top of all of that!
     
    turt, Jun 21, 2014
    turt, Jun 21, 2014
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    5. May 29, 2015
  5. mwin43587

    mwin43587 Guest

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    I take risk in investing in shares of stock, and day trading is riskier and I don't do and want it. I would rather wait for years than take much more risks and loose money.
     
    mwin43587, May 29, 2015
    mwin43587, May 29, 2015
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    6. May 29, 2015
  6. pwarbi

    pwarbi Senior Investor

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    I've looked at this myself a few years ago but also found that it's doubling your risk. Investments of any kind can be risky but to get in and out in the same day is always going to be difficult, even more so if your hoping to make any kind if profit doing it aswell.

    Long term investment is what I've found is the best way, it works for me so I'll stick to it. Day trading might be good for some, but for me I'm not prepared to take them kind of risks.
     
    pwarbi, May 29, 2015
    pwarbi, May 29, 2015
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    7. May 29, 2015
  7. PipCurrencies

    PipCurrencies Well-Known Member

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    In my workd, it costs too much to trade stocks daily. I do day trade in FOREX daily and it's quite profitable but if I have to hold a position for a time I am free to do that too. It really is a great market for this. Low cost.
     
    PipCurrencies, May 29, 2015
    PipCurrencies, May 29, 2015
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    8. May 29, 2015
  8. crimsonghost747

    crimsonghost747 Senior Investor

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    I did a bit of day trading, of course the income potential was part of it but I mainly did it for fun.
    Stopped it now though, realised that it simply isn't profitable in the long run and my money is better spent investing in my long term dividend growth portfolio.

    I will still probably make a trade or two once in a while, but it will never be a source of income for me.
     
    crimsonghost747, May 29, 2015
    crimsonghost747, May 29, 2015
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    9. Jun 11, 2015
  9. SteakTartare

    SteakTartare Senior Investor

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    I've never done it personally. Between the risk and the time commitment, it just wasn't in the cards. I've personally known one person who did so for a while, but he ended up, eventually, getting hurt financially.
     
    SteakTartare, Jun 11, 2015
    SteakTartare, Jun 11, 2015
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    10. Jun 13, 2015
  10. AtlantaSports

    AtlantaSports Senior Investor

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    That's the risk that you run whenever you become a day trader. It sounds like a relatively inviting profession to have, though.
     
    AtlantaSports, Jun 13, 2015
    AtlantaSports, Jun 13, 2015
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