Sep
29
Why Daytrading Is Still Possible
Filed Under Finance | Leave a Comment
Frank Vanderlugt wrote:
Day trading most commonly refers to the practice of buying and selling stocks during the day so that at the end of the day you don’t hold any shares overnight; you sell as many shares as you buy. You make money on the difference between the purchase and sales prices.
The main motivation for this style of trading is to make money every day so you don’t sit on the shares , plus of course you eliminate the risk that the shares go down in value overnight. the motivation of this style of trading is to reduce the risk of holding a position overnight where the open price may have significantly changed from the previous day’s closing price.
NASDAQ defined day trading by saying somebody is a Daytrader if he makes more than four buy and sell orders over a five-day period.
Prior to the year 2000 it was not uncommon for some of the most successful Daytraders to make more than a million dollars in a single day.
There were dozens of Daytrading Chatrooms where people were “told” what to buy and when to buy it. Some Chatrooms had more than 500 members. And most Daytraders, it is estimated as high as 99%, lost their shirt. One of the reasons they lost their shirt is because they could trade on Margin.
Trading on Margin means that the brokerage firm which executes your trades will lend you up to 5 times your investment. So if you had $10,000 in your trading account you could in some cases trade with $50,000.
However, if you lost on your trades, repayment was due immediately.
Since the heady dot com days of the year 2000 DayTrading has gone out of style and out of range.
Most brokerage firms have gone under or have consolidated, and staff has been reduced in the remaining firms by about 80%.
Trades that used to cost $35 to execute can now be had for as low as $4.-
Initially it happened because President Bush talked the economy down and Mr Greenspan kept on raising the interest rate to such a level that all optimism disappeared from the Market.
Up until this time like clockwork 2 or 3 days a week there were Stocks, mainly Internet Stocks, that would rise more than 30% early in the morning and then fall the same amount five minutes before closing so people could take profit.
If you were on the ball you could make a lot of money as a DayTrader.
You could also lose a lot of money.
Those days no longer exist.
It is very rare to see stocks vary more than 30% in one day so the profit potential first of all is not as great, and the ability to catch a percentage of the increase in the price of a stock has also lessened.
One of the reasons also is that Internet Stocks which were totally overvalued are no longer overvalued and as a matter of fact have risen much less than any other type of Stock.
Another reason is that there are very few IPO’s and even Google’s IPO did not take off for quite some time.
If it was not for the spectacular performance of Google , Internet Stocks lost more than 8% in 2005.
Even Ebay lost more than a quarter of its value.
However, if you are shrewd, you can still make money as a DayTrader but it ain’t easy.
What do you think happens when a company invents a car that runs on water?
If you could get news about this company very early you could make a lot of money.
Not many people know that you can trade the NASDAQ Stock Market as early as 6 AM.
So if you are a Stock Market News Hound and like to get up really early in the morning and have nerves of steel you could buy the stock at 6 AM and sell it at 9.29 AM to everybody else starting a regular trading day.
This will not happen very often, the fact that there is spectacular news.
But if you are patient it may happen once a month.
Dog Nail Care
Day trading most commonly refers to the practice of buying and selling stocks during the day so that at the end of the day you don’t hold any shares overnight; you sell as many shares as you buy. You make money on the difference between the purchase and sales prices.
The main motivation for this style of trading is to make money every day so you don’t sit on the shares , plus of course you eliminate the risk that the shares go down in value overnight. the motivation of this style of trading is to reduce the risk of holding a position overnight where the open price may have significantly changed from the previous day’s closing price.
NASDAQ defined day trading by saying somebody is a Daytrader if he makes more than four buy and sell orders over a five-day period.
Prior to the year 2000 it was not uncommon for some of the most successful Daytraders to make more than a million dollars in a single day.
There were dozens of Daytrading Chatrooms where people were “told” what to buy and when to buy it. Some Chatrooms had more than 500 members. And most Daytraders, it is estimated as high as 99%, lost their shirt. One of the reasons they lost their shirt is because they could trade on Margin.
Trading on Margin means that the brokerage firm which executes your trades will lend you up to 5 times your investment. So if you had $10,000 in your trading account you could in some cases trade with $50,000.
However, if you lost on your trades, repayment was due immediately.
Since the heady dot com days of the year 2000 DayTrading has gone out of style and out of range.
Most brokerage firms have gone under or have consolidated, and staff has been reduced in the remaining firms by about 80%.
Trades that used to cost $35 to execute can now be had for as low as $4.-
Initially it happened because President Bush talked the economy down and Mr Greenspan kept on raising the interest rate to such a level that all optimism disappeared from the Market.
Up until this time like clockwork 2 or 3 days a week there were Stocks, mainly Internet Stocks, that would rise more than 30% early in the morning and then fall the same amount five minutes before closing so people could take profit.
If you were on the ball you could make a lot of money as a DayTrader.
You could also lose a lot of money.
Those days no longer exist.
It is very rare to see stocks vary more than 30% in one day so the profit potential first of all is not as great, and the ability to catch a percentage of the increase in the price of a stock has also lessened.
One of the reasons also is that Internet Stocks which were totally overvalued are no longer overvalued and as a matter of fact have risen much less than any other type of Stock.
Another reason is that there are very few IPO’s and even Google’s IPO did not take off for quite some time.
If it was not for the spectacular performance of Google , Internet Stocks lost more than 8% in 2005.
Even Ebay lost more than a quarter of its value.
However, if you are shrewd, you can still make money as a DayTrader but it ain’t easy.
What do you think happens when a company invents a car that runs on water?
If you could get news about this company very early you could make a lot of money.
Not many people know that you can trade the NASDAQ Stock Market as early as 6 AM.
So if you are a Stock Market News Hound and like to get up really early in the morning and have nerves of steel you could buy the stock at 6 AM and sell it at 9.29 AM to everybody else starting a regular trading day.
This will not happen very often, the fact that there is spectacular news.
But if you are patient it may happen once a month.
Dog Nail Care
Sep
28
LIve Trading emini S&P Part 1
Filed Under Howto | 2 Comments
tradingiq wrote:
Daytrading emini S&P Part 1; trading stocks Please visit TradingIQ.com for more videos
Pet Grooming
Sep
24
DrvThruRec wrote:
Im a big sports card collector(mostly hockey) and i always hear about people trading cards online, but i cannot find any websites. I know a bunch are out there. Can someone give me some quality websites that they have either used or have heard good things about. I would prefer not to pay, but i guess if there are no free ones out there ill look into it. Thanks!
Credit Repair
Im a big sports card collector(mostly hockey) and i always hear about people trading cards online, but i cannot find any websites. I know a bunch are out there. Can someone give me some quality websites that they have either used or have heard good things about. I would prefer not to pay, but i guess if there are no free ones out there ill look into it. Thanks!
Credit Repair
Sep
24
TRADING FOREX - USDJPY +4 pips
Filed Under People | 14 Comments
Yaguex wrote:
Watch me daytrading forex live with my 3SMA forex trading system! Visit my website at http://www.hectortrader.com/
Motor Scooters
Sep
20
How has options-trading affected the workings of a stock-only market?
Filed Under Economics | 2 Comments
i.have.questions wrote:
Has (Does?) options-trading (futures) affected the stock market? Is there any positive or negative impact of trading options directly or indirectly on the trading of stocks?
Has (Does?) options-trading (futures) affected the stock market? Is there any positive or negative impact of trading options directly or indirectly on the trading of stocks?
Not that I’m not trying to understand what is options trading - I am trying to find out if there has been any study on the impact of futures trading on a stock market on a general scale.
Credit Repair
Sep
18
Trading Psychology - Why Traders Knowingly Make Bad Decisions
Filed Under Business | Leave a Comment
Brian McAboy wrote:
“To Err is Human”, but in trading it often happens that traders will knowingly make decisions that create losing trades. Now we’re not talking about losses that come about because of testing out a trading plan or a specific indicator. Nor are we looking at simple errors committed purely by accident. If our goal is to profit, then why would we do these things that are clearly against what we know to be right? This phenomenon has many very undesirable consequences that are experienced quite regularly in the trading world.
A person’s confidence can take a severe blow when these intentional mistakes occur on top of the loss of money. Other after-effects often include a lot of putting oneself down for having done these things. Depending on the magnitude of the error, this can wind up in a rather nasty cycle that compounds the problem and sets the stage for it to happen again. Until the source of the issue is discovered and the trader takes action to address it, the self-sabotaging behavior is likely to happen again and again. This isn’t limited to new traders either.
For an example, one such trader (a real person that we’ll call Mark) of over 50 years had been going through this month-after-month for over a decade since becoming an individual trader trading from home. Mark has done just about everything in the futures industry that there is to do. He worked on soybean farms and at the shipping docks loading ships and coordinating shipments and orders. For about another decade, Mark ran orders on the exchange floor. From there, he worked both for and as an introducing broker in the commodities industry until he decided to retire at the age of 59. Needless to say, Mark had plenty of experience in trading, but for nearly fifteen years, Mark has been losing money. But why, and why does he keep doing it?
Trading is definitely nothing new to Mark. As a broker, he was very successful. He’s tried just about every strategy and system there is. He’s pretty sharp and knows his way around the computer and what he’s looking at on the charts. Mark loves trading and looks forward to getting up every morning to get busy with his trading. On a typical day, he might make $600 or lose $800. More often than not he loses. When his wife gets home from work (yes, she still works at the age of 70), he’s usually brooding in his easy chair after kicking himself and calling himself “stupid” or “idiot”. In all these years, he still has yet to end a year in the black. He’s also concerned about how much longer his wife is going to let him keep on this way.
When asked why he continues to trade this way, and why he doesn’t make use of a system that he knows can make him money, he simply says that he doesn’t want to because they are boring. This is very true: a well-thought out trade, where you know what you’ll do before you get in regardless of which way the market moves can be very boring. However… when you enter trades without a plan, or if you’ve deviated from your system, the suspense can be very intense.
Why do people take the time to sit through movies instead of going straight to the end to see if the hero triumphs or fails? Why do millions of people watch baseball games, rather than simply check the scores in the morning? It is the suspense, the excitement of not-knowing the outcome, that brings the thrill. The moments that are most enjoyed and fully hold our attention are when the ball is in the air and we don’t know if it will be caught or dropped, when the hero’s fate hangs in the balance. As humans, there is a part in all of us that craves that excitement.
At the conscious level, profits are what everyone wants (who doesn’t?). Many people choose trading because trading offers the opportunity to realize very significant financial gain. The real risk is that it also offers the thrill that another part of us craves at the subconscious level. If that part of you isn’t being fulfilled through other channels of your life, it is highly probable to find its way into your trading and seek satisfaction there. Excitement from not-knowing the outcome in your trading is where you don’t want it. What you need to do is to include activities in your life that provide sufficient excitement, and be okay with it if your trading is a bit boring - but profitable.
Designer Handbags
“To Err is Human”, but in trading it often happens that traders will knowingly make decisions that create losing trades. Now we’re not talking about losses that come about because of testing out a trading plan or a specific indicator. Nor are we looking at simple errors committed purely by accident. If our goal is to profit, then why would we do these things that are clearly against what we know to be right? This phenomenon has many very undesirable consequences that are experienced quite regularly in the trading world.
A person’s confidence can take a severe blow when these intentional mistakes occur on top of the loss of money. Other after-effects often include a lot of putting oneself down for having done these things. Depending on the magnitude of the error, this can wind up in a rather nasty cycle that compounds the problem and sets the stage for it to happen again. Until the source of the issue is discovered and the trader takes action to address it, the self-sabotaging behavior is likely to happen again and again. This isn’t limited to new traders either.
For an example, one such trader (a real person that we’ll call Mark) of over 50 years had been going through this month-after-month for over a decade since becoming an individual trader trading from home. Mark has done just about everything in the futures industry that there is to do. He worked on soybean farms and at the shipping docks loading ships and coordinating shipments and orders. For about another decade, Mark ran orders on the exchange floor. From there, he worked both for and as an introducing broker in the commodities industry until he decided to retire at the age of 59. Needless to say, Mark had plenty of experience in trading, but for nearly fifteen years, Mark has been losing money. But why, and why does he keep doing it?
Trading is definitely nothing new to Mark. As a broker, he was very successful. He’s tried just about every strategy and system there is. He’s pretty sharp and knows his way around the computer and what he’s looking at on the charts. Mark loves trading and looks forward to getting up every morning to get busy with his trading. On a typical day, he might make $600 or lose $800. More often than not he loses. When his wife gets home from work (yes, she still works at the age of 70), he’s usually brooding in his easy chair after kicking himself and calling himself “stupid” or “idiot”. In all these years, he still has yet to end a year in the black. He’s also concerned about how much longer his wife is going to let him keep on this way.
When asked why he continues to trade this way, and why he doesn’t make use of a system that he knows can make him money, he simply says that he doesn’t want to because they are boring. This is very true: a well-thought out trade, where you know what you’ll do before you get in regardless of which way the market moves can be very boring. However… when you enter trades without a plan, or if you’ve deviated from your system, the suspense can be very intense.
Why do people take the time to sit through movies instead of going straight to the end to see if the hero triumphs or fails? Why do millions of people watch baseball games, rather than simply check the scores in the morning? It is the suspense, the excitement of not-knowing the outcome, that brings the thrill. The moments that are most enjoyed and fully hold our attention are when the ball is in the air and we don’t know if it will be caught or dropped, when the hero’s fate hangs in the balance. As humans, there is a part in all of us that craves that excitement.
At the conscious level, profits are what everyone wants (who doesn’t?). Many people choose trading because trading offers the opportunity to realize very significant financial gain. The real risk is that it also offers the thrill that another part of us craves at the subconscious level. If that part of you isn’t being fulfilled through other channels of your life, it is highly probable to find its way into your trading and seek satisfaction there. Excitement from not-knowing the outcome in your trading is where you don’t want it. What you need to do is to include activities in your life that provide sufficient excitement, and be okay with it if your trading is a bit boring - but profitable.
Designer Handbags