How do you learn about day trading?

[akumaslair]

hello everyone.

Long time reader, very small poster....

when it comes to day trading, I am a newbie,

when it comes to shares, I am amateur to novice.

Hypothetical situation......

with a budget of say $100k or $300k or 500k or 1 mil

what sort of techniques are there in terms of making a small profit, say a few% per day everyday....

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

my 3 second though out suggestion, is eg for bluechips like TLS, the stock fluctuates 10-20c per day, on no particular news, so if you put all of your funds at $4.50 and sell at $4.6, thats 2.2% without brokerage......

is this a dumb method, or are there much smarter ways....

I am very curious, and any input would be appreciated

[Flying Fish]

I have 5000$ I just throw it on red or green lol Good luck all

[explod]

hello everyone.

Long time reader, very small poster....

when it comes to day trading, I am a newbie,

when it comes to shares, I am amateur to novice.

Hypothetical situation......

with a budget of say $100k or $300k or 500k or 1 mil

what sort of techniques are there in terms of making a small profit, say a few% per day everyday....

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

my 3 second though out suggestion, is eg for bluechips like TLS, the stock fluctuates 10-20c per day, on no particular news, so if you put all of your funds at $4.50 and sell at $4.6, thats 2.2% without brokerage......

is this a dumb method, or are there much smarter ways....

I am very curious, and any input would be appreciated

Good question and not dumb at all, it is the way of many day traders. There is an array of day trading books outlining such methods. You should identify what is right for you first then phantom trade till you work out a good little system. The other way is to buy software that will identify and set up trades for you. Biggest problem to overcome is when to sell, particularly getting out when it is going against you.

Time and again you will for example on a sell off from Wall Street see BHP or AMP drop a few dollars in the first half hour only to regain it later in the day.

[So_Cynical]

what sort of techniques are there in terms of making a small profit, say a few% per day everyday....

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

No u cant make a small profit everyday...not everyday is a good day.

Whatever techniques u use to trade your still gona have to make
decisions and sometimes u will get it wrong....stops will limit the loses.

[akumaslair]

thanks everyone.

so I got/get the idea that you can't win all the time.

how many different techniques for are there??

and what would be the safest day trading technique....

eg. I know you could put it on some mining share which is about to either announce the biggest find or about to go bankrupt in one day, ie the sp is either going to jump from 3c to 20c in one day or go from 3c to ZERO in one day.

my idea would be to put it in a bluechip or can you say follow the DOW and if that rises then to buy all ords as you would normally expect the all ords to follow DOW...

[Porper]

thanks everyone.

so I got/get the idea that you can't win all the time.

how many different techniques for are there??

and what would be the safest day trading technique....

eg. I know you could put it on some mining share which is about to either announce the biggest find or about to go bankrupt in one day, ie the sp is either going to jump from 3c to 20c in one day or go from 3c to ZERO in one day.

my idea would be to put it in a bluechip or can you say follow the DOW and if that rises then to buy all ords as you would normally expect the all ords to follow DOW...

I think you need to do at least 3 or 4 years study first amumaslair.

If you follow the Dow on open you will lose your funds, various studies have found this to be unprofitable as the XJO often opens high and closes lower after a positive finish on the Dow.

Walk before you try to run,maybe invest small at first on a fairly long time frame and get a feel for how the market works.

I've only dabbled in day trading and found it highly stressful.

[Timmy]

Your points about why you want to daytrade are good ones - turnover of capital, making $x per day. Knowing what it is you want is not that common (I want to trade to make money is not enough of a definition of goals IMHO), but is vital. Trading some instruments are better for your goals than trading other instruments. In the case of daytrading ASX stocks, if you want to do that, CFDs might be the best choice (DMA of course).

The first thing to do, before taking any trades, is to read as much as you can on this website about trading techniques, whether they be day-trading techniques or not. Read with the intent to study. Read posts from posters who have been posting a long time (rules me out) as generally longevity is a sign of success - its not a perfect correlation but is something.

There is a LOT of information here, some of it good, some not so. There are also many, many other boards with a similar distribution of information, find these boards (policy does not permit posting links), study the good posts.

When you're done reading, and this will not take a week or so, play around with ideas without risking money on them, this is more of the research stage. If you are going to day trade then you will need software, at this stage buy some and a live data feed and spend a few more months testing your ideas. By now you will have a good handle on some techniques which are more likely to bring you success and its time to start trading with small amounts, sort of the transition from testing to trading, the small amounts are for not just for protection of your capital while you are new to the game, but serve this function well.

I think following a route like this will give the best chance of success.

There are shorter routes - weekend course, packaged software, CDs, etc. but your likelihood of success is not as great - its not zero, but its close.

Stick at it, don't lose sight of what you want to achieve.

[nizar]

hello everyone.

Long time reader, very small poster....

when it comes to day trading, I am a newbie,

when it comes to shares, I am amateur to novice.

Hypothetical situation......

with a budget of say $100k or $300k or 500k or 1 mil

what sort of techniques are there in terms of making a small profit, say a few% per day everyday....

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

my 3 second though out suggestion, is eg for bluechips like TLS, the stock fluctuates 10-20c per day, on no particular news, so if you put all of your funds at $4.50 and sell at $4.6, thats 2.2% without brokerage......

is this a dumb method, or are there much smarter ways....

I am very curious, and any input would be appreciated

Hi Akumaslair,

Firstly, if you don't mind me asking, why do you want to daytrade?

You can make good money by trading longer term such as end of day (which means you have to take action once a day) or weekly (which means you have to take action once a week).

With these longer term methods, there is:
*Less brokerage fees
*Less screen time
*Less stress
*Possibility of dividends.

And Im not sure about your situation, but another plus for me is that I can work outside earning a full time wage, yet trade at the same time.

With daytrading, there is so much emotion involved, and especially for those with no method (sorry but buy at $4.50 and sell at $4.60 is not a method, and i will explain why shortly), you will be trading based on fear and greed, and in the heat of battle, these decisions will often be irrational.

To do any sort of trading, be it longer term, or daytrading, you need to have a trading plan/system. I don't trade a system unless it has been exhaustively and strigently backtested and proven to have worked in the past, with a high likelihood of being profitable in the future.

In this plan/system you need to know:

*What to buy.
*When to buy.
*How many to buy (money management)
*When to sell and take a loss ( risk management)
And yes, it is better to lock them in rather then waiting for a recovery
*When to take profits.

Let's take your TLS example. It's by no means dumb, it just shows you are not yet ready to trade profitably.

Say you buy at $4.50, firstly, how many do you buy?
Secondly, what would you do if it drops immediately?
How do you know how much room to give it to recover before deciding its a dog and running for the hills?

All these questions need to be known and quantified before you can begin.

So be prepared to spend the TIME and MONEY required for education in understanding concepts such as expectancy, and building a trading system to give you confidence.

I can go on for hours/pages talking about this, but perhaps at this stage its better if you ask specific questions. There's alot of very smart people on this board that are more than willing to help.

There is also a lot of information and resources on my blog and you may find useful, and a list of recommended reading.

All the best with your trading,

Nizar.

[tech/a]

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

Seek and you shall find.

This is how you do it.
Took me 3 yrs to find it and I should charge you $10,000 for the secret.

First though some background.

Timmy is partially on the right track.You must have good technical knowledge and I suggest learning how to read the tape.I strongly suggest VSA (Volume spread analysis) coupled with any other form of analysis you become expert in.I'm not going to give you the application of that analysis but will say there are educators out there that will (Radge is one,Gavin From Tradeguider another).

You will need to alter your time frame to 15 min 60 and 120 min time frames(Or similar) so you'll need Real time charting. Once you understand "The secret" it wont be stressful at all.

You need to understand timing and entry ARE all important in this type of trading.This is where strong analysis---expert analysis is important.

You MUST wait for the trade to develop and come to you.

And now for the SECRET.
You must alter your thinking to Reward to Risk.
ONCE YOUR IN A TRADE
Thats what you trade---REWARD to RISK nothing more.
Once in a trade thats all you do.

Below is a chart with a setup I'm trading I wont go into detail on how I found it but will show you MY application of Reward to Risk.
Take care of R/R and you'll never worry about profit regardless of Capital you use.
Just private mail me for address for cheques and money orders.
Oh and when you do get good at this you can expect win rates well above 60%

[Trembling Hand]

I would suggest a mix of learning by reading and practicing by live trading with very small amounts of money at the same time. You could spend a lifetime reading about trading and never get a sense about how this game plays out.

There is nothing more clearer than looking at a static chart days/weeks after it traded to see all the profitable opportunities. Then there is not much harder an activity than taking out small consistence profits from a fast and ruthless volatile market.

If you never hit the Buy button while you are learning you will never get any feedback. It’s like learning how to drive a car without any practice or how to paint without ever picking up the brush. You would simply never get anywhere. The best education is by doing.

During your L plate trades you will be able to feel out what you like and what you don't and this will lead you in a direction of where you should be concentrating your efforts. This game has endless ways to approach it and one of the biggest hurdles will be finding a 'system' that suits your personality and unfortunately most will tell you that there way has advantages over other approaches. In reality what makes sense for one trader will just create friction and distress for another.

There is a few things that no matter what your approach is are vital for success. Money management, perseverance, a love of markets(this doesn’t mean money), a big bank roll, good record keeping and refection on your records.

Just forget about making money you are training not trading. Use 1 share CFDs trades just to see how hard and important good entries and exits are to day trading.

After 100 trades you will have a better education than 10 books. If you can add 100 trades, 10 books, and a good review of your results you will have saved a lot of wasted time learning stuff that may not suit you.

[akumaslair]

Hello everyone,

thanks for your advice... i take all advice seriously... even the ones I think are silly, I will not dismiss it right away..

I will try and answer a few questions that have been posted...

I guess in the past I have always been interested in shares, I traded a lot in the 90s, didn't do too well, took a few years off, tried a few different things. a few winners and losers, but this year for me has been above average. I also was investing $3k back in the 90s, now I have a bit more to play with. I also thought to myself, the big boys, as in the wealthy people, they surely must have a smarter way to put their millions in their shares... and I am not reffering to the company directors and share experts, I am referring to the wealthy people who obviously don't control companies......(hope I make sense). also, I currently run my own business which is tought but requires me to be in front of a pc all day anyway, (flexibile business), also I have spare time compared to a few years ago.

I find share trading to be exciting, I enjoy the excitement, I however do not enjoy the excitement of putting a lot of $$$ on roulette...

I feel that now I am prepared to invest more $$$, I need to and want to research more, and I want to have a more active participation instead of buying something and let it sit for the long term. This I have/am already done/doing so thats no problems at all...

I subscribed to a share subscription service about 12 months ago (Ill leave out the name as it hasn't got much positive feedback), however it wasn't that much money, I followed a few of their tips and basically, out of the 15 recommendations they made, 13 ended up in the RED, however, I actually did not sell when they recommended for the last few stocks, and all have gained 10-50% in 12 months, so which I am thankful for... this share subscription service had a personal education section, which I read all of it, and it taught me to set limits for losses, putting only 10% of your $$$ into a stock, taking the emotion out, and l;earning to sell at a loss if it happens, so it has been worth it... I feel that I want to be a bit more active then buying every 3-6 months........, I don't feel the need to trade 4 times a day, but 1-5 times per week would be a bit more involvement

I hope I haven't waffled on too much..

[tech/a]

How do you learn about day trading?

Thanks for your information about where your "AT".

From this I will be frank in answering the above question in quotes.

You are no where near ready to trade shorter term.
Learn first how to turn consistent profit longer term.

[akumaslair]

that is fair enough....... what sort of experience do you consider for someone to be ready>???

[greggy]

that is fair enough....... what sort of experience do you consider for someone to be ready>???

Having traded for the last 28 years, I reckon that its best to start with a fictional portfolio for a year or so to begin with. Research all the companies in your fictional portfolio and read as much as you can about financial matters. It may even be a good idea to subscribe to a financial newspaper such as the AFR. Also, if you know of traders whom you trust, speak to them about their experiences. You might realise that the volatility involved is too much for you to handle.
If you do decide to day trade, start off with small amounts. Know all those companies you intend investing in back to front before investing in them. I made my worst mistakes during my early days. Risk does work both ways.
Good luck.

[tech/a]

that is fair enough....... what sort of experience do you consider for someone to be ready

Experience.---
You appear to have a good start in that you are business orientated.

That which I have offered above does say it all,but I will expand a little.

You've asked specifically about "Day Trading" I note that your thinking more short term than strictly day trading.
No problem the same applies.

Lets say you sell items for a living as an example.
You can sell very large items which when sold return a huge profit but take a great deal of time to sell.
OR
You could sell lots of smaller items with less profit in each but due to volume gain a huge return.

So learning how (Not necessarily the what) makes the profit and knowing its application is a must.

I'll digress to something BRILLIANT I saw the other day.
Reverse Auctions.

I cant remember the exact figures but.

I guy had a classy home to sell on the sea front. He could ask $1.2mill for it and make a conventional gain upon the sale.
He chose to reverse action it.
Bidders were charged $10/bid and the LOWEST single bidder got the house.So if you were one of 2 that bid $1 you weren't the lowest single bidder.

He got over 250,000 bids (not the exact figures) so his return was massive.

Here in lies the secret to his over the top success.
Short term trading is very similar,with an eye on your return to risk,sensible leverage and compounding---need I say more?

Bring out the entrepreneur in you!

[akumaslair]

yes I agree... buying a share at 2c and for it to hit $50 in a few years would be fanatstic but almost like one in a million.....

that reverse auction concept is quite interesting,..

I guess the only problem you would have to worry about is at $10 per bid and only 100,000 bid on it.... then that would be a very painful day....

[Trembling Hand]

I currently run my own business which is taught but requires me to be in front of a pc all day anyway, (flexible business), also I have spare time compared to a few years ago.

I find share trading to be exciting, I enjoy the excitement, I however do not enjoy the excitement of putting a lot of $$$ on roulette...

Have not seen anyone in their own business devote time on a separate business/project that wouldn't of been better spent making the first biz more profitable.

[tech/a]

TH

I'll have a beer with you one day.

My core business is civil works.
Property developement began as an aside.
The civil business keeps me in a manner I'm not accustomed.
The property developement secured me for life and still do it.
Trading--thats a side line.

[Trembling Hand]

I'll have a beer with you one day..

Have never turned down a chance for a beer. Will drop you a line next time I'm in S.A.

My core business is civil works.
Property development began as an aside.
The civil business keeps me in a manner I'm not accustomed.
The property development secured me for life and still do it.
Trading--that's a side line.

Just a guess, how many hours in front of the trading screen looking at the market including premarket prep and post market prep etc. would be needed to to become profitable as a short term trader/daytrader?

I do minimum 10 hours a day. And run and grow a biz? I think you would end up being an avg punter in both trading and running you biz trying to do both.

[tech/a]

Whats profitable?

In terms of $s,its more the years of finding the above (The secret) that if I placed an Hrly rate on and the software,feeds,and other times as you suggest
which certainly make your statement a truism.

But in the end if your in the position to trade sizable amounts $200K plus then you could well say that the end was indeed worth the effort.

This is a topic in itself one which Id be happy to discuss on the boards or over a beer.