General Question

Ltryptophan's avatar

How do I get into day trading?

Asked by Ltryptophan (11401points) February 27th, 2010

I want to learn how to day trade, and use the stock market to make money in my spare time, any suggestions on what books to read, or which services are best?

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10 Answers

DarkScribe's avatar

(Set your alarm for dawn.)

There are all manner of courses, both tertiary and on-line. Google around and take your pick.

LuckyGuy's avatar

OK, Here’s the deal. Write this down ‘cauue I’m only telling you this once.
First, all the disclaimers. I am not your financial adviser; your mileage may vary; past performance does not guarantee future performance; and may cause birth defects, yo might lose your entire investment. Got it.?

If you expect to make money day trading you need to either trade very volatile stocks or trade derivatives. Very risky. You will be swimming with guys that have more experience than you and most likely will eat you for lunch.
You should have an account where you can trade at low cost. $7–9. That is usually a 50,000 minimum.
A very common type of derivative is options: Puts and Calls. Look them up. You cannot lose more than you invest but can make a lot. With Commodities, short sales, margin buys, you can make a lot but can lose more than your invest. Very dangerous. With options, you vary the risk by choosing the expiration date and whether or not the option is in the money.
For example if I am going to play for a full day and can spend the day in front of the screen I will rtry some crazy option near the expiration and maybe do a straddle. If you figure on looking at it every day then you can go for a longer window.
You have to be willing too lose the full shot to make a big gain. Can you do that? I can, so I was permitted to open this type of account.
You should look up some of the terms I mentioned above. E Trade has a great course in it. If you can’t understand the terminology, read it again, and again. If you still don’t get it – Don’t do it.
One final takeaway. 6 out of 7 option trades are losers. After years of practice I am quite often in that 1 group. Who do you think are the other 6?

jaytkay's avatar

I just want to say be very wary, especially of anyone who wants you to pay to play.

If day trading were a guaranteed income, we would all quit our day jobs and play the market all day from our beach chairs, while lighting cigars with $100 dollar bills.

Just like Vegas, don’t put in more than you can afford to lose, because odds are you will lose.

Ltryptophan's avatar

@worriedguy the new guys with lil’ experience.

LuckyGuy's avatar

@Ltryptophan I just gave you a GA.

Before you invest a dime I want you to open a My Yahoo account and on your page put in a finance section. Then add some stocks, options and commodities. Pretend you are buying and selling them.
Can your stomach take it?
Here are a few to get you started. I am not saying if they will go up or down – I am just showing you these as examples so you can get started. A commodity, a call derivative and a stock. (You need to enter the character strings I put in parentheses.)
Heating Oil Mar 10 (HOH10.NYM). $2.02
Ruger Call 12.50 April 10 (RGR100417C00012500) $0.35
Ford Motor Co. (F) $11.74

Now pretend you bought $1000 worth of each and see how many shares you have and how much you would have made or lost if the investment was real. Watch it every day for a week – while you are reading about the market. Good luck.

LuckyGuy's avatar

@Ltryptophan I noticed in another thread you mentioned you are a cashier. You can do you own market research. Are people starting to buy a certain product? Are they coming back for more? that might be a good company to investigate. Look at the options for it.
The job will not seem so boring and you might spot a good trend.
If I like a product, I look to see if the management is greedy or not. I then decide if there is a good play to make.

Cruiser's avatar

Practice trade and do it a lot. Open up 5 pretend accounts with 10 grand each. Trade each account differently with different strategies. When you can get all 5 to make money then you may be ready for real funds. Read read read along the way.

Rarebear's avatar

My opinion is that if you have to go onto Fluther to ask this question, you shouldn’t be getting into day trading.

Ltryptophan's avatar

@rarebear I didn’t have to, but if some member of our community is knowledgeable I wouldn’t mind some pointers!

davidbetterman's avatar

Go to night school!

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