Any traders here? Is it hard for a beginner to earn 50 bucks a day?

[Ghiedo27]

Most day traders resort to math voodoo (technical analysis), especially in currency markets.

Proper technical analysis isn't voodoo. Some people use the tool poorly, but the heart of it is calculating areas where the market may turn based on where large institutions are likely to get in or out of positions based on price history. I'd recommend Chris Lori and Connie Brown if you want more information.

 

[Soundmanred]

I DID IT, YOU CAN DO IT TOO!!

craps

 

[crownjules]

Short answer, yes, but with discipline and patience anyone can do it.

Long answer -

Back in the early 80s, a couple of very successful traders made a bet among one another. One of them would take a bunch of people off the street with no trading background at all and teach them how to trade. He taught them his system and it's said the 14 traders made around $150M in five years. They're called the Turtle Trading Group.

Anyone can be a trader, but 95% of people who attempt to do it will fail. Some will crumble under the pressure of trading with real money. Some because they don't use proper money management. Some because they don't stick to their system's rules.

The three key factors that make a good trader are: psychology, risk management, and the system / edge.

Psychology because it takes a certain mindset. How are you going to react when your trade is $100 in profit but looks like it's going to turn against you? Even if your system said the target was $200 profit? Are you going to close it out there on emotion or do you let your system's rules guide your decision? There's also no trader in the world that can boast a 100% win rate. How are you going to react to losing your 8th, 9th, or 10th straight loss in a row? Sometimes that's just how the odds play out. Traders and poker players have a very similar mental makeup and approach to their money management.

Which brings us to the next factor, risk or money management. As previously stated in the thread, you should never risk more than 1-2% of your account per trade. Additionally, every trade should have at least a 1:1 return on risk. That is to say, if you're willing to let a trade go $200 against you before closing it then you should at least stand to gain $200 from it. Preferably more. These two rules will allow you to grow your account even with just a 50% win rate.

Lastly, is your trading system or edge. These are the rules you trade on that give you a way to reliably identify opportunities to take profits from the market. There are hundreds of published systems out there. Moving average crosses, volume based entries, breakouts, trend trades, counter trend trades, news based, and numerous others that I can't name for sake of time and space. Look into them and find one that you feel comfortable trading. Or if you're particularly astute you can always create your own.

There are plenty of trading-based websites and forums out there. But as with any other place on the Internet, you have to separate the chaff from the wheat.

 

[JEDI]

Was going to write a long reply explaining why this is very likely to not work out, but I'll just say it's very likely to not work out. Less than 5% of day traders are profitable after a year.

Trade on paper for a few weeks just like you would do it for real. Make sure you account for all your commissions. Then you'll have an idea whether it makes sense. Remember, you have to be able to make money in down markets too.

short Apple!

It's going the way of the Blackberry

 

[OverVolt]

short Apple!

It's going the way of the Blackberry

lol

-THE WIDOW MAKER TRADE-

There ARE people who successfully short apple, like earlier this year. There IS a way to do it, but its not really that frequent that opportunities to short apple come along. The Risk-Reward as said above, is not really in your favor unless you have a system for shorting apple.

 

[JEDI]

Proper technical analysis isn't voodoo. Some people use the tool poorly, but the heart of it is calculating areas where the market may turn based on where large institutions are likely to get in or out of positions based on price history. I'd recommend Chris Lori and Connie Brown if you want more information.

any free/cheap Candlesticks programs to interpret the charts?

 

[Crusty]

any free/cheap Candlesticks programs to interpret the charts?

http://www.sierrachart.com/

 

[coloumb]

I don't think a part time job is what the OP wants - I suspect the OP has a job that allow for some flexibility [10x4 work schedule, pager based job, etc] I'd say I fall into the same category as the OP and would like to be able to use my computer that would help supplement my weekly income ["Trade" then deposit profits into my bank account at the end of the month] that I can do at home during "down time" [when I'm not being paged to go do my job] - something other than playing MMO's/pc games or mindlessly surfing all day.

 

[OVerLoRDI]

http://www.sierrachart.com/

Not free, but a very good program.

 

[chusteczka]

Hopefully you realize that you're one of us naysayers. since you recommended a buy-and-hold strategy instead of day trading .

There is a fine line here. Checking it all the time just stresses you out and makes you do stupid things. Not checking it at all can leave you waking up to your money gone.

The above advice is decent if you are INVESTING in well established corporations with a solid business plan. But you mentioned TRADING with a goal to make money daily. Meaning we are talking day trading right?

Day trading is very difficult, simply because there is so little information to go on. Most day traders resort to math voodoo (technical analysis), especially in currency markets. Whether or not you think TA is a good way to predict, you have to figure out. I wrote my senior paper on how TA is a self fulfilling prophecy. Some triangles form in an alignment with Jupiter? Price is going up! Buy buy! Look we were right! (gross over simplification)

So if you go the trader route backed by TA, keep in mind many other people are as well and you have to play the herd. Stay one step ahead of what is popular.

You are both correct. Oops.
It was late last night.

Maybe it is true that I am a naysayer who believes just jumping into daytrading is impossible. The market is like a living being with its own life, rules, and patterns. The only person who would ask if it is possible to make money by daytrading is someone who knows nothing of the market.

A person familiar enough to successfully make money by daytrading on the market would just do it, and not ask about it.

 

[OverVolt]

Taxes are probably your #1 concern in how you trade honestly.

 

[Imp]

Taxes are probably your #1 concern in how you trade honestly.

http://www.smartmoney.com/taxes/income/taxes-on-day-trading-9531/

Having my account down $10k doesn't make me regret trading, but havin to file my effing taxes at the end of the year does.

I had a freak out last year when I started getting foreign dividends, and made a stupid number of trades - many classed as "wash" trades.

You can lose your capital gains tax "advantage" if you day-trade. From what I've read, it varies case to case, but worst case, guberment sees what you do as your primary income source, so taxes it as income.

 

[crownjules]

Maybe it is true that I am a naysayer who believes just jumping into daytrading is impossible. The market is like a living being with its own life, rules, and patterns. The only person who would ask if it is possible to make money by daytrading is someone who knows nothing of the market.

A person familiar enough to successfully make money by daytrading on the market would just do it, and not ask about it.

These two viewpoints are in conflict. How can one not jump into day trading but at the same time just do it and not ask any questions?

 

[chusteczka]

These two viewpoints are in conflict. How can one not jump into day trading but at the same time just do it and not ask any questions?

One person cannot do both.

A person unfamiliar with theoretical finance or the market would ask if it is possible and cannot just jump in and be successful.

A person familiar with theoretical finance or the market would not ask if it is possible because they would have the ability to succeed.

IMO and understanding, a person unfamiliar with the market but bold enough to try would make baby steps, a few experimental moves at a time to gain experience and familiarity. Then follow those successful patterns until comfortable. Then move on to try something new while relying on those learned and successful patters as a foundation. (This is my process.)

Therefore, someone asking if it is possible to succeed in daytrading shows inexperience and lack of familiarity with the market. Such a person is not familiar enough to even take a baby step on their own without handholding.

 

[Leros]

On any given day I trade with an account having a buying power over $5,000,000. Biggest daily loss was around ~$30k, biggest daily gain was around ~$20k, but on the average we make money.

Granted, this is all completely automated, no humans involved except for the programming. The algorithms also only run for a small fraction of the day while it's the most highly profitable using our strategies.

Is there anything that makes your software special? I've talked to a few people who are into day trading and it seems like there a bunch of rules and indicators you can follow. It sounds like the biggest problem day traders have is making decisions with emotions rather than following the rules.

 

[Svnla]

Interesting thread. I may want to dip my toes into this, with a small amount that I can afford to lose of course.

 

[OverVolt]

Is there anything that makes your software special? I've talked to a few people who are into day trading and it seems like there a bunch of rules and indicators you can follow. It sounds like the biggest problem day traders have is making decisions with emotions rather than following the rules.

It sounds alot like a small-time HFT algo. I don't think you can just go to the store and buy one lol.

 

[Miramonti]

If you're going to daytrade, run it like a business and file a schedule c. That way you can write off your hardware or any other expenses (portion of rent/utilities etc) against your gains, and write off all losses against any gains too. And no self-employment taxes needed on gains.

 

[Doppel]

There are basically two kinds of people:

1) Those who know that trading in the manner the OP describes is not a realistic reality for essentially everybody on the planet (very few exceptions)
2) Those who think they are able to beat the market and either don't track their real return enough to know they aren't, or those who are about to lose big.

Trying to make a living from "trading" is silly. The way to make money is by trading other people's money and making money off a small cut of all the money they move.

There are no "rules" to follow that mean much and there are no technical indicators, either. Always you'll get newbs who made a lucky trade or two and think that now they've figured it out, though.

 

[OverVolt]

I think psychology plays a bigger role in short-term trading, but the longer you hold your stock, the more the fundamentals matter.

Buy the dips of solid companies and hold long term in diversified industries is basically Warren Buffets strategy. Think of what he did with BAC.

 

[Miramonti]

There are basically two kinds of people:

1) Those who know that trading in the manner the OP describes is not a realistic reality for essentially everybody on the planet (very few exceptions)
2) Those who think they are able to beat the market and either don't track their real return enough to know they aren't, or those who are about to lose big.

Trying to make a living from "trading" is silly. The way to make money is by trading other people's money and making money off a small cut of all the money they move.

There are no "rules" to follow that mean much and there are no technical indicators, either. Always you'll get newbs who made a lucky trade or two and think that now they've figured it out, though.

You forgot two more types of people. Those who understand the markets, and those who post comments like yours.

 

[Crusty]

Is there anything that makes your software special? I've talked to a few people who are into day trading and it seems like there a bunch of rules and indicators you can follow. It sounds like the biggest problem day traders have is making decisions with emotions rather than following the rules.

It sounds alot like a small-time HFT algo. I don't think you can just go to the store and buy one lol.

Pretty much correct. In general there are only a handful of trading 'strategies' and variations of them(hedged/non-hedged etc) that are used commonly. What becomes difficult is choosing what security and then when to trade that strategy.

I can safely say that nobody else uses our specifically tuned indicators to trade with, otherwise we wouldn't be able to make money like we do. So what makes us unique is the methodology we use to generate our indicators.

Lot's of people are mentioning emotion when trading, and it's absolutely true that it interferes. That's why there are no humans involved in the decision of when to buy/sell a security, all done through software. There are obviously circuit breakers that we can trigger to halt trading and liquidate our positions in the event of a problem, but in over a year of using the automated software we haven't had a reason to use them.

 

[Miramonti]

Just curious Crusty...how much historical data, ie how far back in time, does your systems or strategies incorporate in a 'signal' in order to trigger a trade? HFT can be nearly instantaneous, ie arbing between the various exchanges/order flow...technical analysis can use a lot of longer term moving averages...where does your system's approach lie in respect to price/time?

 

[OverVolt]

Just curious Crusty...how much historical data, ie how far back in time, does your systems or strategies incorporate in a 'signal' in order to trigger a trade? HFT can be nearly instantaneous, ie arbing between the various exchanges/order flow...technical analysis can use a lot of longer term moving averages...where does your system's approach lie in respect to price/time?

If he told you, he would have to kill you

 

[Miramonti]

If he told you, he would have to kill you

If that's the case, then it's worth knowing and I won't stop until I find out, before going into hiding that is.

It's a fairly innocuous question tho. Everyone has access to the same historical price data - what people do with it is of course is the difference.