Daytrading...
 

Does anyone here daytrade?

What are some house rules you use?

% stop outs?

% gain to take?

Min. duration to hold?

Just don't.

Unless it's money you're prepared to lose 100% of and you just want to fuck around.

The rapid rise of high-frequency trading has really crushed the profit margins of day-traders (casual or otherwise). Particularly (I'd imagine) for those just looking to get started. You might still be able to eke out a living if you already knew what you were doing I imagine, and there's always going to be exceptions to every blanket statement obviously. Hell - there's probably somebody on the board here that'd advocate it and has done well by it in the past.

Also - my uncle used to do very well day-trading. Supported a family of 5 and everything. HFT absolutely wrecked him, to the point where he lost his house, "borrowed" a whole ton of money from my grandmother to keep trying to turn it around (which he'll never pay back), and now he works PT at Home Depot next to his son.

I work in the industry (although not as a trader to be fair) and that's my advice for novices (and for my uncle too actually).

Yep, high-frequency trading has killed it. Daytrading as a human is akin to walking up to a high-rollers poker table in Vegas without any idea how to play poker, only with less likelihood of success.

I assume index fund investing is still good advice?

If you're investing for the long-term, index funds tend to outperform most, if not all, other investment vehicles. The only reason not to use them for long-term investing would be if you assume the stock market won't continue to grow over time (as it did in the 20th century).

I dunno, Ive been dabbling and been lucky thus far. If I couldvbe dodged a couple of my big hits I'd be way up. Thats what Im looking for, advice on missing the big hurt. Im content squeezing out daily gains, moving in and out and mostly staying out until I can just hop into the middle of a trend...

As long as you view it exactly like gambling, you'll be fine.

Exactly.

Long time ago I worked for one of the Wall Street firms doing back office stuff. What I learned there was that you don't make money actually making trades (they lose as much as they win), you make money by facilitating OTHER people making trades. That lesson has stuck with me.

I don't know you or your strategy so I'm not going to say you can't do it. The stock market is zero-sum; for every buyer there is a seller (with the sell side - not sellers btw, confusing terminology - benefiting either way as acting as the bookies, as gstelmack alluded to). But just a heads up on taxes if you haven't considered that part; all your short terms gains will be taxes at your full bracket. And I assume you're including your commissions in your gains calc as well. Lots of trading = lots of commissions.

Edit to add: if you are trading in and out on pennies or fractions therein, I do recommend reading Flash Boys before you go any further. At the very least, make sure your trades get routed to the IEX exchange.

Knowing the pain in the rear that my modest stock transactions incur when I have to fill out my tax forms every April, I can't even imagine the pain that a day trader must feel when itemizing every transaction. Is there something I'm missing?

No, it'd be a nightmare. Especially if wash sales are involved.

You will lose money, guaranteed. So what's the motivation?

Well so far I havnt lost money, Im up. This month Im even, the two months before that I was way up. I can short stocks as well so I have been able to make some plays that have paid off when the stocks have gone down. Actually upon further review, Q2 when I started I was up 5.9% and this Q so far up 6.09%.

Im not trading penny stocks.

I dont see the taxes as a nightmare as the end of year printouts are fairly easy to download and import into the software.

Alas, I can see the consensus view.

I mean - if you enjoy it and you can afford it as a vice (like say gambling) then that's cool, keep a little bit of money that you can afford to lose 100% of in there and fuck around...sure.

I wouldn't do it with any sort of serious money that you can't afford to be without, and I wouldn't expect it to be any sort of consistent source of revenue, that's all.

3 months is a real short window of reference. But if you enjoy it go for it. Just don't expect to get any money out of it. The market is pretty efficient in the area you're talking about and if you've thought of it someone else has meaning there isn't much profit in it.

Sorry, didn't mean penny stocks in my query earlier. Meant if you were looking to trade in and out for penny gains... read flash boys regardless tho hah.

As it turns out, we already discussed this in a previous thread. Here it is. You're welcome. :D

thanks!!

EDIT: :)

That still might be the greatest thread of all time on this board.

If someone wants to really set up a good poll tourney, do a "best FOFC thread of all time" using things like that, Maximum Football, etc.

SI

Two other nominees: "How Long to Call?" (I feel like this was one of the earliest enormous threads that wasn't sports/FOF related) and "Is it Possible to Fudge a Bank Statement?" of course.

Hell, as a precursor to the poll, we should do a "FOFC: Retro Edition" and bump one thread a week and force everyone to read them.

yeah, this was my first thought as well.

Had a couple of shorts on today that weren't going the right direction til about 1...then they played out right. Didn't cover at the end of the day though to see what tomorrow looks like. Market was really skittish today.

covered GLW this morning + kept my Short on TSLA and bought some AAPL on what was hopefully a short-term weakness this am. I dunno, the reason I posted these two posts was to show how short term Im looking. I guess its gambling. I agree.

This should be a dynasty.

Maybe thats a good idea although I suck at those too.

so my short on TSLA evolved into a short on NFLX and TWTR while holding my long on AAPL. That turned out pretty good so far I must say. Had some weak trades in between but net up.

So I held AAPL, still do, but I bailed on my NFLX short before the meltdown. No cojones into earnings. Out of the TWTR short too a while back. Still way up since I started to do this in April.

I just have this feeling that this thread reads like a poker thread where you hear all about winnings but we'll never hear about the losing

SI

Oh, Ive had losses, just had a big one in Netapp (NTAP). Wasnt really exciting.

July hasnt shown up in my acct yet but here's what's happened thus far:

April -.6% (I really was just getting started)
May +6.53%
June +1.43%

Im fairly certain July is up although the loss in NTAP was in July. Next biggest loss was in IRM but that was in June.

Biggest winners thus far throughout were FB, NFLX, TSLA, AAPL, TWTR, GLW....but I play them on the long side sometimes and the short side others.

Not to throw a wet blanket on you, but the S&P returns by month over the same period have been .62%, 2.10% and 1.91%.

I'm not really sure what you are using as a benchmark, if anything at all, but that's going to be a pretty important concept going forward to help figure out if you're adding value with your active trades. You have to look at it on a relative basis.

And obviously three months is a pretty small sample.

Good luck.

Sold AAPL today and have been scaling in a short that has been killin' me on STI.

And taxes as well will take 15-35% off the profits as well, further reducing alpha.

If Merrill's site wasn't down I might be able to escape my latest trade (short STI) with a small loss today but Merrill's down so thats either a good thing or bad. We shall see.

I shed half the short today and I'll test the rest against this Ichimoku cloud theorem.

shorted AIG this am
Long CA this am
Long AMZN too
put 1/8 short back on STI hoping to get a leg back down before shedding it all lower (I hope) - wont lose as much and may break even on this after all.


- whipsaw kinda day too. Looks like a Break even kinda day wherein the shorts and longs moved with the overall market. I wont do anything today it looks like and will hold the above into tomorrow.

Covered my 1/8 short in STI at the end of the day yesterday for a sliver of a gain to try and gnaw on my negative position there. then this am I put on a 1/3 short position on it when it popped. I may shed that today if things fall.

3:00-pretty good day for my holdings today. Looks like I'll leave them be for now.

shed 1/3 STI short - banked it to see if Im even now on that position.
bought 1/2 of my pos. in AMZN
a lil more CA


covered the entire STI today. probably too early but it was nice to get profitable on the trade. the Ichinoku wouldve told me not to sell but I hated my entry point on it.

Rough day. Amzn and ca are down, obviously. I covered sti to pocket the small gain or even up. Now to figure out amzn and ca, as I bought in more on those today and watched aig, my only short now, be my only winner for the day but not enough to offset the longs.

Tomorrow will be interesting as I hold a short on AIG and a lot of AMZN long and a smaller amount of CA long.

ROR thus far:

May 6.53
June 1.43
July 7.76

However August is off to an auspicious start

Just curious -- do these numbers factor in commissions and estimated taxes?

I don't know. Probably not taxes I can't imagine. It's off the performance page. I get 30 free trades per month. Imagine taxes will be 25% I'm guessing.

FWIW I'm getting killed in this market meltdown right now. Staying in my positions for now as I don't want to turn the paper losses into real ones.

Had I not tried to out smart ichimoku id still be in my massive short on sti to help stem some of today's bleeding. I'm not so the last two days hurt. Amzn and ca swamped my short in aig. Ugh. Still in.

So my account reloaded to reflect accurately my short in AIG and it almost exactly counters my losses on my CA long position. Thus my big loser right now is AMZN... gotta figure out what to do with it. The last 2 days really whacked the charts as Im learning them, or trying to learn them so it'll be interesting to figure out tomorrow. If we start to swell downwards again i could daytrade a very short term short on STI again as I feel like I have a decent handle on that stock. Who knows... could be a very interesting week although Im hoping it rebounds, I can cover the AIG short for a win and ride up the CA and AMZN to a breakeven or gain.

AMZN is giving me some breathing room this am as the markets tread water and hopefully build a base here. If so I presume Ill be shedding the AIG short and hopefully carrying my two longs back to break even at least. If the shit hits the fan, hang on.

EDIT - man I wish I wouldve listened to the cloud and stayed in my STI short. Wouldve been a huge gainer for me but I was just happy to chew up my losses to a minimal gain on it. Learning.

Looks like a dynasty thread now.

I wish other people were playing and would chime in too. I guess thats what I was hoping for. If it doesnt gain traction, Ill just let it die.

I covered my AIG short on the drop this am back to even par to the close yesterday, pocketed a gain on this one. Im thinking if the market goes up it should as well and I dont want to lose the gain on it. EDIT - Wrong move and missed the later swoon

Still watching my AMZN and CA long now to make sure I dont drop too far.

I'm reading, Flasch.

I find it interesting, but I am not exactly sure how shorts and longs work... I understand what they are in theory, but I don't understand how they work in practice.

When you short a stock you're basically using margin to borrow the stock from the broker at the current price hoping the price drops wherein you'll rebuy it later at a lower price (for them) and pocket the difference. So when you cover it you're buying it to end that trade...

Long just means the traditional buy it low sell it high (you hope)

FWIW, I slapped a short on QCOM this early afternoon as the charts show weakness and it just hit a 52 week high before breaking a ton of support levels. I could be uber wrong but right now its anything to offset my paper losses in AMZN and CA for now.

Thanks!

maybe this should be moved to the dynasty thread.... if I can keep it going and maybe if others want to toss in ideas.

How much time are you putting into this daily?