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martin959 16.04.2020 22:56

Day Trading - Advice's for a beginner?
 
Hello fellow Traders!

I'm starting with day Trading as a side hustle - a mix between bored, having time, coronavirus quarantine, a fail-safe additional income - for those of you that are day traders, what tips, suggestions, advice's would you give for those who are starting on it? :)




Thanks in advance! :D

Troublawesome 16.04.2020 22:59

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by martin959 (Post 3172374)
Hello fellow Traders!

I'm starting with day Trading as a side hustle - a mix between bored, having time, coronavirus quarantine, a fail-safe additional income - for those of you that are day traders, what tips, suggestions, advice's would you give for those who are starting on it? :)




Thanks in advance! :D

Stay away from index trading, FX trading, crypto-currencies and do not use leverage.

Jim2007 16.04.2020 23:48

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by martin959 (Post 3172374)
Hello fellow Traders!

I'm starting with day Trading as a side hustle - a mix between bored, having time, coronavirus quarantine, a fail-safe additional income - for those of you that are day traders, what tips, suggestions, advice's would you give for those who are starting on it? :)

Thanks in advance! :D

Perhaps you have a career in comedy...

If you want to be successful in trading over the long term, write a book, develop a training course, develop an analysis tool, an investor newsletter or sell data => the proven methods of being successful at trading.

eyebeebe 17.04.2020 07:22

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by martin959 (Post 3172374)
Hello fellow Traders!

I'm starting with day Trading as a side hustle - a mix between bored, having time, coronavirus quarantine, a fail-safe additional income - for those of you that are day traders, what tips, suggestions, advice's would you give for those who are starting on it? :)




Thanks in advance! :D

Trade with other peoples money. Something like 80% of non-professional traders lose money.

Chuff 17.04.2020 07:39

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by martin959 (Post 3172374)
Hello fellow Traders!

I'm starting with day Trading as a side hustle - a mix between bored, having time, coronavirus quarantine, a fail-safe additional income - for those of you that are day traders, what tips, suggestions, advice's would you give for those who are starting on it? :)

Thanks in advance! :D

I am no financial genius, but in your particular case, considering your constant stream of inane questions and apparent naivety, I really don't advise that you do anything involving your own money that you do not fully understand. Maybe it would be wise to stop asking people what to do all the time instead go and actually read and research what it is that you want to do and then come back armed with more knowledge and more sensible questions that have some direction and depth to them.

wantone 17.04.2020 07:45

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Troublawesome (Post 3172377)
Stay away from index trading, FX trading, crypto-currencies and do not use leverage.

I second the do not use leverage and crypto out.

Index trading using futures and FX trading is absolutely fine and very safe if there is no leverage.

wantone 17.04.2020 07:48

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Chuff (Post 3172424)
I am no financial genius, but in your particular case, considering your constant stream of inane questions and apparent naivety, I really don't advise that you do anything involving your own money that you do not fully understand. Maybe it would be wise to stop asking people what to do all the time instead go and actually read and research what it is that you want to do and then come back armed with more knowledge and more sensible questions.

Why? Let him try. Day trading is difficult but if you are disciplined you can make it work. The reason most people are losing money is because the use leverage and most of the times need to close positions under distress situations (some times the broker will force close positions).

If he is smart enough not to use leverage it is way more profitable especially if you apply some risk management techniques to it.

martin959 17.04.2020 07:57

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Chuff (Post 3172424)
I am no financial genius, but in your particular case, considering your constant stream of inane questions and apparent naivety, I really don't advise that you do anything involving your own money that you do not fully understand. Maybe it would be wise to stop asking people what to do all the time instead go and actually read and research what it is that you want to do and then come back armed with more knowledge and more sensible questions that have some direction and depth to them.

To be honest, I am reading, looking in Investopedia and so on...

So far to my experience, i had days that i was able to make 300 usd, 200, 200, -130, -200, etc... it has its good and bad days, but it also goes on the timing when you spot the peaks and bottom of the valleys, and thats the hardest part to my experience so far.

Long term vs day trading - had it for 2 years 10k invested just to make 1k and see it how it flied away with the corona and the plumb of the stock market... doing day trading at least i made 400 usd overall in less than a month

Thats my experience so far.

Axa 17.04.2020 10:16

Re: Day Trading - Advice's for a beginner?
 
Don't invest what you cannot afford to lose.

The goal is making money, not being right.

A credit card is not a source of funds. It's debt and you don't want to get into personal debt to invest.

Stay away from Fintech. One of these days any of this startups that spend a lot on marketing may go belly up.

Jim2007 17.04.2020 11:56

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by wantone (Post 3172427)
Why? Let him try. Day trading is difficult but if you are disciplined you can make it work. The reason most people are losing money is because the use leverage and most of the times need to close positions under distress situations (some times the broker will force close positions).

If he is smart enough not to use leverage it is way more profitable especially if you apply some risk management techniques to it.

In thirty years working in the industry I have never met a day trader that was successful over the long term. And this should not be surprising at all, because a day trader is trying to do something terribly dumb - predict human behaviour in economic conditions over the short term, using tools that take account of neither. It is just gambling dressed up to sound sophisticated, nothing more.

A day at the races or an even at the dogs would probably be more enjoyable and probably as successful - at least the only factor you are trying to predict is how fast the horse or the dog can run.

Jim2007 17.04.2020 12:00

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Axa (Post 3172463)
Don't invest what you cannot afford to lose.

I have always find that to be a rather silly statement..

If you want to be successful at investing, then you can't afford to loose money, after all the whole point of investing was to grow your wealth.... so why in heavens name would you risk your money on activities that are known to be losers????

wantone 17.04.2020 12:01

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Jim2007 (Post 3172493)
In thirty years working in the industry I have never met a day trader that was successful over the long term. And this should not be surprising at all, because a day trader is trying to do something terribly dumb - predict human behaviour in economic conditions over the short term, using tools that take account of neither. It is just gambling dressed up to sound sophisticated, nothing more.

A day at the races or an even at the dogs would probably be more enjoyable and probably as successful - at least the only factor you are trying to predict is how fast the horse or the dog can run.

I agree but if he tries it it will help him to learn more about investing. It is a good experience.

Btw all professional traders at big investment banks do daytrade their books for additional P&L for the bank since they are all day in the trading room.

Don Molina 17.04.2020 12:38

Re: Day Trading - Advice's for a beginner?
 
Unless you have stupid low commissions, day trading makes little sense economically.

Anyway, typical day trading means you are making a lot of decisions every day. Your room for error is large. If you want to "trade", build a fully-fledged idea, test it rigorously, and then implement the trade. That idea could very well be many trades per day, but if they're based on a central premise, then it's actually one decision that drives the process. You then need to refine the decision.

Even if you're not wrong with an idea (stock XYZ will overperform the market over the next 2 months), you could still be caught out be implicit exposure that you're not expecting. You buy something, and you think its performance is related to factors a, b, c, d, but you could be missing e to z. Even professional investors get caught out like that, and one of the main reasons making investing quite an exercise.

martin959 17.04.2020 12:40

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Jim2007 (Post 3172493)
In thirty years working in the industry I have never met a day trader that was successful over the long term. And this should not be surprising at all, because a day trader is trying to do something terribly dumb - predict human behaviour in economic conditions over the short term, using tools that take account of neither. It is just gambling dressed up to sound sophisticated, nothing more.

A day at the races or an even at the dogs would probably be more enjoyable and probably as successful - at least the only factor you are trying to predict is how fast the horse or the dog can run.

What about a mix? the best of both worlds... Long term but with a Trail for stop loss, that whenever is exceeded, you will just wait for the stock to go as low as it was meant to go, for then buy it again, or simply buy another one...

LuganoPirate 17.04.2020 12:51

Re: Day Trading - Advice's for a beginner?
 
First piece of advice - DON'T!

Second piece of advice - following on from my experience.
In addition to my long term portfolio, and for income, I used to day trade. I'd often put on and close a 50 trades or more in a day, though the average was around 15 -20. They weren't all closed out the same day, some would run for a week, a month or more before being closed.

I had live feeds and used Reuters for prices. Level 2 order book was (and still is) a very important source of information. I would spend an average of 3-4 hours a day researching and looking at how the markets were moving, setting up stops, hedges etc.

On average over 3 years I made a 22% return on capital invested. Then on a New Year I was away in Africa with no internet connection for a month. When I returned I embarked on a more structured way of trading, mainly buying shares on a CFD and selling put and call options around them 3 months out. I also started trading the indexes, FTSE, DAX and SMI buy selling far out, out the money options which I would also hedge. Crucially, I spend far less time in front of the computer and unless it's a fast moving market don't even check other than a quick look, 5 minutes at most, at my positions.

My return for that year was 19% (I exclude what was made on my long term portfolios). I now mainly trade index options (for the past 8 years) and occasionally sell puts with a view to having the stock put on me. My average return has been around 20% with a high of 28% and a low of 15%. No single year produced a loss, though there were plenty of individual losses.

The best advice I could give after DON'T is:
Use leverage but only use half your funds, so margin calls can be comfortably made
Do not borrow money from credit cards to invest, but only use savings
Do not be afraid to take losses.
Be strict with limits. The first loss on a position will be your lowest loss.
Equally do not be afraid to take gains, especially with options which have a finite life.
Make sure you have live prices. Reuters is very good, and much cheaper than Bloomberg, but are still expensive. ADVFN is very good and also give access to Level 2.

wantone 17.04.2020 13:36

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Don Molina (Post 3172507)
Unless you have stupid low commissions, day trading makes little sense economically.

Anyway, typical day trading means you are making a lot of decisions every day. Your room for error is large. If you want to "trade", build a fully-fledged idea, test it rigorously, and then implement the trade. That idea could very well be many trades per day, but if they're based on a central premise, then it's actually one decision that drives the process. You then need to refine the decision.

Even if you're not wrong with an idea (stock XYZ will overperform the market over the next 2 months), you could still be caught out be implicit exposure that you're not expecting. You buy something, and you think its performance is related to factors a, b, c, d, but you could be missing e to z. Even professional investors get caught out like that, and one of the main reasons making investing quite an exercise.

Open an Interactive Brokers account. Commissions are pretty much next to nothing.

wantone 17.04.2020 13:42

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by LuganoPirate (Post 3172510)
First piece of advice - DON'T!

Second piece of advice - following on from my experience.
In addition to my long term portfolio, and for income, I used to day trade. I'd often put on and close a 50 trades or more in a day, though the average was around 15 -20. They weren't all closed out the same day, some would run for a week, a month or more before being closed.

I had live feeds and used Reuters for prices. Level 2 order book was (and still is) a very important source of information. I would spend an average of 3-4 hours a day researching and looking at how the markets were moving, setting up stops, hedges etc.

On average over 3 years I made a 22% return on capital invested. Then on a New Year I was away in Africa with no internet connection for a month. When I returned I embarked on a more structured way of trading, mainly buying shares on a CFD and selling put and call options around them 3 months out. I also started trading the indexes, FTSE, DAX and SMI buy selling far out, out the money options which I would also hedge. Crucially, I spend far less time in front of the computer and unless it's a fast moving market don't even check other than a quick look, 5 minutes at most, at my positions.

My return for that year was 19% (I exclude what was made on my long term portfolios). I now mainly trade index options (for the past 8 years) and occasionally sell puts with a view to having the stock put on me. My average return has been around 20% with a high of 28% and a low of 15%. No single year produced a loss, though there were plenty of individual losses.

The best advice I could give after DON'T is:
Use leverage but only use half your funds, so margin calls can be comfortably made
Do not borrow money from credit cards to invest, but only use savings
Do not be afraid to take losses.
Be strict with limits. The first loss on a position will be your lowest loss.
Equally do not be afraid to take gains, especially with options which have a finite life.
Make sure you have live prices. Reuters is very good, and much cheaper than Bloomberg, but are still expensive. ADVFN is very good and also give access to Level 2.

How much did you pay for Reuters?

Tbh what you did is a bit complicated for the average daytrader plus selling options always has a very high risk to get wiped out.

You still could make that much or even more but going long a stock portfolio for 10 years and doing far less work. Not that it is important because it is past performance but it is simpler and still you can get good results with min time invested.

HIAO 17.04.2020 14:15

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Troublawesome (Post 3172377)
Stay away from ...crypto-currencies...

Not quite day trading, I know. In 2017, I bought a little ethereum, litecoin, IOTA etc.

In the following 2 months, the value increased by 675%.

Then, in the following 2 months, the value fell by 95%.

2 years on, It's value is around what I first paid.

LuganoPirate 17.04.2020 15:08

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by wantone (Post 3172526)
How much did you pay for Reuters?

Tbh what you did is a bit complicated for the average daytrader plus selling options always has a very high risk to get wiped out.

You still could make that much or even more but going long a stock portfolio for 10 years and doing far less work. Not that it is important because it is past performance but it is simpler and still you can get good results with min time invested.

I still have Reuters and pay CHF1450 a year for the basic system, which more or less gives me delayed feeds on all the world's major, and most minor exchanges. This is based on Europe, M.E. and Africa. To add the USA in order to get live feeds would cost another $850 i think.

The you have to add exchanges, L2 etc. Most expensive is the FTSE Futures around GBP 110 a month and in total I spend about CHF 229 a month on exchange fees, SMI, DAX and FTSE, equities, options and futures.

For the US, which I rarely trade, I use E-Trade, as they give live prices etc for free.

You're partly right, it seems complicated but I started with no experience, read a lot, spoke with my broker and trialed and error'ed with small amounts. Been doing it for over 25 years so built up a lot of experience. But even with that experience I still make mistakes and often do not practice what I preach which sometimes can be costly!!

As for a long stock portfolio, I cannot argue with you. I have one and with a few exceptions I've held on to most of my shares for over 20 years and they have given me excellent returns.

I enjoy the option trading and I do it to bring me in some extra income.

Harrie Nak 17.04.2020 16:07

Re: Day Trading - Advice's for a beginner?
 
Quote:

Originally Posted by Troublawesome (Post 3172377)
Stay away from index trading, FX trading, crypto-currencies and do not use leverage.

A margin account is so much more convenient to trade with than a cash account. How can you even properly trade when you constantly have to wait 3 days for cash to settle?


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