Any of you guys ever do any "day trading"

[The Foot]

Thinking if getting into it and would love your advice of best way to get started

 

[tlance]

Don’t do it.

 

[TREFF]

If your retired, and have nothing but time to research, and money to blow.. Sure. If its your full time job, sure, otherwise, a ridiculous move

 

[Barilko]

Footnick you do enough day trading here no need to do it anywhere else....

 

[HaroldSeattle]

Sounds like a good way to go broke and divorced. You did get me curious to do some reading on the matter. Here's a article that I felt sounded right.

Why Day Trading is a Loser's Game - StockTrader.com

Warren Buffett sums it up best,

With enough insider information and a million dollars, you can go broke in a year.


3. Taxes and the costs of trading are a serious hurdle
This comes back to #9, but it’s worth breaking down the basics. Here are the key terms to understand:

• Short term capital gains tax – “Short term capital gains do not benefit from any special tax rate – they are taxed at the same rate as your ordinary income. For 2015, ordinary tax rates range from 10 percent to 39.6 percent, depending on your total taxable income.” – TurboTax
• Long term capital gains tax – “If you can manage to hold your assets for longer than a year, you can benefit from a reduced tax rate on your profits. For 2014, the long-term capital gains tax rates are 0, 15, and 20 percent for most taxpayers. If your ordinary tax rate is already less than 15 percent, you could qualify for the zero percent long-term capital gains rate. For high-income taxpayers, the capital gains rate could save as much as 19.6 percent off the ordinary income rate.” – TurboTax
• Trade Commission – Charge to buy or sell stock.
• Order Execution Quality – Many brokers sell high frequency trading firms the right to “peek” at your order and more or less screw you on your fill. This is called payment for order flow. Despite being $.01 or $.02 per share, poor fill costs can add up real quick when you trade frequently.

Out performing the S&P 500 in any given year is a feat in itself, but when you then take into consideration taxes, commission costs, and research (those hot stock pick services, chat rooms, and market newsletters don’t come for free), the game becomes that much more difficult.

Lesson: When taxes, commissions, and other costs of trading such as research are taking into consideration, the challenge of outperforming the market year after year as a career are compounded.

2. Confirmation bias and your emotions are your worst enemy
Trading is a mental game. The mind is a beautiful thing, and given a runway of endless inspiration data, it can wreak some serious havoc.

Confirmation bias definition via Wikipedia,

Confirmation bias is the tendency to search for, interpret, prefer, and recall information in a way that confirms one’s beliefs or hypotheses while giving disproportionately less attention to information that contradicts it.

In the trading world, this means you see a setup or price action and quickly convince yourself to buy or sell. Unfortunately, 99% of the time you should be doing the direct opposite.

Technical analysis is one of the worst in provoking this natural human behavior. “Oh, I’ve seen this pattern before, it’s a buy”. There is a reason why online brokers offer dozens and in some cases hundreds of technical indicators. Indicators encourage you to see more “patterns” and trade more frequently.



Think #2 would really apply to you, no offense meant.


Closing Thoughts
For new investors getting started, trading should be a quest for knowledge, not about getting rich.

While I have no regrets of investing thousands of hours into the markets over the past 18 years, I’ve had to accept the reality that my retirement portfolio would be further ahead had I understood these truths from the beginning:

• The “lifestyle” of a successful day trader is a big fat lie
• You really need at least a $1,000,000 portfolio to trade full-time
• The odds are dramatically stacked against you
• Allocate 5% or less of your portfolio to trading (speculating) and invest the rest in low cost index funds
• The effect of compounded returns over the course of several decades is amazing
• Taking tips from people “smarter” than you is a terrible idea
• One trade can easily make or break your year (or career)
• Taxes and the costs of trading are a serious hurdle
• Confirmation bias and your emotions are your worst enemy
• Passive indexing is the best path forward for 99.9% of Americans

If your mentality is to use the market as a vehicle to supplement income or get rich, stop yourself, you’re already primed for failure. Day trading is a loser’s game.

 

[SmokingMonkey]

I'll play a little devil's advocate here - if it is "play" money for you, it really isn't any different than gambling. Since I was fortunate to not lose my job during the pandemic, I threw my stimulus check and about 30% of my annual bonus into my fidelity account to play around. Bought a few stocks, put some into index funds, and recently put like $25-$50 in a couple penny stocks. Again, the penny stocks are literally gambling. If any of them show any promise, I'm selling a chunk off to get my money back and will leave the "house money" in to see where it goes.

The stocks I bought were ones with historical dividends that dipped in March that I plan to hold. (less risky, imo)

The index funds are compiled of small portions of a bunch of different stocks, again, less risky. You don't really pump money into and out of index funds regularly. The strategy there is to regularly put small amounts in over time. I made sure the ones I got had companies like Amazon, Apple, etc. The heavy hitters that I couldn't afford direct stock plays on.

None of this should be misconstrued as financial advice. Just sharing my experiences. Agree with the others, if you don't know what you're doing, don't. I have both a 401k through my company and a Roth IRA that I make monthly contributions to for my real retirement plan. Repeat, the stock stuff I do I consider grambling as much as I consider it "investing". And I'm not on there every day buying and selling to make a quick buck. There is no such thing as easy money.

 

[Barilko]

@HaroldSeattle Great input to save our friend

@SmokingMonkey Smart words to save our friend

Kudos Boys

 

[averagejoe]

I traded a saturday for a wednesday once.

 

[HaroldSeattle]

I traded a saturday for a wednesday once.

You got the short end on that trade.

 

[Barilko]

I traded a saturday for a wednesday once.

well that could work

 

[Barilko]

I traded a saturday for a wednesday once.

for

 

[The Foot]

I absolutely understand what you guys are saying. And I'm sure you know what your talking about. I dont doubt that for a second but I would really like to try it. I ain't doing nothing else right now with my time except watching marathons in my pajamas and its something I have always been wanting to do. Kind of like bungie jumping or sky diving maybe those are less risky endeavors at that but I want to try it none the less. So help me. Lol

 

[tlance]

Sounds like a good way to go broke and divorced. You did get me curious to do some reading on the matter. Here's a article that I felt sounded right.

Why Day Trading is a Loser's Game - StockTrader.com

Warren Buffett sums it up best,

With enough insider information and a million dollars, you can go broke in a year.


3. Taxes and the costs of trading are a serious hurdle
This comes back to #9, but it’s worth breaking down the basics. Here are the key terms to understand:

• Short term capital gains tax – “Short term capital gains do not benefit from any special tax rate – they are taxed at the same rate as your ordinary income. For 2015, ordinary tax rates range from 10 percent to 39.6 percent, depending on your total taxable income.” – TurboTax
• Long term capital gains tax – “If you can manage to hold your assets for longer than a year, you can benefit from a reduced tax rate on your profits. For 2014, the long-term capital gains tax rates are 0, 15, and 20 percent for most taxpayers. If your ordinary tax rate is already less than 15 percent, you could qualify for the zero percent long-term capital gains rate. For high-income taxpayers, the capital gains rate could save as much as 19.6 percent off the ordinary income rate.” – TurboTax
• Trade Commission – Charge to buy or sell stock.
• Order Execution Quality – Many brokers sell high frequency trading firms the right to “peek” at your order and more or less screw you on your fill. This is called payment for order flow. Despite being $.01 or $.02 per share, poor fill costs can add up real quick when you trade frequently.

Out performing the S&P 500 in any given year is a feat in itself, but when you then take into consideration taxes, commission costs, and research (those hot stock pick services, chat rooms, and market newsletters don’t come for free), the game becomes that much more difficult.

Lesson: When taxes, commissions, and other costs of trading such as research are taking into consideration, the challenge of outperforming the market year after year as a career are compounded.

2. Confirmation bias and your emotions are your worst enemy
Trading is a mental game. The mind is a beautiful thing, and given a runway of endless inspiration data, it can wreak some serious havoc.

Confirmation bias definition via Wikipedia,

Confirmation bias is the tendency to search for, interpret, prefer, and recall information in a way that confirms one’s beliefs or hypotheses while giving disproportionately less attention to information that contradicts it.

In the trading world, this means you see a setup or price action and quickly convince yourself to buy or sell. Unfortunately, 99% of the time you should be doing the direct opposite.

Technical analysis is one of the worst in provoking this natural human behavior. “Oh, I’ve seen this pattern before, it’s a buy”. There is a reason why online brokers offer dozens and in some cases hundreds of technical indicators. Indicators encourage you to see more “patterns” and trade more frequently.



Think #2 would really apply to you, no offense meant.


Closing Thoughts
For new investors getting started, trading should be a quest for knowledge, not about getting rich.

While I have no regrets of investing thousands of hours into the markets over the past 18 years, I’ve had to accept the reality that my retirement portfolio would be further ahead had I understood these truths from the beginning:

• The “lifestyle” of a successful day trader is a big fat lie
• You really need at least a $1,000,000 portfolio to trade full-time
• The odds are dramatically stacked against you
• Allocate 5% or less of your portfolio to trading (speculating) and invest the rest in low cost index funds
• The effect of compounded returns over the course of several decades is amazing
• Taking tips from people “smarter” than you is a terrible idea
• One trade can easily make or break your year (or career)
• Taxes and the costs of trading are a serious hurdle
• Confirmation bias and your emotions are your worst enemy
• Passive indexing is the best path forward for 99.9% of Americans

If your mentality is to use the market as a vehicle to supplement income or get rich, stop yourself, you’re already primed for failure. Day trading is a loser’s game.

@The Foot

This is the best, and most in-depth advice you could possibly get.

Most professional traders don’t even beat the market consistently because of the costs associated with commissions, fund fees, etc.

Much more likely to go broke than hit it big, and I also worry about you specifically given your interest in sports gambling of late. Day trading is really just a legal form of gambling. Except this one is even harder to beat over the long run.

 

[tlance]

I absolutely understand what you guys are saying. And I'm sure you know what your talking about. I dont doubt that for a second but I would really like to try it. I ain't doing nothing else right now with my time except watching marathons in my pajamas and its something I have always been wanting to do. Kind of like bungie jumping or sky diving maybe those are less risky endeavors at that but I want to try it none the less. So help me. Lol

If you really must, then just like gambling, only play with money you can afford to lose. Set strict limits for yourself and when the money is gone, the money is gone.

Also, when you do inevitably hit a bit of a losing streak, take some time on the sidelines and get your mind right before getting back in. People tend to make the worst decisions when they are chasing losses trying to get their money back.

I used to play online poker, when it was legal. I was pretty good. Made about $30K profit in 1 year playing mostly $100 and $200 buy in tables. I say mostly, because my earnings would have been a lot better if not for a couple epically bad days where I chased losses on higher stake tables and literally lost $2K 1 day, and $3K another.

And that was well beyond the limits I had set for myself. Scared the hell out of me and also indicated it was time for me to stop playing. It is a slippery slope.

 

[averagejoe]

I have trouble navigating through FREE and everyday expenses. Not gonna chase after wind with real money.

 

[SteelersPride]

I absolutely understand what you guys are saying. And I'm sure you know what your talking about. I dont doubt that for a second but I would really like to try it. I ain't doing nothing else right now with my time except watching marathons in my pajamas and its something I have always been wanting to do. Kind of like bungie jumping or sky diving maybe those are less risky endeavors at that but I want to try it none the less. So help me. Lol

why dont u just do stocks......

 

[Dolemite censored]

Thinking if getting into it and would love your advice of best way to get started

Whatever platform you go on, its not as advanced as those AI enhanced programs the major hedge funds, banks and professional traders use.

The odds are stacked against you.

 

[Dolemite censored]

Let's start with, how much do you know about funds, bonds, stocks and their derivatives?

 

[The Foot]

Let's start with, how much do you know about funds, bonds, stocks and their derivatives?

That would be zero. I did some research but I have a lot more to do. I think I want to trade in forex. I'm trying to find a good place to open an account. I'd like to be able to make as many day trades as I want with out having to keep a 25k min. Also like the idea of trading 24 hours a day. And from what I researched you can do with forex.

 

[Dolemite censored]

That would be zero. I did some research but I have a lot more to do. I think I want to trade in forex. I'm trying to find a good place to open an account. I'd like to be able to make as many day trades as I want with out having to keep a 25k min. Also like the idea of trading 24 hours a day. And from what I researched you can do with forex.

Hard stop. This is not a video game.

Understand what the fuck you are dealing with first.

If I have to tell you any more I've wasted my time.