Investors Opinions.....

[MomentsofSanity]

Thanks, ill check em out... I am very very new to the game, Hugo Drax - you need minimum 25k to open a margin day trading account? I very easily could dump that money to do so... but I do not want to drop that much and have it tied up just to play with. (i am not rich) I want to have full control of my monies - I will accept risk but I am simply looking to go with something to throw a few hundred every so often into and just dip my toe into the waters..... Do any/all the online brokerage firms mandate a 25k minimum account to allow you to trade? (even the ones with the 5.95/7.95 a trade fee?)

It's actually a FINRA rule (Pattern Day Trader). No way around it if you're in a margin account and your strategy is to truly day trade with frequency of more than 3 round trips in a rolling 5 business day period. You will need the minimum equity of 25K in the account. Unless of course day trades make up only 6% of your overall trade activity but I have yet to see that happen.

You can day trade in limited capacity in a cash accounts but you're limited to buy side settlement. Kind of puts a damper on things.

 

[Miramonti]

It's actually a FINRA rule (Pattern Day Trader). No way around it if you're in a margin account and your strategy is to truly day trade with frequency of more than 3 round trips in a rolling 5 business day period. You will need the minimum equity of 25K in the account. Unless of course day trades make up only 6% of your overall trade activity but I have yet to see that happen.

You can day trade in limited capacity in a cash accounts but you're limited to buy side settlement. Kind of puts a damper on things.

ie an SEC rule that brokerages are required to honor.

And stay away from options, especially newbies. They are high leverage, high risk derivatives, and easy strategies for low equity accounts are bs in the long run. Unless you're going to have a very knowledgeable approach and management techniques and disciplines, you will give up a large edge that inevitably will burn most people in the long run (muchless the short run.)

 

[Doppel]

OP can you just send me your money, at least that way you'll know who is using it when you lose it.

 

[MomentsofSanity]

Edit: NM. I misread.

 

[Jeff7]

...
I have noticed a very sharp increase in the number of ads for investing (apparently i have to say and day trading as well ). I don't have the paper in front of me but the WSJ noted that a significant number of Middle/Lower class Americans who left the market in 2008 are just now or only recently getting back in. Wasn't January the first time in 2 years that people put more money in mutual funds than they took out? Everyone wants a piece of the action without realizing most of the best pieces are long gone

Sell low, buy high.
:hmm:
Or something like that.

 

[Imdmn04]

You are unlikely going to make any money from day-trading. If you do, it is because of luck, not because you magically have some stock-picking skills that every other day-trader don't. In this case, you might as well put it all on black in Vegas.

Please take a finance and an financial accounting class before you go into the stock market.

In an efficient capital market (such as the U.S. stock market), all stocks are priced at Net Present Value = 0. It is just as likely to go up as it is to go down. All information (revenue growths, dividend growths, etc.) are already priced into the current price.

If you feel like you have to invest in something because you don't want to let your money inflate away under the mattress, then my advice to you is to pick an index fund and plan not to touch it for a long time.

You can't time the market, no one can, that is why Warren Buffet don't day trade.

 

[bryanl]

Meractik, why do you know you'll be a rare exception?

 

[OverVolt]

You are unlikely going to make any money from day-trading. If you do, it is because of luck, not because you magically have some stock-picking skills that every other day-trader don't. In this case, you might as well put it all on black in Vegas.

Please take a finance and an financial accounting class before you go into the stock market.

In an efficient capital market (such as the U.S. stock market), all stocks are priced at Net Present Value = 0. It is just as likely to go up as it is to go down. All information (revenue growths, dividend growths, etc.) are already priced into the current price.

If you feel like you have to invest in something because you don't want to let your money inflate away under the mattress, then my advice to you is to pick an index fund and plan not to touch it for a long time.

You can't time the market, no one can, that is why Warren Buffet don't day trade.

Eh is it "timing the market" or risk aversion.

Things can be too good at times, even my mom who doesn't invest knows "nothing goes up forever" when she heard it about the housing boom, when the banks are saying it, not good

If I knew how to trade oil... When I passed the pump and it was $1.55 in 2008. I knew I'd never see gas/oil ($39) that cheap in my whole life ever again financial crisis or not. Would have gone all-in no joke! :awe:

 

[Miramonti]

You are unlikely going to make any money from day-trading. If you do, it is because of luck, not because you magically have some stock-picking skills that every other day-trader don't. In this case, you might as well put it all on black in Vegas.

Please take a finance and an financial accounting class before you go into the stock market.

In an efficient capital market (such as the U.S. stock market), all stocks are priced at Net Present Value = 0. It is just as likely to go up as it is to go down. All information (revenue growths, dividend growths, etc.) are already priced into the current price.

If you feel like you have to invest in something because you don't want to let your money inflate away under the mattress, then my advice to you is to pick an index fund and plan not to touch it for a long time.

You can't time the market, no one can, that is why Warren Buffet don't day trade.

This is a common misconception from those who have had 'finance and financial accounting classes' but not much experience.

As long as buying begets buyers and selling begets sellers, there will *always* be market over and under-valuations in the short term and long term.

And market efficiency isn't why Warren Buffet doesn't daytrade. It's because once he enters a position, the valuations he expects to achieve won't likely occur by the end of the afternoon. If they did, you can bet he'd be willing to liquidate.

Opportunities and expectations can be partially considered a function of time, long term or short term. This however isn't generally something taught in finance and financial accounting classes.

 

[BUTCH1]

I saw a segment on "60 minutes" awhile back about how all the big brokerage houses had computer algorithms set up to buy/sell in fractions of a second and that day trading is a David vs Goliath type of set up, in other words don't risk it, it's like going to Vegas and expecting to profit..

 

[Jeff7]

I saw a segment on "60 minutes" awhile back about how all the big brokerage houses had computer algorithms set up to buy/sell in fractions of a second and that day trading is a David vs Goliath type of set up, in other words don't risk it, it's like going to Vegas and expecting to profit..

Stuff like this - a $300M cable to reduce latency by 6 milliseconds.



Here's a representation of how this high-speed trading market works.
:sneaky:

 

[Meractik]

Meractik, why do you know you'll be a rare exception?

I don't.

 

[bryanl]

Meractik, why do you know you'll be a rare exception?

I don't.

Then there may be hope for you.

It says something that many professional traders have their pensions invested only in index funds and don't trade them much. They know better than to believe what they tell their clients.

 

[Meractik]

Then there may be hope for you.

It says something that many professional traders have their pensions invested only in index funds and don't trade them much. They know better than to believe what they tell their clients.

I have stable lifecycle retirement fund investments with very small inherit risk. My bank tries to get me to change and push more money into more risky funds due to my age (they say im young enough to take the risk and allow time to make up for it), I refuse because I work hard for my money and do not want to lose it, Id rather gain slowly in the long run by utilizing more recent lifecycle funds and not doing anything aggressive than rely on luck of the market over time to regain losses.

It would be interesting to try to play the game and perhaps be a little more risky on my own... but now that I see a minimum 25k investment is required, forget that. I would have better odd's just gambling and when im up - walking... and saving that $. lol.