Daytrading Stocks & Index Futures

Article43

Hi All,

As far as I am aware, there are no good Irish boards for Irish Daytraders to converse and share ideas. Hopefully, this will become the first.

In fact, I don't think that there are too many Irish Daytraders out there ?

I will try and make this thread interesting for those that want learn about Daytrading, noting its many advantages and disadvantages.

Feel free to ask any question you like, and if I don't know the answer I will tell you straight away. I do not pretend to know something that I don't, as this can cost you bigtime when you are trying to take money from the big boys who control the markets.

Do not ever be afraid to ask a question, for without asking how is one to learn anything of value in life !

Article43

Before we start, let me first mention that in order to have any chance of making money Daytrading, one must first pick the best markets to trade. I will intentionally try and keep away from the textbook stuff, as most of it is nothing but rubbish, but at times it will be the only way that inexperienced traders will be able to associate with what I am saying, so I will try and phrase my posts so that they can be understood by all.

The best Stock Market to Daytrade is the Nasdaq, then followd by the NYSE. As people ask questions, and answers are given, it will become apparent why this is so.

All I will say for now, is forget about Daytrading Irish or UK shares, it just does not work, for many reasons, the main ones being volatility and liquidity.

So, with that, the bulk of the discussions on this thread will be in relation to the following markets:

1. Nasdaq Stocks
2. NYSE Stocks
3. S&P 500 Mini Futures - symbol is ES on Globex Exchange
4. Dow Mini Futures - symbol is YM on ECBOT Exchange

These are the 4 main markets traded by Daytraders worldwide, and the ES on Globex is the most liquid of them all, but can also be the hardest to trade. Remember, the most liquid markets will have the best traders assigned from the big institutions, so to take money from these sharks, you need to be very good and have the correct setups for trading. Many traders have lost a small fortune trading the ES alone !

Article43

Next, after identifying the best markets to Daytrade, one must pick a broker that will give acces to all of these markets. Some of the most important things to consider when selecting a Broker, are:

1. Industry Leader - if the go bust you will get your money back !
2. Commissions and margin requirements - the lower the better.
3. Live Data Feeds via internet with low cost data subscriptions.
4. Charting facilities - not as crucial as the first three, but can save you a lot of time and hardship if your chosen broker has live charting features as standard.
5. Demo trading facility with live market data - crucial for beginners !

For the purpose of this discussion, I will be suggesting that those who are serious about daytrading consider looking at IB, or Interactive Brokers, as they are one of the brokers that I use.

Selecting a broker is a personal choice, so no more on that, but just make sure that your selected broker fullfils the basic 5 requirements as set out above.

daveirl

This post has been deleted.

IrishMike

This is something I am very interested to get involved in.
What kind of initial outlay are we talking Article43?

drdre

Very interesting as i would like to get into this.

Article43

Hi Guys,

I am glad to see that we have some genuine interest and I will answer your questions as best I can. Remember, anything worthwhile requires hard work and dedication. Do not be fooled by the scores of websites that offer systems with an 80% win rate, as common sense should tell you that this is nothing more than a sales and marketing gimmic. Making money, no matter what way you do it, is always hard. Finding the best way to do it, for the least anmount of risk, should be top on the priority list.

AS we continue, I do not have available time all of the time, so if I post with spelling errors or whatever, than that is how it will be. I am not here to improve on my English comprehension, I am here to share my experiences with others, as sharing is good, and those that share will always receive, it is how things work.

Article43

daveirl wrote: »

This post has been deleted.

Yes and No, and I am not being smart.

I have done it fulltime for 1 year in the past, meaning no other income apart from daytrading, but that was a big mistake. Well, it should not be called a mistake really, as mistakes are nothing but past experiences that we learn from. In a nutshell, if you are under pressure you will make mistakes, and being under pressure when trading will only result in one thing, and that is losing your money.

Do I trade live now ?

Yes, I do. I currently trade the ES and FTSE 100 futures, and Options, but forget about Options for now as they are far more complicated than daytrading stocks and index futures. Options trading requires its own thread. I can do this along with what we call a normal job, and this is the approach that I would recommend to anyone that asks me. Unless you have a lot of money, and I mean around 500K+ Euro, then forget about daytrading as the only job you do.

This does not mean that you can't daytrade. We in Ireland have a big advantage over our US counterparts, and that is the time zone difference.

The US stock markets close at 9pm our time, and there is even extened hrs trading, but that can be dodgy and is best avoided.

As we speak, the ES is at 1470.00, that is -5 pts or $250 for 1 contract.

The YM is at 13309, -40 pts or $200.

FTSE 100 futures are at 6329, -84 or 840 quid sterling !

Article43

IrishMike wrote: »

This is something I am very interested to get involved in.
What kind of initial outlay are we talking Article43?

Well Mike,

If you are level headed, are willing to do the required work and learn, and willing to lose some money in the form of live trading (this is going to happen no matter what you do !), then about 5K euro should be adequate.

A bit less might do, but 5K is OK.

The initial goal is to learn - after all, we all had to crawl before we could walk, did we not !

ixus

Hi Article43, I agree there is little discussion around Irish forums at present and I wish there was.

Where you will find some discussion is :

www.askaboutmoney.com
www.askaboutshares.com
www.arandomwalk.com
www.thepropertypin.com Central Bank section.

non-Irish : www.trade2win.com

I have some questions.

Why are you starting this here/now? (As a new posters I have to look at any advice you give more skeptically than usual.)

Are you planning on giving tips or are you looking for open discussion about certain shares or strategies?

So far what you have posted I'm taking as :
1. Only trade in highly liquid stock indexes
2. Get a broker that provides you with real-time info & execution & is cheap
Correct?

What advice are you planning on supplying next? (a brief content before an indepth post would be appreciated)

What is your background?

Using non-Irish brokers/stocks such as Nasdaq will result in tax problems potentially.
How do you propose handling these?

I think they're all pretty fair questions and warrant answering before providing much more info.

Thanks.

Ixus

Article43

drdre wrote: »

Very interesting as i would like to get into this.

Yes drdre,

Not only is it very interesting, but it is also the only job where one can make good money without having to have any qualifications in anything. In this day and age, that is a very rare thing indeed.

The markets are like a big Casino, but with a major difference.

Do you want to try and answer as to what the major difference might be between a Casino as we know it, and trading the markets ?

ixus

Personally, I'm more interested in purchasing options on at this moment in time. Given the present volatility in the market, the opportunities for profit are quite high, and in purchasing, you are only left open to loss of the premium. Much more potential than stocks/futures. Wouldn't you agree?

Article43

ixus wrote: »

Hi Article43, I agree there is little discussion around Irish forums at present and I wish there was.

Where you will find some discussion is :

www.askaboutmoney.com
www.askaboutshares.com
www.arandomwalk.com
www.thepropertypin.com Central Bank section.

non-Irish : www.trade2win.com

I have some questions.

Why are you starting this here/now? (As a new posters I have to look at any advice you give more skeptically than usual.)

Are you planning on giving tips or are you looking for open discussion about certain shares or strategies?

So far what you have posted I'm taking as :
1. Only trade in highly liquid stock indexes
2. Get a broker that provides you with real-time info & execution & is cheap
Correct?

What advice are you planning on supplying next? (a brief content before an indepth post would be appreciated)

What is your background?

Using non-Irish brokers/stocks such as Nasdaq will result in tax problems potentially.
How do you propose handling these?

I think they're all pretty fair questions and warrant answering before providing much more info.

Thanks.

Ixus

Hi Ixus,

Very good questions, and you are correct to question anything you read on any website, I know that I do.

I know about all of the forums you mentioned, and more like elitetrader, dailyfx, etc, etc, etc.

Here is what I am doing, and remember, one must evaluate what I have written before one can decide on the merits of the information contained. This will require some work. I am not here to give tips to anyone, and I would never take a tip from anyone, it is the one sure way to lose money.

I am here to share some of my trading experiences with interested individuals, which now is 8 years as I started in Sep 1999. My background is irrelevant, what I write aboyt daytrading is very relevant to making money in the markets, as I have several years of experience, good and bad, behind me.

A major misconception about trading is that you need to have a good education. This is pure rubbish. Actually, I will go as far as saying, that a person with only limited education, will make a far better daytrader than a highly qualified academic, and the underlying reasons for this are many, but are better kept for a daytrading related Psychology thread.

I am not interested in arguing, or tit for tat silly remarks, just plain and simple discussion on the aspects of daytrading.

Tax, and other such issues, are personal issues, and as such I have no intention on discussing same in detail. As of now, if you make money from trading, you must declare it as CGT, unless you plan to include it in your personal income for the relevant tax year. Where you make the money is irrelevant.

Article43

ixus wrote: »

Personally, I'm more interested in purchasing options on at this moment in time. Given the present volatility in the market, the opportunities for profit are quite high, and in purchasing, you are only left open to loss of the premium. Much more potential than stocks/futures. Wouldn't you agree?

No, far from it actually !

I do not want to bring Options into this thread, for many reasons, but if you want to start one I will contribute.

Selling Options is where the profits are in option trading, but you must have plenty cash and know what you are doing. The reason for this is simple, and that is, over 80% of traded options expire worthless !

Please start a new thread if you want to continue a discussion on Options, but as of now, the free time I have will be dedicated to this thread, as I am interested in sharing some of my daytrading experiences with interested individuals.

Article43

As you start to get interested in daytrading, you will do some book reading, some web searching, and visiting other trading related forums to see if what you are doing is correct.

But, always remember, that the majority of traders lose money, so it is logical to conclude, that if you follow the majority, you will also lose money !

One of the things that you will hear a lot about, is, an "Edge".

What does having an edge really mean ?

Well, in plain and simple, bog standard Paddy the Irishman language, an edge will mean different things to different people, but it can only really mean one thing, and that is:

When you place a trade in the market, the odds of the trade moving in your favour are greater than the odds of it moving against you.

You can argue this till the cows come home, but if you accept this as the real true meaning of an edge, then you will save yourself an awful lot of time and money, believe me, I know !

The above statement opens up a whole bunch of questions in relation to trading, and now you must start to ask yourself what do I need to do, to get The EDGE ?

Article43

It may be more beneficial if members were to post their view as to what daytrading involves.

Instead of me telling you all what I can, and can't do, why don't you say what you think is the way to do it. Then, when I answer your post with a question, you will have to think why you thought the way you did, and when you see the problems explained, and believe me, they are many, you will remember it a lot easier.

Article43

ixus wrote: »

Personally, I'm more interested in purchasing options on at this moment in time. Given the present volatility in the market, the opportunities for profit are quite high, and in purchasing, you are only left open to loss of the premium. Much more potential than stocks/futures. Wouldn't you agree?

Apologies ixus, as I see there is a thread already started on Options by you. I will do a post or two there, but I will not have time to post a lot, and I am going to use what ever time I have to post in this thread, as this is my main focus area.

telecaster

Hi Article 43,

I'm enjoying reading what you've posted so far.

Alas I'm a cynic and am compelled to ask your motives. They may indeed be genuine and I mean no offence if that's the case. But you seem to be doing well from this niche, why would you wish to divvy the portions from the golden goose by educating the masses? Surely your time would be better spent grafting at the markets than teaching a 101 class here?

That being said, the 101 class is most welcome

Article43

telecaster wrote: »

Hi Article 43,

I'm enjoying reading what you've posted so far.

Alas I'm a cynic and am compelled to ask your motives. They may indeed be genuine and I mean no offence if that's the case. But you seem to be doing well from this niche, why would you wish to divvy the portions from the golden goose by educating the masses? Surely your time would be better spent grafting at the markets than teaching a 101 class here?

That being said, the 101 class is most welcome

Very good comments telecaster, and I can see that you are a genuine person.

Trading can be a very lonely business, and even more so in Ireland as very few do it, and those that do dabble, like the majority of TICN members, do not have a clue about real daytrading, and what it involves.

One of the biggest obstacles that faces anyone who daytrades, is keeping control of your emotions. One of the best way to control your emotions is to feel good about yourslef. The best way to feel good about yourself, is to share experiences, good and bad, with like minded people.

Also, on another sidenote, but this is not why I am doing it, it is well known that those who have made it big, have made most of what they did from sharing with other people, in one way or another. I could mention the Bible, but I prefer to leave religion out of it alltogether, as I don't care if someone is an atheist or a bishop, all that matters to me is that they are truthful and genuine.

I have no motive other than the continual pursuit of excellence with my trading activities. If sharing with like minded people helps me achive this, then this is what I will do, if it does not, then I will stop and do something else that will. I will not, however, entertain time wasters and would be traders who think they know what they are talking about. I have a good deal of experience behind me, and as the saying goes:

Fools learn from their own experiences, wise people learn from the experiences of others.

It is everyones own decision as to whether they want to be a fool, or a wise person !

As I am not fulltime trading at the moment, I can share some of my experiences with like minded people. This might change next year, but as of now I see muslef continuing with my current trading activities, which is trading the ES & YM Futures, US Stocks and Index Options.

I can't be more honest than that !

PDelux

I started day trading recently because of the volatility in the markets and i see it as something which complements my position trading where I hold
positions for weeks.

I actually trade daily contracts of US stocks on the IG index spread betting
platform. (no tax or account charges)
The only problem is I dont have volume information but i have found that it does not matter in the way i trade.

I use a number of techniques to find the stocks:
1. Scan for pre-market gappers
2. Scan for stocks near support/resistance lines
3. Other misc less important scans
4. or just trade the "popular" stocks (VMW,DRYS,AAPL,RIMM,etc.)

On these stocks i use a combination of S/R lines, chart patterns and 5 period
EMA to enter the trade, both long and short.

As I said, I'm only doing it recently but it's going well so far and i enjoy it.
Only problem is i am in full-time employment so sometimes its hard to do in the office.

telecaster

I appreciate your reply Article 43. I'll be reading the thread and will contribute when I've got something worth saying.

Do you use bookmakers and betting exchanges as part of your trading armoury?

Article43

PDelux wrote: »

I started day trading recently because of the volatility in the markets and i see it as something which complements my position trading where I hold
positions for weeks.

I actually trade daily contracts of US stocks on the IG index spread betting
platform. (no tax or account charges)
The only problem is I dont have volume information but i have found that it does not matter in the way i trade.

I use a number of techniques to find the stocks:
1. Scan for pre-market gappers
2. Scan for stocks near support/resistance lines
3. Other misc less important scans
4. or just trade the "popular" stocks (VMW,DRYS,AAPL,RIMM,etc.)

On these stocks i use a combination of S/R lines, chart patterns and 5 period
EMA to enter the trade, both long and short.

As I said, I'm only doing it recently but it's going well so far and i enjoy it.
Only problem is i am in full-time employment so sometimes its hard to do in the office.

Hi PDelux, and welcome.

What one will begin to see after a while, is that no matter what someone shows you, you will always be inclined to go and do your own thing anyway. This is because of how our brain operates, and it is also the main aspect of trading that needs to be mastered, with that, I mean that just because we are doing something, does in no way mean that there are not better and more rewarding ways out there for us to learn - but as you rightly say, and do, one has to start somewhere.

Some will progress beyond the initial excitment of trading, and some will even take it to the extreme, and end up as gamblers, risking everything that they have worked so hard for over many years !

A level headed approach is required, and as I am sure that none of us want to end up as professional gamblers, then the first and most important aspect of trading is understanding what Risk control really means, and more importantly how we impliment it into our trading strategies.

Making money from trading can be very easy at times, as all we have to do, is buy it at a certin price, and sell it at a higher price (Long), or, sell it at a certain price, and then buy it back at a lower price (Short).

Now, right as I speak, the ES is at 1468, off its low of 1462.50, but it is now just gone 10:00, so we will now have a continuation of the downtrend, or a reversal to the upside. Of course, it might hang around for a while, but it normally does not stay in the same place for too long.

So, all you need to do to make money, is Buy or Sell it.

Which one would you do now, and why ?

Article43

telecaster wrote: »

I appreciate your reply Article 43. I'll be reading the thread and will contribute when I've got something worth saying.

Do you use bookmakers and betting exchanges as part of your trading armoury?

WE all have something worthwile saying telecaster, we just need to say what we really think, and not expect criticsm or insults, but we must accept facts when presented to us, no matter what our opinion is. The majority of internet boards are rife with idiots who do nothing but waste their own time, and more importantly, other peoples time. Such individuals are not welcome here as I have no intention of wasting my time with them.

As for spreadbetters, no, I have no interest in that for the type of trading that I do. This, however, does not mean that it doesn't suit other people !

Article43

Well, it could be one thing that you need to know about daytrading above everything else.

Recently, some of our very own property tycoons, had decided to make another few cool million in the stock market. After all, Bertie came on the telly and told the nation that all the experts got it wrong in relation to the property market, and prices are still going up !

So, our millionaire property tycoons decided to use leverage, by trading CFD's - or Contract For Difference notes - after all, Bertie was also kind enough to remove the 1% stamp duty that would apply if normal shares were bought on the Irish stock exchange.

Next, we had the sub prime fiasco released by the powers that be in the US.

SLAM - our property tycoons got caught bigtime, many of them having to sell off some of their big property portfolios to cover their huge LEVERAGED stock market losses.

They could have all avoided this, had they taken adequate RISK control measures with their realised profits from the property market. But as usual, they are a greedy bunch, and in the end, they got exactly what they deserved, after all, they have been ripping off young couples for years, and making it imposible for many young families to get on the property ladder. What goes around, comes around !

Now, in simple terms, if you lose all of your money quickly, then how are you ever going to learn how to daytrade ?

The best way to not lose your money quickly, is to first practice, until you are happy that you can at least enter and exit the market quickly, as and when required, and can at least have some winning trades, as well as losing trades. The amount you can lose should always be known before a trade is placed, the amount you can win, will always be determined by the market, not by what you think it might be !

RISK control is the first, and most important step for daytrading, or any trading for that matter. To ignore it, is to lose, before you even start to win.

mox54

Can I just throw this nugget of info inot the ring here!!, recently a professional stocktrader and a monkey were given a sum of money to invest in the stock market (not necessarily daytrading as such but illustrates a point for me), they both picked their stocks from the same lists of leading companies, ftse100 etc, simply put....the monkey won!!!!!:rolleyes:

Anything to do with stocks and markets that is not driven by massive amounts of money and expertise oooozing from every orifice is only a half arsed effort to make a few bob quickly and is not too far removed from gambling!! i.m.o.!:p

Time Magazine

mox54 wrote: »

Can I just throw this nugget of info inot the ring here!!, recently a professional stocktrader and a monkey were given a sum of money to invest in the stock market (not necessarily daytrading as such but illustrates a point for me), they both picked their stocks from the same lists of leading companies, ftse100 etc, simply put....the monkey won!!!!!:rolleyes

It was probably over the course of a week. Over a longer time period, randomly choosing your shares (unless you choose a very large number of them) will lose to rational, fundamental-based investing 99 times out of 100.

mox54

if i recall, it was over a 12 month period whereby they were asked to choose those shares that will most likely rise in the next 12 months and make them a few bob however I accept your point and again would argue that trading from your front room is wasteful and foolish and not to be advised, a fully professional team of traders with the very latest technology and systems available to them find it hard to do so surely doing it from you're dell laptop with a cup of coffee at the kitchen table is crackers!!!

Article43

Good posts guys, but no matter who picked the trades, one of them had to win, and in this instance, it happend to be the monkey !

If you ask me, there is not much difference between them anyway !

What were the odds of either one of them winning ?

Hint: As soon as you enter the market, the price can go anyway, but it is how far the price can go, where you need to focus, not just the direction that you think it can go !

ChartTrader

Ibid wrote: »

It was probably over the course of a week. Over a longer time period, randomly choosing your shares (unless you choose a very large number of them) will lose to rational, fundamental-based investing 99 times out of 100.

Not true. There have been numerous such competitions (monkey v fund manager, etc). It was Prof. Burton Malkiel in A Random Walk Down Wall Street who first made the comparison ("a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.")

I'm not a Malkielite and disagree with many of his conclusions. Nevertheless, he has been proven right on this point. Fund managers, analysts, brokers etc like to pretend they know more than they do. The vast, vast majority of them underperform the market averages (as do the vast majority of private investors and traders). Always have, always will. Take their "rational, fundamental-based" prognostications with a pinch of salt.

DJDC

Remember, the most liquid markets will have the best traders assigned from the big institutions, so to take money from these sharks, you need to be very good and have the correct setups for trading

Article43 I assume you are talking about OTC derivatives here.How can someone sitting at home possibly hope to compete with the S & T departments of investment banks in London and New York, not to mention the hedge funds. Surely the key to stock market success is about getting valuable information before others do, and then being able to carry out quickly the right trades to make. Sure banks with their teams of equity researchers and quants have a clear advantage over the sit at home investor in this regard? I am not refuting your opinion, I just would like to hear your prespective on the issue.

A major misconception about trading is that you need to have a good education. This is pure rubbish. Actually, I will go as far as saying, that a person with only limited education, will make a far better daytrader than a highly qualified academic, and the underlying reasons for this are many, but are better kept for a daytrading related Psychology thread.

Tell this to any of the major banks,HF's etc. It's got so competitive you wont get near a FO trader position without top academic qualifications from the best universities.

mox54

I am not professing to be any kind of expert here but all markets deal in the same constant - time, they all perform over time and over any period of time a market goes up and becomes profitable for you, it's just a matter of how long you are willing to wait and what patterns you see over time that can make you a lot of money, recently markets/stocks have dipped and speculators bought them up by the bucketful to sell them when they bounced back, as they have, i.e. AIB,BOI etc., it's not rocket science but the maths geeeeeks have made a fortune making it rocket science which brings me back to my original point!! - a monkey can do it but to do it well and make real money you need loads and loads of money, expertise and TIME, doing this at home is dangerous!!

Time Magazine

ChartTrader wrote: »

A Random Walk

I understand this point; you mis-interpreted mine.

Rational investing means inter alia diversifying risk. A monkey, or the many people suggesting throwing all their money into NRK a few ago, will not perform as well as a well-diversified portfolio over the long-run or in repeated occurrences.

The "throwing of darts" idea is a bit of a red herring as it suggests doing it blindly but is actually diversifying by default once you hand a monkey enough darts.

Article43

DJDC wrote: »

Article43 I assume you are talking about OTC derivatives here.How can someone sitting at home possibly hope to compete with the S & T departments of investment banks in London and New York, not to mention the hedge funds. Surely the key to stock market success is about getting valuable information before others do, and then being able to carry out quickly the right trades to make. Sure banks with their teams of equity researchers and quants have a clear advantage over the sit at home investor in this regard? I am not refuting your opinion, I just would like to hear your prespective on the issue.



Tell this to any of the major banks,HF's etc. It's got so competitive you wont get near a FO trader position without top academic qualifications from the best universities.

Why not DJDC ?

All you need to be able to do is buy / sell at one price, and then sell / buy at another price when the market has moved in your favour. It is that simple, and no matter what the big players have, or do, it is there for all to see, in plain black and white !

The days of the SOES traders are long gone, where only those with access to powerfull computers and specialised order entry platforms were able to beat the big boys at their own game.

Now, with SMART order entry, if you fire in a 1000 share lot order at market, the brokers software will automatically search all the ECN's and Exchanges for the best prices and fill you accoordingly !

The key to stock market success is really understanding what Risk control means, and then developing a strategy that puts the odds in your favour when you place trades for the developed strategy. It has nothing to do with picking the right stock at all.

Just look at the pension funds. They have lost back all the gains they made this year, and more even !

Now, can you honestly say that the people placing trades for these funds know about Risk control, for the correct answer is No, for by the mere fact of them giving back profits clearly shows that they don't. Also, they are not allowed to sell short, as it is seen as being too risky - now if that is not a big joke then I don't know what is ?

Ask anyone who has to take out their pension this month what they are now going to get, and all becuse selling short is too risky !

They are nothing but a bunch of muppets, or puppets, as daytrading has nothing to do with stock picking, analyst ratings, p/e ratios, or any of that crap. They say the Economics is a sciene, but they are all wrong. You can not apply science to emotions, and daytrading is emotions personified.

Now, you can all argue until the cows come home, or you can all accept this fundamental truth about the markets, Weigh up my comments, look at the hard facts about pension funds and hedge funds, and in the end, you will see that they are nothing more than another big commercial excercise to get people to part with thier hard earned money - remember, those that run these big businesses get paid a lot of money, no matter what happens to the money that Mr Gullible has given them to control.

As for the commentators, Jim Power, Eddie Hobs, George Lee, and the myriad of other puppets, well, all I will say is that if you listen to them then you would want to have your head examined.

Take control yourself, and forget about what others say. Do some real research, then simulate and test, start small and grow it slowly. Rome was not built in a day, as we all know, so do not expect to make a lot of money from daytrading in a very short space of time, it is very hard, and the reality of daytrading is that it is 95% psychological and 5% mechanical - get that balance wrong from the start and you might as well give your hard earned money to the pension fund cartels.

One mans opinion is another mans downfall !

Question, Question, Question !

And if the answers are not understood, then there can be only 2 things wrong:

1. You dont have enough information about the subject matter to make an educated decision ?
2. The person / people who are giving you the information are talking out their backside !

Most people have both of these problems when it comes to daytrading, or investing for that matter !

The ability to quickly identify these 2 issues, is the difference between a fool, and someone who is wise, and remember,

Fools learn from their own experiences, wise people learn from the experiences of others !

But, the ability to quickly filter out the rubbish is a matter of training your brain to do so, and this anyone can do, so in theory, we all have the ability to be a genius, but in reality, the majority will remain as fools !

Hope this helps somewhat ?

Article43

mox54 wrote: »

I am not professing to be any kind of expert here but all markets deal in the same constant - time, they all perform over time and over any period of time a market goes up and becomes profitable for you, it's just a matter of how long you are willing to wait and what patterns you see over time that can make you a lot of money, recently markets/stocks have dipped and speculators bought them up by the bucketful to sell them when they bounced back, as they have, i.e. AIB,BOI etc., it's not rocket science but the maths geeeeeks have made a fortune making it rocket science which brings me back to my original point!! - a monkey can do it but to do it well and make real money you need loads and loads of money, expertise and TIME, doing this at home is dangerous!!

Incorrect mox54.

This is what the textbooks teach you, but it should now be obvious, that when 1+ years of gains can be wiped out in a matter of weeks, then there is something fundamentally wrong !

Socrates had a famous phrase that went something like:

"The only thing that I really know, is that I know nothing at all"

Now, if Socrtaes was right, which I believe he was, then why should we think that what is written in the textbooks is right, for, according to Socrtaes, we all know nothing about anything, and would you listen to someone who knows nothing about what they speak, and even better, give them your hard earned money to control, with no sound Risk control applied, and let them take a % commission no matter what happens to the money, even if it loses 50% in value !

Again, the only way is to make an educated decision based on the facts, but, not too many will do that, and the reason is simple, and that is, it requires some very hard work to come up with the facts, and the majority of people, curl up and die, when it comes to hard work !

Article43

Before I go, and just to get back on track, this thread is about daytrading, so lets not fall into the big common mistake of going off topic !

As a side note, as it is daytrading related, ask the 3 wise men to explain to you how to read market momentum with TOS screen, or how to read short term market liquidity with Level II screen ?

I bet you they will think you are talking about a PC screen cleaner product !

PDelux

I agree with a lot of what's been said.
The stock market in the long term will always go up. So if a monkey picks any stocks the chances are they will eventually go up.

I was looking at the fund manager competition in the Irish Times recently and
found it funny that when they started losing money some of them turned to
the popular momo stocks to get quick returns.
That was an extreme example because its a short competition but fund managers these days are under pressure to get better returns and many are seeking faster ways to make money including going to emerging markets. A couple of months ago more than 50% of the top 10 stocks where fund manager money was going were Chinese stocks according to MSN, even though there is obviously a bubble there.
The point is that the days of the old value investor are nearing an end.
Even look at the new change where these managers can now sell short. Doesnt mean they will but they have more options now.

So in the short term traders can make money no matter what stocks they trade it is just that with spreads etc. you have to give yourself an advantage by trading the more liquid "popular" stocks or breakout stocks to get bigger
returns. As I said in a previous post you can read the market to find changes
in momentum and trade in that direction. That's just what day traders do IMO.

Article43

Hi PDelux,

Your comments are welcome, but I must again stress that we are starting to go off topic. Maybe I should try and expalin it a little better.

When we talk about daytrading, we have not the slightest bit of interest in investing, a bull market, a bear market, pension fund managers, hedge funds, investment clubs like TICN, or any other investment related topics.

The reasons for this are very simple and logical.

When we daytrade we :

N1. Never take any heed of what the muppets say.

N2. Never take any heed of news reports, except for the times of release for the major US reports and individual stock earnings reports.

N3. Never hold a position overnight.

N4. Never risk more than 0.1% (for beginners, rising to a max of 1% for very experienced daytraders) of our trading capital on any single trade.

N5. Never let a winning trade turn into a losing trade.



A1. Always do the required work prior to the US market opening.

A2. Always check our data feed is working correctly before we start.

A3. Always have a back up system ready to close an open position should we experience any problems with data feed or power supply.

A4. Always review our trading at the end of each day to ensure that we have done what we need to do, not what we would like to do.

A5. Always make sure that we are aware of any errors from the last days trading results.

A6. Always try and correct the previous errors so that they do not show up again in todays trading results.

Your comment in relation to "in the short term traders can make money no matter what stocks they trade" is not correct.

The reality is that very few traders can make money and hold on to it, so, even if some do make money in the short term, which will be a very low %, the odds are they will give it back, so, in effect, thay have not made any money at all, in fact, you will find that most of them lose money in the short term, and lose even more money in the long term !

Why is this so ?

Simple, they do not know what they are doing, for if they did, they would be able to make money and hold on to it !

mox54

I'm sorry to say, this still sounds like a very easy way of loosing money and playing games with stockmarkets!, I appreciate that if the research is done before 2.30 and you pick the right stocks that you can make a few bob but you also need to put in a lot of yo-yo's to make the gain, the markets are very unpredictable and a good set of results might not mean a good opening share price!.

I'd leave this to the experts and grown up people and leave the games to the kids!!:o

Article43

mox54 wrote: »

I'm sorry to say, this still sounds like a very easy way of loosing money and playing games with stockmarkets!, I appreciate that if the research is done before 2.30 and you pick the right stocks that you can make a few bob but you also need to put in a lot of yo-yo's to make the gain, the markets are very unpredictable and a good set of results might not mean a good opening share price!.

I'd leave this to the experts and grown up people and leave the games to the kids!!:o

You are 100% correct mox54 !

It is a very, very, very easy way of losing money, and the majority actually do, that is one of the main reasons for this discussion, and that is, to talk about how not to lose all of your money daytrading, for before one can win, one must first learn how to lose, and accept that losses are an integral part of all trading strategies !

A set of results have nothing to do with it !

Again, and I do not blame you one bit in the least, but in order to try and understand what daytrading is all about, you need to dramatically re-think about all what you know to date in relation to the markets.

This is exactly why I said in an earlier post, that those with a basic education make better daytraders than those with a very impressive academic background, and I have mentioned the reasons why previously.

A daytrader should have a sound trading strategy, that is tried and tested and has proven that it puts the odds in the traders favour.

Remember, there is a very thin line between daytrading and gambling, and the thin thread that makes all the difference is called Risk control.

I don't think I have yet mentioned that this is easy, quite the opposite actually, but everyones knows it is possible, as all you have to do is buy / sell, and then sell / buy when the price moves in your favour.

Now, the opportunity factor is also a key thing, and the ability to recognise opportunity only comes from experience.

Combine risk control with opportunity, and you now have the required Edge, that will allow you to play along with the big boys, instead of playing against them, as they will always win, no matter what.

BTW, who are the experts you speak of, for we all know who the grown ups and the kids are !

And again, I must stress, and will continue to stress, that once you select the most liquid stocks to trade, and there is a process for this, you then never have to worry about "picking the right stock".

Picking the right stock, in the sense that you imply, as in associating the right stock with news, fundamentals, or all the other rubbish, is not the way to daytrade, and again, this thread is not about investing, we will leave that to the expert pension fund managers and hedge fund gurus, the ones who let Mr & Mrs Gullibles' account be cut in half in a matter of weeks, some experts they are, huh !

mox54

is risk control is a form of statistical probability that will give you some kind of a predicted result given certain factors, e.g. inflation, growth, employment indices etc etc and if so does it give day traders the right(in their eyes) to call themselves proper traders and not glorified gamblers with a bit of fancy maths and software thrown in to confuse the humble punter with a few bob to spend!, apologies if I sound sceptical but I am!.

Article43

You are again 100% right to be sceptical.

Question, Question, and Question again, everything you read, especially on internet forums !

Now, let me try and answer your question with a simple request:

If you had $30,000 dollars in your account (we will stick with dollars as we are talking about US markets ) and I told you that the system used to identify trades will have an 80% chance of winning, as many of the systems for sale to the public quote an 80% success rate, and on average, you will get 5 trades per week to place, or 1 per day, how much of the $30 K would you risk per trade?

Now, you must answer this honestly, and say the figure that you are most comfortable with.

mox54

$30,000 is a tidy sum, tucked away in an interest earning account I can get 6% or there abouts and gain nearly 2 grand for doing nothing but sitting on my derrier, safe as houses and easy tooo, what return can I get from daytrading when markets only move a miniscule amount each day and individual stocks motion forward at a snails pace, I simply cant see a return on my $30,000 that would entice me to even try it!!!, sorry

bottomdog

Welcome

Interesting angle, but disagree with the philosophy lessons.

Fools learn from their own experiences, wise people learn from the experiences of others.

Wise people learn from everybody.

keep the thread

Article43

bottomdog wrote: »

Welcome

Interesting angle, but disagree with the philosophy lessons.

Fools learn from their own experiences, wise people learn from the experiences of others.

Wise people learn from everybody.

keep the thread

Does that mean that everybody is a fool !

Article43

mox54 wrote: »

$30,000 is a tidy sum, tucked away in an interest earning account I can get 6% or there abouts and gain nearly 2 grand for doing nothing but sitting on my derrier, safe as houses and easy tooo, what return can I get from daytrading when markets only move a miniscule amount each day and individual stocks motion forward at a snails pace, I simply cant see a return on my $30,000 that would entice me to even try it!!!, sorry

You are corrcet mox54, and you should do with your money what suits you best.

But this thread is not about putting money in a savings account, and I am sure that there are plenty of threads out there that will cater for that.

This thread is about daytrading, and those that want to learn something about it. What people decide to do with their hard earned money is entirely up to themselves, but everyone should at least look at all the possibilites out there before making a decision, and their decision should be based on factual information, not on sales talk and hype !

With that, I will ask those that want too, to post what % they would risk on an syatem with an 80% win rate, that gives an average of 5 trades per week. A simple question !

And do not ever be afraid to post, for one will never learn anything of value if one does not ask questions. It is a pity so many of our so called "leading universities" do not entice studenst to ask more questions, instead of portraying themselves as an elite group of individuals, with whom, the studenst are privelaged to have as their teachers !

Article43

BTW, as I am not the best typist, or speller, and I do not have the time to read over and correct, or run a spellcheck, you will all have to put up with my mistakes from now on - sorry, but that is how it is, as I am not interested in improving my english, just my daytrading results !

portomar

mox54 wrote: »

$30,000 is a tidy sum, tucked away in an interest earning account I can get 6% or there abouts and gain nearly 2 grand for doing nothing but sitting on my derrier, safe as houses and easy tooo, what return can I get from daytrading when markets only move a miniscule amount each day and individual stocks motion forward at a snails pace, I simply cant see a return on my $30,000 that would entice me to even try it!!!, sorry

My opinion, article43, we should ignore all this scepticism, as you said, scepticism is good but absolute, refusing to believe fact scepticism can't be argued against effectively. Mox54, if you refuse to believe that in a market where prices change can't be made profitable by someone with a brain, years of experience and intelligence, then theres no point continuing to argue with article43. He started this forum to talk about daytrading, and IMO shouldn't be spending his time justifying the fact that money can be made.

My 2 cents:

Daytrading can be profitable, and i would agree with all the points article has said, with the exception that i have found some german stocks suitable to daytrading (e.on, deutsche postbank, deutsche boerse) but again, that depends on the outlay and cost of contract or trade, as i use spreadbetting accounts, my concern would be the spread rather than option cost. German spreads seem to have high spreads but im shopping around. My personal strategy which i am paper trading at the moment (i know paper trading is like gambling with no money, i.e., rubbish.) is to buy sell medium to high volatile stocks on the reversal of the 5 and 20 period moving averages, using, mostly, a basic half hour chart.

As for the monkey analogy, it proves most of article43's points, that investing is easy if all you seek are beta returns. seeking alpha is the aim of daytrading. For a quick outline of why article43 thinks the incumbents are muppets, go to rte.ie/business, read the breakfast notes from goodbody and see how many stocks the recommend selling compared to buying.

Article43

Yes portomar,

It is like comparing apples and oranges, mainstream to niche, and finally, would you rather pan for gold, or sell the shovels to the mile long crowd outside the store !

Any market can be daytraded, and the setups that will be required will be different, as not all markets operate in the same manner.

To daytrade Nasdaq stocks effectively, you need access to Time & Sales and Level II (called Level 2) screens. To daytrade NYSE stocks, you need access to the same screens, but as the NYSE is controlled by what is called a Specialist, as opposed to many Market Makers on the Nasdaq, the Level II screen needs to be looked at, and traded a little bit differently.

For the purpose og learning, I am only going to concentrate on the Nasdaq and NYSE markets, and we will alos look at the S&P 500 mini ES Futures, as the S&P cash, the 500 S&P stocks, is the one that all the big instutions watch mostly, the DOW is not the one to watch for market sentiment, although it has its advantages when you are daytrading the NYSE stocks, and we will cover this later.

But, we are all jumping the gun here, for we must first address the concrete foundation that is required to be inn place for daytrading, for without that, that walls will eventually give way, and it is only a matter of time begore the whole house falls in !

This is the hard and real fact about daytrading - ignore it at your own peril !

Can we plase get some answers in relation to the % risk per trade on the $30K account, with the 80% win rate strat that gives an average of 5 tardes per week, or 1 per day ???

Article43

When we have covered the Risk element of trading, the next important thing is the daytrading setup, as we have already identified the markets that we are going to look at.

To keep it interesting for you all, as I know that very few of you are concerned with risk control as of now, but it SHOULD be your top priority as I have mentioned, here is a typical daytrading layout that is one of the worst that I have ever seen !

http://www.boogster.com/stocks/tradingdesktop1.gif

Article43

Aha, I should have known, just look at the main site which is hosting the above daytrading screenshot !

http://www.boogster.com/main.asp

mox54

all the above points are well made, this is a thread for daytrading and I am sceptical but open minded enough to say I can also be persuaded otherwise, if the 80% is corretc and can be shown to be then why oh why oh why isn't the every man and his dog beating a path to your door! however with that said I would go with an inital percentage of 10%, there I have decided to spend $3,000 of fictional money to help you prove a point to me!!