[ARCHIVED THREAD] - Day Trading? (Page 1 of 2)
Posted: 9/20/2016 8:15:10 PM EDT
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So I've been messing around with an ap in which you use fake money in the real stock market. For the past two weeks I've been able to get a minimum of .5% interest per day. Some days decently higher. This is with stocks like Amazon, Apple, Cedar Fair, etc, etc fortune 500 companies.
If you took $100,000 and managed to do this most days that the market is open (250) you'd make 125% interest and end up over doubling your money the first year at minimum. Curious to hear from folks have dabbled as it's just an interesting hypothetical to me at this point. |
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The psychology between real and fake money is so different it's not even funny. I've been day trading a small real currency account for years and I haven't doubled my money. The fact I haven't lost it all is the real miracle.
My fake money account has had huge returns...and huge losses. I had 50k up to over 400k but lost it all on a big bet when tarp was voted on. 
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Quoted: it will never work. I worked on wall street for 25 years and I can tell you it doesn't work that way at all. A friend of my dads went from a successful retired person to dead broke in five years from "day trading" because he thought he knew what he was doing. |
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the problem with that program is that you really aren't going to get the spreads that tight if you are trading that much.
Now if you told me, hey midcap, I like to enter hedged positions with massive leverage and I ring the register when I have a winner and don't get greedy. I'd believe that to be possible. To do that, you would have to have a large set of cojones and make sure your math is solid and the deals would need to be there, but that isn't day trading. Every person that was making money with day trading have lost their ass. There was epic ass whippings to the day traders when the tech bubble burst. |
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I started trading online at age 11. Won 3 national college level stock market challenges while in highschool while playing along with my own money. Was trading with around 100k before i took it out to buy a business at 20.
I stopped because i couldnt consistently make returns even close to what you mention and the stress was insane. Ever lose 25 grand because of a typo? I have. I went back and averaged it out, i made a 17% return. Not worth it. And taxes hammer you. |
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. |
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Quoted: For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? And over time, you'll be wrong more than right. And your gain was not "interest". |
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Quoted: Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. Quoted: Quoted: For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. |
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Quoted:
For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Why is the Amazon stock proce so high? I thought it was common practice to split it up when prices get high like that...? |
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? when it drops from 775.10 to 750. |
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Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. Quoted:
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. But I didn't panic sell and have the cold calculating demeanor of a Vulcan. |
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I've spent a year day trading. Lost $60K, then somehow got back to even and ecstatically cashed out. Horrible experience. I think I aged 5 years in one year. Nightmares, wake up frantically checking the premarket stuff.
Don't recommend it. Buy if you're hell bent on doing it, look at call/put options. You can make a lot of money there without risking as much. That's how I clawed back. |
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Quoted:
For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? you lose when it goes the other way. Never trade single stocks like that. Blow it on whores and coke, you'll regret it less. |
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I've spent a year day trading. Lost $60K, then somehow got back to even and ecstatically cashed out. Horrible experience. I think I aged 5 years in one year. Nightmares, wake up frantically checking the premarket stuff. Don't recommend it. Buy if you're hell bent on doing it, look at call/put options. You can make a lot of money there without risking as much. That's how I clawed back. Im in the same boat as op. I think options trading is the answer, but you really have to keep your emotions in check and stick to a strategy. OP, research options trading and look at a strategy called iron condor for an example. |
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Quoted: But I didn't panic sell and have the cold calculating demeanor of a Vulcan. Quoted: Quoted: Quoted: For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. But I didn't panic sell and have the cold calculating demeanor of a Vulcan. |
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The psychology between real and fake money is so different it's not even funny. I've been day trading a small real currency account for years and I haven't doubled my money. The fact I haven't lost it all is the real miracle. My fake money account has had huge returns...and huge losses. I had 50k up to over 400k but lost it all on a big bet when tarp was voted on. One stock guy I listened to, Gary Williams, pointed out that many people would practice trade on the volatile stocks they could find, then do their actual investments in Hormel foods. 
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Quoted: One stock guy I listened to, Gary Williams, pointed out that many people would practice trade on the volatile stocks they could find, then do their actual investments in Hormel foods. Quoted: Quoted: The psychology between real and fake money is so different it's not even funny. I've been day trading a small real currency account for years and I haven't doubled my money. The fact I haven't lost it all is the real miracle. My fake money account has had huge returns...and huge losses. I had 50k up to over 400k but lost it all on a big bet when tarp was voted on. One stock guy I listened to, Gary Williams, pointed out that many people would practice trade on the volatile stocks they could find, then do their actual investments in Hormel foods. |
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I am a little confused about some of your terminology. Generally STOCKS do not pay interest, they pay dividends. Are you perhaps referring to making some PROFIT in the difference between what you bought the stock for and what you sold it for.
I do not see where you are figuring in the taxes you will incur, as these will be based on the profit differential being taxed as ordinary income (they are short term gains) as opposed to capital gains on stocks held for 366 days. There are a zillion people out there who think they have the "system" to beat the market. Most don't. If you miss only a few of the up days over the life of your investing career you can end making very little long term. There was a study done a while back that posits this: If you had been in the market for the last 100 years and were lucky enough to have made every one of your stock purchases on the lowest priced days, and sold them on the very highest days you would be very successful. However, if you missed as few as 10 of those days, your results would drop drastically to around 9-11%. I am oversimplifying things but I think you get my point. Timing is EVERYTHING. Under any circumstance, NEVER put money you cannot afford to lose on the table. If day trading was easy, everyone would be sitting in their underwear in front of a computer getting rich  . That being said, put a FIXED amount of non-essential money into a brokerage account and try it for a little while. Take your profits and roll them into additional investments. When your losses if any consume the original amount invested STOP, STOP, do not pass go by putting more money into the account.
It takes very serious commitment, research, and education to consistently make money in a market that is very different than it was even a few short years ago. The old mindset of buying solid stocks and holding them till they gain in price is passe. The real money is being made by traders who are playing options on the movement in stock prices. And that is an entirely different level of risk, knowledge, and timing that takes an extremely high level of commmitment and effort to pull off with any consistency. I wish you luck. Let us know how it works out for you. Disclaimer: while no longer in the investment business, I was a trader at Fidelity Investments for a while 15 years ago. |
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One stock guy I listened to, Gary Williams, pointed out that many people would practice trade on the volatile stocks they could find, then do their actual investments in Hormel foods. Quoted:
Quoted:
The psychology between real and fake money is so different it's not even funny. I've been day trading a small real currency account for years and I haven't doubled my money. The fact I haven't lost it all is the real miracle. My fake money account has had huge returns...and huge losses. I had 50k up to over 400k but lost it all on a big bet when tarp was voted on. One stock guy I listened to, Gary Williams, pointed out that many people would practice trade on the volatile stocks they could find, then do their actual investments in Hormel foods. I believe it. . It's crazy how frustrating it can be to lose $10 bucks. It took awhile to stop taking it personally. If I was using my life savings, I'd cry. The only people who should day trade are people who use a chunk of money that they could light on fire without it affecting their life. If you trade with money that can change your life, your brain will give it all away.
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I have a portion of my retirement account that I have in my company stock. I can move it to a money market account and back. A couple years I worked at it and made close to 30% each year, way better than the rest of my 401k. This over the last few months I sold at 56 something and bought back at under 50, that helped my retirement. I enjoy doing it, and have never lost money, but I know a couple things:
I'm trading ONE stock, it has fairly predictable swings, and I know the company behind it is stable. If I lose all I have in it, I'll be OK. Without it, I'm still well ahead of 'average' in my retirement savings. |
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It's like system gambling. You may have a run of good luck, but eventually you will have a run of bad luck. You can't count on consistent gains. Buy well-run companies that pay good dividends. Forget the day trading. My Experience ^^^^^^^^ I had a class from home several years ago and was playing the "day trades" "penny stocks" while in class.....beginning stash was $300 and I was up to $1200 at one point....took a lunch break and I was at $.00001 by the time I got back from from lunch. I still keep that $.00001 dollar stock to remind me NOT to do that shit again.. |
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Quoted: But I didn't panic sell and have the cold calculating demeanor of a Vulcan. Quoted: Quoted: Quoted: For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. But I didn't panic sell and have the cold calculating demeanor of a Vulcan. There is also an issue called Free Riding that you are not taking into consideration. You would need a cash plus margin account to avoid it. Free riding (also known as Freeriding or Free-riding) is a term used in stock-trading to describe the practice of buying and selling shares or other securities without actually having the capital to cover the trade. In a cash account, a free riding violation occurs when the investor sells a stock that was purchased with unsettled funds. The Securities and Exchange Commission states "In a cash account, you must pay for the purchase of a stock before you can sell it. If you buy and sell a stock before paying for it, you are free riding, which violates the credit extension provisions of the Federal Reserve Board. If you free ride, your broker must freeze your account for 90 days." Let's say you sold XYZ stock Monday, used the money to by AMZN on Tuesday at $775.10, and then you sold it on Wednesday at $779.69. You now have 2 free riding violations because you bought and sold with unsettled money. Factoring that in, you can't sell on Wednesday. Earnings came out post-market on Wednesday and they were bad. AMZN open up down $10 on Thursday. You just lost $4,370 or 1.3%. How long will it take you to make that back without making another bad trade. Now you are questioning yourself, which will cause you make more bad decisions. Also do you have $340,000 to invest like your example shows? Some how I doubt that. |
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OP, I hope you've been convinced. If not, make sure you don't go anywhere near leveraged trading. Just straight stock buys.
And learn how transactions work. Stop/limit orders, and especially in the case of stop losses, how a stop can be "overruled" during a major movement due to no buyers available at your stop price. So much to learn before using real money. If you don't learn it, you will be in for some nasty surprises. Not if, but when. |
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Give it your best shot OP. Limit yourself to starting with $500 in real money in you trading account that way you can get an education on the cheap when you lose it all. Or you can get a FREE education and just listen to the folks here.
Proper investing is a get rich slowly scheme. It takes time and patience. |
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Take the money to Vegas at least you get to look at pretty women, get free drinks, and maybe get a room comp. Day trading is high risk. After I turned $20k into $60k back in 2008/2009 messing with it a few minutes a day, I should have quit...or taken $20k to Vegas. As it turns out, a few months later I was looking at an account with mere pennies in it. |
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There is also an issue called Free Riding that you are not taking into consideration. You would need a cash plus margin account to avoid it. Free riding (also known as Freeriding or Free-riding) is a term used in stock-trading to describe the practice of buying and selling shares or other securities without actually having the capital to cover the trade. In a cash account, a free riding violation occurs when the investor sells a stock that was purchased with unsettled funds. The Securities and Exchange Commission states "In a cash account, you must pay for the purchase of a stock before you can sell it. If you buy and sell a stock before paying for it, you are free riding, which violates the credit extension provisions of the Federal Reserve Board. If you free ride, your broker must freeze your account for 90 days." Let's say you sold XYZ stock Monday, used the money to by AMZN on Tuesday at $775.10, and then you sold it on Wednesday at $779.69. You now have 2 free riding violations because you bought and sold with unsettled money. Factoring that in, you can't sell on Wednesday. Earnings came out post-market on Wednesday and they were bad. AMZN open up down $10 on Thursday. You just lost $4,370 or 1.3%. How long will it take you to make that back without making another bad trade. Now you are questioning yourself, which will cause you make more bad decisions. Also do you have $340,000 to invest like your example shows? Some how I doubt that. Quoted:
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. But I didn't panic sell and have the cold calculating demeanor of a Vulcan. There is also an issue called Free Riding that you are not taking into consideration. You would need a cash plus margin account to avoid it. Free riding (also known as Freeriding or Free-riding) is a term used in stock-trading to describe the practice of buying and selling shares or other securities without actually having the capital to cover the trade. In a cash account, a free riding violation occurs when the investor sells a stock that was purchased with unsettled funds. The Securities and Exchange Commission states "In a cash account, you must pay for the purchase of a stock before you can sell it. If you buy and sell a stock before paying for it, you are free riding, which violates the credit extension provisions of the Federal Reserve Board. If you free ride, your broker must freeze your account for 90 days." Let's say you sold XYZ stock Monday, used the money to by AMZN on Tuesday at $775.10, and then you sold it on Wednesday at $779.69. You now have 2 free riding violations because you bought and sold with unsettled money. Factoring that in, you can't sell on Wednesday. Earnings came out post-market on Wednesday and they were bad. AMZN open up down $10 on Thursday. You just lost $4,370 or 1.3%. How long will it take you to make that back without making another bad trade. Now you are questioning yourself, which will cause you make more bad decisions. Also do you have $340,000 to invest like your example shows? Some how I doubt that. he would only probably need half up front for margin, then what ever maintenance % the broker wanted afterwards. leverage cuts both ways. |
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For day trading that is what you need to focus on all day every day. I've been following a certain ETF and made a decent return on it and went to cash. I was looking to get back in but work pulled me away for a week and I didn't get in. The ETF had the rally I expected but I'm sitting in cash because I couldn't watch it every day. In the last week the ETF is up 36%. Now what do I do? Do I jump in on a dip so I can ride it up from here or in the volatile election year do I continue to sit it out and hope it drops 30% or so before buying in? If I sit it out it could just as easily jump another 30% as it could drop 30%. Meaning I could buy in on a dip but it continues to drop and lose my shirt. The ETF is up almost 100% over the last 2 months but I missed most of that. |
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But I didn't panic sell and have the cold calculating demeanor of a Vulcan. Quoted:
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? Short term capital gains and transaction costs for starters. Plus when it goes down $5 and you panic sell before it reverses to a $10 gain. But I didn't panic sell and have the cold calculating demeanor of a Vulcan. Maybe, but it can stay down for quite a while or even forever, and all that time your money is tied up. The real problem, to me, is if you don't risk a significant amount of money, you won't make a significant amount of money. What that amount is differs for different people. But if you risk a small amount of money, even if you do great and it doubles, you still have a small amount of money. |
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Typical day trading violates federal regulations. You can't sell a stock, take the proceeds, buy another stock, and sell the second stock with ~3 days. That's a Reg T violation. https://en.wikipedia.org/wiki/Free_riding |
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? When AMZN drops to 559.69/share the day you plan on selling because low earnings, poor weather, or the big league hedge fund managers handling 100's of millions or billions in assets just fucked you and everyone else holding AMZN or maybe their gamble with trying to take over a new tech sector fell on its face. It is possible to make money, but it's also possible to lose everything. For a history lesson check some stories of very experienced stock traders killing themselves during various market crashes. The worst is usually when they get too cocky and leverage their ass off right before the bubble pops. Also the market is due for another serious down turn. The only reason the market goes up is because it also goes back down. The difference is who's rich and who's broke. Wealth usually moves up the ladder to a richer guys pocket. Basically you're stealing from those who are poorer than you or those who aren't as in tune to the market. Wall Street and bankers have destroyed our nation. |
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When AMZN drops to 559.69/share the day you plan on selling because low earnings, poor weather, or the big league hedge fund managers handling 100's of millions or billions in assets just fucked you and everyone else holding AMZN or maybe their gamble with trying to take over a new tech sector fell on its face. It is possible to make money, but it's also possible to lose everything. For a history lesson check some stories of very experienced stock traders killing themselves during various market crashes. The worst is usually when they get too cocky and leverage their ass off right before the bubble pops. Also the market is due for another serious down turn. The only reason the market goes up is because it also goes back down. The difference is who's rich and who's broke. Wealth usually moves up the ladder to a richer guys pocket. Basically you're stealing from those who are poorer than you or those who aren't as in tune to the market. Wall Street and bankers have destroyed our nation. Quoted:
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? When AMZN drops to 559.69/share the day you plan on selling because low earnings, poor weather, or the big league hedge fund managers handling 100's of millions or billions in assets just fucked you and everyone else holding AMZN or maybe their gamble with trying to take over a new tech sector fell on its face. It is possible to make money, but it's also possible to lose everything. For a history lesson check some stories of very experienced stock traders killing themselves during various market crashes. The worst is usually when they get too cocky and leverage their ass off right before the bubble pops. Also the market is due for another serious down turn. The only reason the market goes up is because it also goes back down. The difference is who's rich and who's broke. Wealth usually moves up the ladder to a richer guys pocket. Basically you're stealing from those who are poorer than you or those who aren't as in tune to the market. Wall Street and bankers have destroyed our nation. I was with you till that last paragraph.  stealing? Really? lol
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Typical day trading violates federal regulations. You can't sell a stock, take the proceeds, buy another stock, and sell the second stock with ~3 days. That's a Reg T violation. https://en.wikipedia.org/wiki/Free_riding Unless you have a margin account. |
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I was with you till that last paragraph. stealing? Really? lolQuoted:
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For those in the know with experience tell me where I lose with the following transaction. I buy 437 shares of AMZN on 9/19 for 775.10 per share I sell 437 shares of AMZN on 9/20 for 779.69 per share What is not realistic or where do you lose? When AMZN drops to 559.69/share the day you plan on selling because low earnings, poor weather, or the big league hedge fund managers handling 100's of millions or billions in assets just fucked you and everyone else holding AMZN or maybe their gamble with trying to take over a new tech sector fell on its face. It is possible to make money, but it's also possible to lose everything. For a history lesson check some stories of very experienced stock traders killing themselves during various market crashes. The worst is usually when they get too cocky and leverage their ass off right before the bubble pops. Also the market is due for another serious down turn. The only reason the market goes up is because it also goes back down. The difference is who's rich and who's broke. Wealth usually moves up the ladder to a richer guys pocket. Basically you're stealing from those who are poorer than you or those who aren't as in tune to the market. Wall Street and bankers have destroyed our nation. I was with you till that last paragraph. stealing? Really? lolThis. I was like: Yep. 
Yep.
Yep.
Fuck yes fella. 
Meh. 
Umm.... 
Wait a second...... 
Doh. 
Reminds me a friend i had in highschool that always took it too far. A conversation might start about how cute a girl is. Then at the end he would throw in something like "hey, we should spike her drink then take turns having sex with her in the bushes behind the dumpster.
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