Daytrading

[PHANTASM]

More generic question would be how you can start with 100$.

 

You are having around 1000$ in your hand if I am not wrong. How can you start with 100$ and gain profit?

 

The problem you will have with only $100 is that your fixed costs will eat up any profit you make. There are a lot of online brokers. I use Scottrade, they cost $7 per transaction. So, if I move $500 into a stock the fixed cost is a small amount, but $50 would not be worth it. I would lose $14 buying and selling it, which is 28% of $50.

 

Some traders are cheaper. Sogotrade only costs $3 a trade. I've been thinkng about switching companies because I'm tired of the fees myself. If anyone knows of a cheap broker that doesn't suck let me know.

 

You can also get a margin acount, where they match you a loan on the amount of money you have in your account at 8% interest.

 

You may consider setting up a practice account on an Excel sheet and give yourself $10,000 to start with.

[PHANTASM]

Not sure if anyone is interested but the big financials all took a dive today because the Congressional Budget Office announced today that the US budget deficit for this fiscal year has hit $1.4 trillion. Somehow, this surprised Wall Street. Gold went over $1000 a share. People always get scared and start buying gold and commodities, while guys like me buy whatever they just sold. The big fins aren't going anywhere.

 

FNM (Fannie Mae) went from $1.86 down to $1.63. FRE (Freddie Mac) went from $2.07 to $1.86. I'm going to set a Limit Order to buy FNM at $1.55 and FRE at $1.80. Limit Orders allow you to define what price you are willing to pay for a stock in advance (neat huh). I'm expecting a slight dip at the market open, so I should be able to get these prices on one or both of these stocks.

 

I'm going to then set fairly flexible Trailing Stops, like 8%, to give them a little room to breathe the next few days. Then, when it stabilizes I will readjust my trails to 3% so I can cash in when they go back up. At least that's the plan.

 

Both of these mortgage brokers got massive bailouts last fall so they are very safe stocks. The US government will not let them go bankrupt. On Sept 4th both FNM and FRE received formal notice from the SEC that they are no longer in danger of delistment. Combine this with the right volatility and price range and you have attractive stocks, at least to me.

[Devildog]

thanks for the awesome insight!! ur very knowlegable....we should talk sometime.

[PHANTASM]

Here's what happened today from the trades I described in detail on this thread last night. You can see that Freddie dropped down to $1.79, and my Limit Order bought it at $1.80. Three hours later it was at $1.97, for a return of over nine percent.

 

Fannie didn't go low enough to trigger the buy. Freddie was "FRE" money today.

 

[PHANTASM]

So far, we've covered how to pick stocks using the news, and how to protect yourself from falling stocks using Stop Orders. We've covered how to set up Trailing Stop Orders that automatically sell your stock for you. Now let's talk about pending transactions that do the opposite - automatic buying of stocks when certain conditions are met. These are called "Conditional Limit Orders".

 

Conditional orders are executed only if certain market conditions are met, such as the purchase or sale of stock when its benchmark index reaches a certain level. You might give conditional stop or limit orders on a stock or on both a stock and an index. They can also be designed to kick in when a stock suddenly starts to move upward. This is how "Momentum Investing" works. It doesn't matter which stock goes up, as long as is the order to buy it is already set up. This further removes "luck" from the process.

 

A one-cancels-other (OCO) order stipulates that if one part of your order is executed, the other part is canceled. For example, if you place an order to buy one stock at a specific price and buy another one at a different price, the one that's filled first cancels the other one. You might also use an OCO order to purchase a stock at one price and then either protect your profit with a Limit Order at a higher price or limit your losses with a Stop Order at a lower price.

 

In this example, selling at one price voids the order to sell at the other. This way, we don't have to wait for the stock to drop 3% before it is automatically sold for us. It can be sold at the height of the curve, right at the inflection point. This lets you make even more money.

 

With a one-cancels-all order, you place several limit orders, but want only one of them executed. If one of the orders is triggered, all the others are automatically cancelled. Let's say you have three stocks you're watching in a sector, say the auto sector, because you know Obama is about to say something tomorrow and the prices might go up. You would identify these stocks and their limit prices at which you think they are starting to move north. When you buy the one that reaches your designated price first, the other orders are cancelled. That way you don't waste time buying stocks that are not going up.

 

In contrast to cancel orders, one-triggers-other (OTO) and one-triggers-all orders are made up of multiple pending transactions that trigger each other. The execution of the first order triggers the execution of the following orders. For example, you might give an OTO order to buy stock at one price and sell as soon as it reaches a higher price. If your buy order is executed, the sell order becomes active.

 

Using these order types, we can choose large numbers of stocks that might go up, and set pending transactions to buy whichever one starts to move up. The other stocks are then ignored. Once it is bought, the Trailing Stop is activated, or the limit order to sell at the top of the curve (if we can guesstimate it), locking in our profit when it starts to inflect. The quicker we can sell after the inflection point, the more money we get to keep.

 

If you are setting a Stop Order using automated momentum investing, you want to keep it a little tighter than you would if you were buying in advance of the alpha movement. Instead of 3%, try 1%. Since you are only buying the stock that is in the process of going up, there is no reason to set a higher value here (like 3%) in case it drops, because we are assuming it is already in the process of going up. You want to dump it as soon as it starts to go down and not lose any unnecessary percentage.

 

I often use Limit Orders that buy pre-vetted stocks when they have dropped down to a certain value, instead of when they are rising past a certain value. This is called "Value Investing", only I do it over a period of hours or days instead of months or years. I look for good stocks that have taken a dive and are good prospects for a next-day rebound.

[vke]

Hmmm my only experience with them was a class project, and it went pretty smooth except around opening and closing. It wasn't as aesthetically pleasing as scottrade or e-trade, and i was a little difficult to navigate the site at first. Worked great for us, we had $100 starting, and we turned it into $350 in a few months, but that was holding the stocks so they could go up. One problem we had was some of the stocks we were interested in didn't show up on their lists, hopefully they have fixed it.

 

Only thing i have to add is that research=money. The more news you read, and the more "in the loop" you are, the better chance you have of making intuitive investments. And definitely set stop orders. Im currently taking a few classes so hopefully i will have more to offer in a week or two. I wouldn't advise buying on margin unless you are sure you can make atleast 50% profit.

[PHANTASM]

It looks like there will be two reports this week that could raise some stocks. On Tuesday, the Commerce Dept is expected to say that the auto sector had a nice month last month. This could give a brief rise to some auto stocks. Thursday we have a positive housing report from the Commerce Dept that should boost housing stocks for a few hours. Friday the unemployment numbers are coming out, so there will probably be a drop as usual. Good time to buy.

[vke]

Looking into Interactive, it seems they have changed quite a bit. They now require a MINIMUM of 10k before you can invest, and to "Day Trade" you need an account value of 25000

 

list of Prerequisites from their site

Good or extensive product knowledge for any product you wish to trade.

Prior execution of 100 or more trades (any product).

A minimum equity deposit in cash or stock of USD 10,000 (or USD equivalent) or USD 4,000 for IRA Accounts.

US regulators require a minimum account value of USD 25,000 (or USD equivalent) at all times in order to day trade US stocks, US options and US Single Stock Futures.

[PHANTASM]

Sorry to hear that Valkyrie. Thanks for the info.

 

Citibank went up today, as expected from the housing report (see above). I bought C at $4.19 on Tuesday, and sold today at $4.51, for a 7.6% profit for two days. Every little bit helps.

 

I'm pretty sure I wrote about buying Citibank on Tuesday, but it looks like my comment was lost in the forum migration, along with about half of this tutorial lol.

 

Tomorrow we have the unemployment report, and they are trying to skew the numbers to make it look positive, but I expect a drop. Which means you might want to sell out today and buy up the losers at the end of the day tomorrow.

[PHANTASM]

The official unemployment numbers were released this morning by the US Labor Dept, just like I had told you five days ago (see my post from Sunday). They were being strategically pre-released yesterday (Thursday), to soften the blow I guess, so yesterday's late afternoon drop should have been today. I got out just in time yesterday afternoon and I have everything in cash. I've got Limit Orders set to buy multiple stocks that are in free fall today, and whoever falls farthest the fastest will be purchased to be sold for a profit next week.

 

I'm looking hard today at FNM (Fannie Mae), which got hit by a federal report this morning that the government is running out of money to give them, which is untrue. The US govt has all the money in the world, and it doesn't matter how much they print. Consider that over $60 trillion disappeared from the global financial system last year in the crash, so there is actually less US dollars in circulation on earth today than there has been for the last few years. Congress will just raise the debt ceiling again, so they can blast out more money to prop up the lenders. They always do. No one is going to risk their campaign contributions by letting these lenders fail.

 

Corporate control of our news media is the prime determinant of the stock market. Everything you are told is to influence the holdings of the companies that own the media outlets. So, major corporations withhold or release information in accordance with the stock holdings their owners have. It's just propaganda.

[PHANTASM]

More free money:

 

Buy on Monday, sell when the next propaganda report comes out.

 

Cheers.

 

[PHANTASM]

This week in trading:

 

There are many earnings reports for the last quarter coming out this week, most of them are bad, but no worse than the previous quarter. If you are buying any particular stock check if there is an earnings report coming out. Remember that a good report will briefly raise prices and a bad report will briefly lower prices, and plan accordingly.

 

There will be Federal Reserve Meeting Wednesday afternoon to decide whether to raise or lower the federal interest rate, This is important. I'm thinking they will not do anything, and the Big Financials will get a slight boost on Wednesday from this news.

 

The National Assoc of Realtors are issuing their quarterly report on Thursday, and it should be good, so home construction stocks and the big fins should also get a slight boost on Thursday.

 

We will probably break DOW 10,000 this week. This will be huge news, and will cause millions of people to enter the market who have been hiding their money in a mattress since 2008. I expect big gains from the news.

 

The New-Home Sales Report from the Commerce Dept will be issued on Friday. This will be lost in the noise from DOW 10,000. I don't expect a huge drop this Friday (I usually sell everything before Friday afternoon).

We'll see how the DOW reacts to itself.

 

I have a Limit Order set to buy Citibank at 4.25 a share. It is currently at 4.26. The market opens in 20 minutes. Gentlemen I will see you on the beach.

[PHANTASM]

Well, Citigroup did great, as expected. Up ten percent in two days of trading, just like I expected. Hope you got in Monday bright and early when it was still at $4.25. Now it's at $4.65. You can't see it but there was a sharp drop on about 3 cents at 8:30 AM Monday that doesn't show up well on this graph.

 

[w0nder]

 

 

I cant believe I made it through all this @ 5:36 am

 

 

Very informative. I want to get into this, just need to do a bit more research.

[PHANTASM]

Thanks w0nder! Glad to help. Let everyone know what you decide to do.

 

I want everyone to see what happens when the news doesn't go the way we expected. Today's housing report showed that August's sales were about 1% (or some ridiculous amount) lower than July's numbers. So instead of a jump, we had a mild drop across the market. The shorters (the bad guys in the stock market) brought out a cascade of negative news, and the market started to dip, which is what shorters want. They make money when ordinary people lose money. Even msn.com rolled out a story about how citibank was going to "scale back", which is old news anyway, but they could have put out the same story as a "consolidation" or "citibank becomes more competitive", and people would have bought the stock instead of selling it.

 

My Stop Order kicked in at $4.61, so I saved my money (I had it set to a 1% trailing stop). I can't buy anything since Scottrade froze my account Tuesday do to excessive trading. For every trade I made they made $7, so I don't know why they would try to stop me, I think it is an SEC regulation. It's completely ridiculous to make someone stop trading. At least they don't take you into a backroom and torture you like in the movie "Casino". I need a new broker.. Anyone want to help me set up my own online brokerage website? We could probably make millions.

 

This is how Citigroup looked the last few days: