I have been away for the pass 5 days to help out in an event call wealth academy. This is an event teach people personal financial and creating multiple stream of income thorough investing, writing books, selling ideas and many more... It was a fruitful event for me as i learn alot through coaching people and get to meet other interesting people.
So today i back to post my trade. As you guys know i love to trade google as is a no brainer things for me to trade. My strategy has been proven time and time again.
Here is my winning trade for Google
BOT GOOG 500 1 CALL 19.70
SLD GOOG 500 1 CALL 23.60
Net Profit: $388
BOT GOOG 520 1 PUT 16.40
SLD GOOG 520 1 PUT 13.10
Net Loss: -$332
Total Net Profit: $56
This is a no fear game ... Less risk greater gain. Powerfu stuff !! i rather gain 50 dollars everyday without any fear and almost have 90% of winning chance =)
Tuesday, July 31, 2007
Wednesday, July 25, 2007
My Daily Trade on Google and GS
GS Aug2007 220P Net profit $333 (4 puts)
GOOG Aug2007 500C Net profit $245.75
GOOG Aug2007 520P Net profit $213
Total Net profit $791.75 ;D
Well nothing to say actually cos i just stick to my plan. GS i just buy put and put and put and put ... Goog i buy call and put. Wao i found out something that really open my eyes big big...
Just now i buy a 500C and a 520P when goog is at around 500 buck. When the Google stock move up my Call earn more than the lost of my put ... so when Goog hit 518 ... my call become deep deep in the money and my put become out of the money. Wao then i realise this is the safest way to trade Google ... and also realise the power of delta and the stuff about options ... lol
And also according to my research Google will just make a small U turn at least 1 time and also It like to go against the market. ;D Weird stock but i love it ...
GOOG Aug2007 500C Net profit $245.75
GOOG Aug2007 520P Net profit $213
Total Net profit $791.75 ;D
Well nothing to say actually cos i just stick to my plan. GS i just buy put and put and put and put ... Goog i buy call and put. Wao i found out something that really open my eyes big big...
Just now i buy a 500C and a 520P when goog is at around 500 buck. When the Google stock move up my Call earn more than the lost of my put ... so when Goog hit 518 ... my call become deep deep in the money and my put become out of the money. Wao then i realise this is the safest way to trade Google ... and also realise the power of delta and the stuff about options ... lol
And also according to my research Google will just make a small U turn at least 1 time and also It like to go against the market. ;D Weird stock but i love it ...
Saturday, July 21, 2007
My consistent winning Trade on Google (Thur/Fri)
Thurday (Bullish day)
BTO GOOG July 540 4 Call - ($19.4 , $19.1, $18.5, $16.5)
STC GOOG July 540 4 Call - $18.80 (4hours) (opening window period)
Nett Profit: $163
Got Cheated by ox chart at first, then the price suddenly drop... panick abit but when the chart back to normal, i study the chart again and brought the last call at 16.5 which really make back everything . Job done for today ... happy trading
Friday (Bearish day)
BTO GOOG Aug 510 1 Call - $25.6
STC GOOG Aug 510 1 Call - $26.6 ( 92sec ) (opening period)
Nett Profit: $98 ($2 commision)
Faster scalp =)
BTO GOOG Aug 520 1 Put - $12.7
STC GOOG Aug 520 1 Put - $13.1 (20mins) (2nd window)
Net Profit: $38 ($2 commision)
Total Profit: $136
Everybody buy a put today sure win for most of the stock but ... for google you must buy a call and you will win a jackpot!!! I started to love google for being such a unique stock.
If you guys follow closerly to my day trade and scalping on Google, you guys will already notice that google like/love to go the oppsite direction of the Market trend of the day. I can make money from a put and call from whichever direction the Google run.
To trade any stock, you need to study the stock closely. Once you know the stock inside out, it become a 2nd nature of taking profit naturally. Study Hard and Make Your Own Strategy
BTO GOOG July 540 4 Call - ($19.4 , $19.1, $18.5, $16.5)
STC GOOG July 540 4 Call - $18.80 (4hours) (opening window period)
Nett Profit: $163
Got Cheated by ox chart at first, then the price suddenly drop... panick abit but when the chart back to normal, i study the chart again and brought the last call at 16.5 which really make back everything . Job done for today ... happy trading
Friday (Bearish day)
BTO GOOG Aug 510 1 Call - $25.6
STC GOOG Aug 510 1 Call - $26.6 ( 92sec ) (opening period)
Nett Profit: $98 ($2 commision)
Faster scalp =)
BTO GOOG Aug 520 1 Put - $12.7
STC GOOG Aug 520 1 Put - $13.1 (20mins) (2nd window)
Net Profit: $38 ($2 commision)
Total Profit: $136
Everybody buy a put today sure win for most of the stock but ... for google you must buy a call and you will win a jackpot!!! I started to love google for being such a unique stock.
If you guys follow closerly to my day trade and scalping on Google, you guys will already notice that google like/love to go the oppsite direction of the Market trend of the day. I can make money from a put and call from whichever direction the Google run.
To trade any stock, you need to study the stock closely. Once you know the stock inside out, it become a 2nd nature of taking profit naturally. Study Hard and Make Your Own Strategy
Thursday, July 19, 2007
My Scalp on Google (Tues/Wed)
Tuesday
BTO GOOG July 540 Call - $20.20
STC GOOG July 540 Call - $20.40 (7mins)
Nett Profit: $18
BTO GOOG July 550 1 Put - $10.60
STC GOOG July 550 1 Put - $10.80 (9mins)
Nett Profit: $18
Waiting for it to stable first then see if i have any entry. i will be back again ... =)
BTO GOOG July 550 3 Put - ( $11 , $10.3 , $9.4 )
STC GOOG July 550 3 Put - $10.80 (2 hours)
Nett Profit: $164.75
Total Net Profit: $200.75 ($10.75 commision)
It feel so good that my strategy work according to my plan. Stick to it without fear. 2 months plus of effort spend analyzing goog finally paid off.
Wednesday
BTO GOOG July 550 1 Put - $15.40
STC GOOG July 550 1 Put - $16.00 (10mins)
Nett Profit: $58 ($2 commision)
yeah im fine with 60 buck hehe as i just come back home.
Most of the trades i do it at the opening bell which is the first window period for scalper like me to be active. 12.30 to 1.30 is for another window period to place a day trade. The second window is the closing window which is from 2 - 4 . As a singaporean i usually dont stay up till 4am in the morning so i traded most of the time at the opening window.
So you need to know what kind of trade is good for which period of the day. It will either make or break you . Good luck guys with your trading styles. =)
BTO GOOG July 540 Call - $20.20
STC GOOG July 540 Call - $20.40 (7mins)
Nett Profit: $18
BTO GOOG July 550 1 Put - $10.60
STC GOOG July 550 1 Put - $10.80 (9mins)
Nett Profit: $18
Waiting for it to stable first then see if i have any entry. i will be back again ... =)
BTO GOOG July 550 3 Put - ( $11 , $10.3 , $9.4 )
STC GOOG July 550 3 Put - $10.80 (2 hours)
Nett Profit: $164.75
Total Net Profit: $200.75 ($10.75 commision)
It feel so good that my strategy work according to my plan. Stick to it without fear. 2 months plus of effort spend analyzing goog finally paid off.
Wednesday
BTO GOOG July 550 1 Put - $15.40
STC GOOG July 550 1 Put - $16.00 (10mins)
Nett Profit: $58 ($2 commision)
yeah im fine with 60 buck hehe as i just come back home.
Most of the trades i do it at the opening bell which is the first window period for scalper like me to be active. 12.30 to 1.30 is for another window period to place a day trade. The second window is the closing window which is from 2 - 4 . As a singaporean i usually dont stay up till 4am in the morning so i traded most of the time at the opening window.
So you need to know what kind of trade is good for which period of the day. It will either make or break you . Good luck guys with your trading styles. =)
Tuesday, July 17, 2007
My Consistent Scalp on Google ( Friday / Monday )
Last Friday
BTO GOOG July 540 Call - $19.10
STC GOOG July 540 Call - $18.70
Nett lost: $40
BTO GOOG July 550 2 Put - $11.70
STC GOOG July 550 2 Put - $12.10
Nett Profit: $80
BTO FLR Aug 110 Call - $11.90
STC FLR Aug 110 Call - $12.30
Nett Profit: $40
Total Net Profit: $72.50 ($7.5 commision)
Yeah!! My strategy on Google work well. If i stick to my rule i will be able to make my CALL too which will give me another 90 bucks. Well it okay i learn something new on Google. Im getting better and better with Google. The Contrarian will love Google as it like to go oppsite of the Nasdaq. Weird !!
Yesterday (Monday)
BTO GOOG July 540 Call - $20.30
STC GOOG July 540 Call - $20.80 (3mins)
Nett Profit: $50
BTO GOOG July 550 2 Put - $11.20
STC GOOG July 550 2 Put - $11.50 (intraday)
Nett Profit: $60
Total Net Profit: $106 ($4 commision)
Yeah!! My strategy on Google work again. This time i stick to my rule. i almost freak out when google chiong up till 559 lol , lucky i automate my trade. My strategy still have to tweak abit to maximise the gain as my current strategy only limit to a small range of goog spike. As expected Goog like to spike up and down so when it spike up . i just buy another put to avg down my opening put and set my target profit and i go to sleep . Hehe..
My call is a 3mins scalp then the put is a intraday trade.
BTO GOOG July 540 Call - $19.10
STC GOOG July 540 Call - $18.70
Nett lost: $40
BTO GOOG July 550 2 Put - $11.70
STC GOOG July 550 2 Put - $12.10
Nett Profit: $80
BTO FLR Aug 110 Call - $11.90
STC FLR Aug 110 Call - $12.30
Nett Profit: $40
Total Net Profit: $72.50 ($7.5 commision)
Yeah!! My strategy on Google work well. If i stick to my rule i will be able to make my CALL too which will give me another 90 bucks. Well it okay i learn something new on Google. Im getting better and better with Google. The Contrarian will love Google as it like to go oppsite of the Nasdaq. Weird !!
Yesterday (Monday)
BTO GOOG July 540 Call - $20.30
STC GOOG July 540 Call - $20.80 (3mins)
Nett Profit: $50
BTO GOOG July 550 2 Put - $11.20
STC GOOG July 550 2 Put - $11.50 (intraday)
Nett Profit: $60
Total Net Profit: $106 ($4 commision)
Yeah!! My strategy on Google work again. This time i stick to my rule. i almost freak out when google chiong up till 559 lol , lucky i automate my trade. My strategy still have to tweak abit to maximise the gain as my current strategy only limit to a small range of goog spike. As expected Goog like to spike up and down so when it spike up . i just buy another put to avg down my opening put and set my target profit and i go to sleep . Hehe..
My call is a 3mins scalp then the put is a intraday trade.
Friday, July 13, 2007
How to Counter Your Fear In Trading
The author - Lawrence
The FEAR that i encounter during the trade
- I fear that my winning trade will become a losing trade
- I fear that my losing trade will not be able to become winning trade
During Off-trading
- I fear that the market will turn against me
- I fear that i wont be able to make it back home on the opening of market.
The Measure that I take to COUNTER the FEAR
- Stick to my plan and stategy
- Have my Target profit and Stop lost
- Practice and practice
- Look at the indicators
- Automate it
Conrad
I fear my own Powers of Attraction!
So I am not going to read this post again before I start trading!
Seriously, my deepest but not the only fear is that my pride could be ruling my head without me realizing it until its too late. Its not easy being a coach and admitting you've made a mistake. So pride tends to rule in situations like those.
My solution is simple:
Cut Loss. Even if its too late, just cut loss. And then tell everyone that you were an idiot.
Jack
My fear is having too many winning trades in a row, making me think that I am in the fantasy land.
My fear is that I am able to guess where the market goes correctly.
My fear is that I am able to say to myself I am never wrong.
So, the catch is to stick to my own trading systems, and automate the trades. This is what Tom Gentile says:
1. When you are still looking for the trade, the computer is your employee and you are the boss.
2. But when you are in the trade, the roles reverse. The computer is your boss and you have to be the employee to listen to the computer. Let the trade do what it is supposed to do.
Zand
Well my fear is simply Pride !!!
Staying Humble is a challenge, and I work very hard to stay that way.
Jmot
My earlier fears stems from my trading account. My heart sinks when I know that my trading account is going deeper and deeper into the reds. I used to always look at my trading account as a gauge of my trading performance. I realized that my emotions are tied to my trading account to the extent that it has also influenced my trading decisions and judgment.
Something which I consciously try to avoid doing now. I try to focus on the quality of my trades and try to improve them instead of how they will affect my trading account.
Someone out there share the same experience?
Benard
My fears:
1. Holding on to a position and some trashy news or major unexpected world event happens that causes the market to tank, and I do not have the stop loss in place to take money off the table. The market takes all my profits away.
2. Holding on to a losing position and sweating while it continues to either tank or move sideways.
3. Reporting to my son that I stubbornly held on to a losing trade instead of trading my plan, aka, behaving like an idiot!
My learnings to far:
1. Easy to read and talk about cut loss. Emotionally hard to do as we all want to win. Having done some major cut loss, its now easier. I guess practice makes perfect. If a trade/scalp is not going my way, I will cut loss without hesitation. Yes, it may reverse and go my way later after I cut loss. No matter because it could also go the other way! I'm learning to trade my plan. Easy to read about, talk about, very hard to do.
2. I'm working out my stop loss positions to be activated for my value stocks as well in case I don't have time to react to market conditions
3. Trade with the trend. If trend reverses against me, I cut loss. Hard to fight the trend, and harder to keep hoping day after day that tomorrow will be better.
4. After cutting loss on a losing position, I feel better, mind feels at ease, feel calmer and can think better. Easy to talk about, hard to do.
Thoughts
These are a few guys that have share their experience in trading. I hope that You will be benefit from these sharing. To know more about the psychology of trading, you can feel free to visit the trading forums - http://www.patterntrader.proboards106.com/ , or visit my mentor blog conrad - http://www.conradalvinlim.com/
I hope that there will be more people sharing their thoughts and opinons. Thank you very much for visiting my newly born blog. Have a nice day trading =)
The FEAR that i encounter during the trade
- I fear that my winning trade will become a losing trade
- I fear that my losing trade will not be able to become winning trade
During Off-trading
- I fear that the market will turn against me
- I fear that i wont be able to make it back home on the opening of market.
The Measure that I take to COUNTER the FEAR
- Stick to my plan and stategy
- Have my Target profit and Stop lost
- Practice and practice
- Look at the indicators
- Automate it
Conrad
I fear my own Powers of Attraction!
So I am not going to read this post again before I start trading!
Seriously, my deepest but not the only fear is that my pride could be ruling my head without me realizing it until its too late. Its not easy being a coach and admitting you've made a mistake. So pride tends to rule in situations like those.
My solution is simple:
Cut Loss. Even if its too late, just cut loss. And then tell everyone that you were an idiot.
Jack
My fear is having too many winning trades in a row, making me think that I am in the fantasy land.
My fear is that I am able to guess where the market goes correctly.
My fear is that I am able to say to myself I am never wrong.
So, the catch is to stick to my own trading systems, and automate the trades. This is what Tom Gentile says:
1. When you are still looking for the trade, the computer is your employee and you are the boss.
2. But when you are in the trade, the roles reverse. The computer is your boss and you have to be the employee to listen to the computer. Let the trade do what it is supposed to do.
Zand
Well my fear is simply Pride !!!
Staying Humble is a challenge, and I work very hard to stay that way.
Jmot
My earlier fears stems from my trading account. My heart sinks when I know that my trading account is going deeper and deeper into the reds. I used to always look at my trading account as a gauge of my trading performance. I realized that my emotions are tied to my trading account to the extent that it has also influenced my trading decisions and judgment.
Something which I consciously try to avoid doing now. I try to focus on the quality of my trades and try to improve them instead of how they will affect my trading account.
Someone out there share the same experience?
Benard
My fears:
1. Holding on to a position and some trashy news or major unexpected world event happens that causes the market to tank, and I do not have the stop loss in place to take money off the table. The market takes all my profits away.
2. Holding on to a losing position and sweating while it continues to either tank or move sideways.
3. Reporting to my son that I stubbornly held on to a losing trade instead of trading my plan, aka, behaving like an idiot!
My learnings to far:
1. Easy to read and talk about cut loss. Emotionally hard to do as we all want to win. Having done some major cut loss, its now easier. I guess practice makes perfect. If a trade/scalp is not going my way, I will cut loss without hesitation. Yes, it may reverse and go my way later after I cut loss. No matter because it could also go the other way! I'm learning to trade my plan. Easy to read about, talk about, very hard to do.
2. I'm working out my stop loss positions to be activated for my value stocks as well in case I don't have time to react to market conditions
3. Trade with the trend. If trend reverses against me, I cut loss. Hard to fight the trend, and harder to keep hoping day after day that tomorrow will be better.
4. After cutting loss on a losing position, I feel better, mind feels at ease, feel calmer and can think better. Easy to talk about, hard to do.
Thoughts
These are a few guys that have share their experience in trading. I hope that You will be benefit from these sharing. To know more about the psychology of trading, you can feel free to visit the trading forums - http://www.patterntrader.proboards106.com/ , or visit my mentor blog conrad - http://www.conradalvinlim.com/
I hope that there will be more people sharing their thoughts and opinons. Thank you very much for visiting my newly born blog. Have a nice day trading =)
My Humble Ride on Google and GS.
Did you get a ride from the MAD BULL RUN ?
GS July 210 1 Call (12.90 - 13.90) - $98
GS July 210 1 Call (13.30 - 13.60) - $28
GOOG July 550 1 Put (17.70 - 17.10) - (-$62)
GOOG July 540 2 Call (14.00/13.70 - 14.50) - $126
Total Net Profits - $190
I trade on Goldman Sach (GS) and Google (GOOG) daily. I will just ride on the market sentiment. You will not get 100 percent winning trade. The most important is to minimise your loses and maximise your gain. You have to know your stock inside out so that you will know the pattern of the stock.
Do you know that even on a very bullish day, Google will not really react or follow the market as it make a bearish run initially and make a come back during the last hour to make a positive gain of +0.80...
GS July 210 1 Call (12.90 - 13.90) - $98
GS July 210 1 Call (13.30 - 13.60) - $28
GOOG July 550 1 Put (17.70 - 17.10) - (-$62)
GOOG July 540 2 Call (14.00/13.70 - 14.50) - $126
Total Net Profits - $190
I trade on Goldman Sach (GS) and Google (GOOG) daily. I will just ride on the market sentiment. You will not get 100 percent winning trade. The most important is to minimise your loses and maximise your gain. You have to know your stock inside out so that you will know the pattern of the stock.
" Know yourself, Know the enemy,
100 battle, 100 win" by Sun Tze
Do you know that even on a very bullish day, Google will not really react or follow the market as it make a bearish run initially and make a come back during the last hour to make a positive gain of +0.80...
Thursday, July 12, 2007
My Consistent Scalp on Google.
GOOG July 550 1 Put - $58 (6mins)
GOOG July 540 1 Call - $28 (3mins)
Total Profit: $86
IB - Interactive Brokerage
OX - Option Express
Wao IB Rox!! woohoo ... lol ... i feel like im flying without the weight and the stuff that i can do in IB is alot better and efficiency than in OX. Nonetheless OX still provide me a good 6 months training. Those who like to day trade or scalp, I really recommend you guys to paper trade and train yourself using OX paper trading platform.
OX give you the weight of having 30 buck commision and you have to trade it using market order as the virtual platform will filled you slowly if you using a limit order.
So if you can consistently profitable paper trade using OX, Im pretty sure you will make alot more when you trade REAL money on IB platform.
GOOG July 540 1 Call - $28 (3mins)
Total Profit: $86
IB - Interactive Brokerage
OX - Option Express
Wao IB Rox!! woohoo ... lol ... i feel like im flying without the weight and the stuff that i can do in IB is alot better and efficiency than in OX. Nonetheless OX still provide me a good 6 months training. Those who like to day trade or scalp, I really recommend you guys to paper trade and train yourself using OX paper trading platform.
OX give you the weight of having 30 buck commision and you have to trade it using market order as the virtual platform will filled you slowly if you using a limit order.
So if you can consistently profitable paper trade using OX, Im pretty sure you will make alot more when you trade REAL money on IB platform.
Wednesday, July 4, 2007
My Consistent Profitable Trade on Google and GS.
My winning trades ...
07/03/2007 O STC .GOPGV - GOOG JUL 520 Call 1 $19.70 $14.95 $1,955.01
07/03/2007 O STC .GOPGV - GOOG JUL 520 Call 1 $18.60 $14.95 $1,845.02
07/02/2007 O BTO .GOPGV - GOOG JUL 520 Call 1 $19.50 $14.95 ($1,964.95)
06/29/2007 O BTO .GOPGV - GOOG JUL 520 Call 1 $18.00 $14.95 ($1,814.95)
20.13
Total Realized Gain for GOOG $20.13
GS
07/03/2007 O
STC .GPYGB - GS JUL 210 Call 2 $13.40 $14.95 $2,665.00
07/02/2007 O BTO
.GPYGB - GS JUL 210 Call 2 $11.60 $14.95 ($2,334.95) 330.05
Total Realized
Gain for GS $330.05
Total Realized Gain $350.18
Yeah!! im happy with the trade so far and my testing on Goog. . One thing i still fail to exercise is letting my profit run. For example i should just take 1 contract from GS to make a profit and let the other contract run.
I realize that i have the patience to wait for a losing trade but i dun have the freaking patient to wait for winning Trade. One very good example is goog. i knew that goog will go up to 532 but i miss the profit taking due to busy or miss the target ... i still have alot of refining to do . especially the emotion and plan...
Trading really need to HAVE the CORRECT patience ...
i use the word COrrECT cos you need to have PATIENCE to see your profits run ... but you do not need to have PATIENCE to see your trade losing and hoping that it will come back.
Pre holiday market RALLy ... GS and GOOG run wild during the the last 30 mins ...
Hot Tips ...
The day before the US holiday will most likely to be a bullish day.
Why ?
Part of the reason is due to the self fulfilling prophecy and the holiday mood.
07/03/2007 O STC .GOPGV - GOOG JUL 520 Call 1 $19.70 $14.95 $1,955.01
07/03/2007 O STC .GOPGV - GOOG JUL 520 Call 1 $18.60 $14.95 $1,845.02
07/02/2007 O BTO .GOPGV - GOOG JUL 520 Call 1 $19.50 $14.95 ($1,964.95)
06/29/2007 O BTO .GOPGV - GOOG JUL 520 Call 1 $18.00 $14.95 ($1,814.95)
20.13
Total Realized Gain for GOOG $20.13
GS
07/03/2007 O
STC .GPYGB - GS JUL 210 Call 2 $13.40 $14.95 $2,665.00
07/02/2007 O BTO
.GPYGB - GS JUL 210 Call 2 $11.60 $14.95 ($2,334.95) 330.05
Total Realized
Gain for GS $330.05
Total Realized Gain $350.18
Yeah!! im happy with the trade so far and my testing on Goog. . One thing i still fail to exercise is letting my profit run. For example i should just take 1 contract from GS to make a profit and let the other contract run.
I realize that i have the patience to wait for a losing trade but i dun have the freaking patient to wait for winning Trade. One very good example is goog. i knew that goog will go up to 532 but i miss the profit taking due to busy or miss the target ... i still have alot of refining to do . especially the emotion and plan...
Trading really need to HAVE the CORRECT patience ...
i use the word COrrECT cos you need to have PATIENCE to see your profits run ... but you do not need to have PATIENCE to see your trade losing and hoping that it will come back.
Pre holiday market RALLy ... GS and GOOG run wild during the the last 30 mins ...
Hot Tips ...
The day before the US holiday will most likely to be a bullish day.
Why ?
Part of the reason is due to the self fulfilling prophecy and the holiday mood.
Day Trading - Your Dollars at Risk
Day Trading is very dangerous if you do not know what you are doing because the US market is very volatile. If the market goes aganist your trading, then you will make a lose within a day. It is a HIGH RISK HIGH RETURN GAME.
I chance upon this following article which is from the website of US Securities and Exchange Commision. This article educate or warn the investor or people the danger about day trading.
The Article ...
Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day traders usually buy on borrowed money, hoping that they will reap higher profits through leverage, but running the risk of higher losses too.
While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.
Here are some of the facts that every investor should know about day trading:
Be prepared to suffer severe financial losses
Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status. Given these outcomes, it's clear: day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.
Day traders do not "invest"
Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.
Day trading is an extremely stressful and expensive full-time job
Day traders must watch the market continuously during the day at their computer terminals. It's extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.
Day traders depend heavily on borrowing money or buying stocks on margin
Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads.
Don't believe claims of easy profits
Don't believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.
Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders
Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don't believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.
Remember that "educational" seminars, classes, and books about day trading may not be objective
Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.
Check out day trading firms with your state securities regulator
Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. Confirm registration by calling your state securities regulator and at the same time ask if the firm has a record of problems with regulators or their customers.
Some thoughts...
I agree with most of the points that this article stated except for one. Yes there are day traders who borrow money to trade but not every traders. If you are really interested in day trading, please paper trade first and have a plan to trade it profitable consistently. All the best for all inspiring day trader.
I chance upon this following article which is from the website of US Securities and Exchange Commision. This article educate or warn the investor or people the danger about day trading.
The Article ...
Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day traders usually buy on borrowed money, hoping that they will reap higher profits through leverage, but running the risk of higher losses too.
While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.
Here are some of the facts that every investor should know about day trading:
Be prepared to suffer severe financial losses
Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status. Given these outcomes, it's clear: day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.
Day traders do not "invest"
Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.
Day trading is an extremely stressful and expensive full-time job
Day traders must watch the market continuously during the day at their computer terminals. It's extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.
Day traders depend heavily on borrowing money or buying stocks on margin
Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads.
Don't believe claims of easy profits
Don't believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.
Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders
Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don't believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.
Remember that "educational" seminars, classes, and books about day trading may not be objective
Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.
Check out day trading firms with your state securities regulator
Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. Confirm registration by calling your state securities regulator and at the same time ask if the firm has a record of problems with regulators or their customers.
Some thoughts...
I agree with most of the points that this article stated except for one. Yes there are day traders who borrow money to trade but not every traders. If you are really interested in day trading, please paper trade first and have a plan to trade it profitable consistently. All the best for all inspiring day trader.
Monday, July 2, 2007
Charateristic - Day Trading
Characteristics of a Day Trader
This article will focus on professional day traders - that is, those that trade for a living, not simply as a hobby or for a “gambling high”. These traders are typically well-established in the field and have in-depth knowledge of the marketplace. Here are some of the prerequisites to day trading:
Knowledge and Experience in the Marketplace
Individuals who attempt to day trade without an understanding of market fundamentals often end up losing money.
Sufficient Capital
One cannot expect to make money day trading. Day traders use only risk capital, which they can afford to lose. Not only does this protect them from financial ruin, but it also helps eliminate emotion from their trading. A large amount of capital is often necessary to capitalize effectively on intra-day price movements.
A Strategy
A trader needs an edge over the rest of the market. There are several different strategies that day traders utilize, including: swing trading, arbitrage as well as trading news, among others. These strategies are refined until they produce consistent profits and effectively limit losses.
Discipline
A profitable strategy is useless without discipline. Many day traders end up losing a lot of money because they fail to make trades that meet their own criteria. As they say, “Plan the trade and trade the plan.” Success is impossible without discipline.
Day Trading for a Living
There are two primary divisions of professional day traders: those who work alone and/or those who work for a larger institution. Most day traders who trade for a living work for a large institution. The fact is these people have access to things individual traders could only dream of: a direct line to a dealing desk, large amounts of capital and leverage, expensive analytical software and much more. These traders are typically the ones looking for easy profits that can be made from arbitrage opportunities and news events. The resources to which they have access allow them to capitalize on these less risky day trades before individual traders can react. Individual traders often manage other people's money or simply trade with their own. Few of them have access to a dealing desk; however, they often have strong ties to a brokerage (due to the large amounts of commission spending) and access to other resources. However, the limited scope of these resources prevents them from competing directly with institutional day traders; instead, they are forced to take more risks. Individual traders typically day trade using technical analysis and swing trades - combined with some leverage - to generate adequate profits on such small price movements in highly liquid stocks.
Trading
Day trading demands access to some of the most complex financial services and instruments in the marketplace. Day traders require:
Access to the Trading Desk
This is usually reserved for traders working for larger institutions or those who manage large amounts of money. The dealing desk provides these traders with instantaneous order executions, which can become important, especially when sharp price movements occur. For example, when an acquisition is announced, day traders looking at merger arbitrage can get their orders in before the rest of the market, taking advantage of the price differential.
Multiple News Sources
In the move "Wall Street" Gordon Gekko says that 'information is the most important commodity when trading’. News provides the majority of opportunities day traders capitalize on, so it is imperative to be the first to know when something big happens. The typical trading room contains access to the Dow Jones Newswire, televisions showing CNBC and other news agencies, as well as software that constantly analyzes various other news sources for important stories.
Analytical Software
Trading software is an expensive necessity for most day traders. Those who rely on technical indicators or swing trades rely more on software than news. This software typically contains many features, including:
Automatic pattern recognition - This means that the trading program identifies technical indicators like flags, channels and even more complex indicators like Elliott Wave patterns.
Genetic and neural applications - These are programs that utilize neural networks and genetic algorithms to perfect trading systems to make more accurate predictions of future price movements. (see Neural Trading: Biological Keys to Profit.)
Broker integration - Some of these applications even interface directly with the brokerage, which allows for instantaneous and even automatic execution of trades. This is helpful for eliminating emotion from trading and improving execution times.
Back testing - This allows traders to look at how a certain strategy would have performed in the past in order to predict more accurately how it will perform in the future (although past performance is not always indicative of future results).
Combined these tools provide traders with an edge over the rest of the marketplace. It is easy to see why, without them, so many inexperienced traders lose money.
Conclusion
Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable. Day traders, both institutional and individual, play an important role in the marketplace by keeping the markets efficient and liquid. Some argue that individuals should stay away from day trading, while others argue that it is a viable means to profit. And although it is becoming increasingly popular among inexperienced traders, it should be left primarily to those with the skills and resources needed to succeed.
by Justin Kuepper
This article will focus on professional day traders - that is, those that trade for a living, not simply as a hobby or for a “gambling high”. These traders are typically well-established in the field and have in-depth knowledge of the marketplace. Here are some of the prerequisites to day trading:
Knowledge and Experience in the Marketplace
Individuals who attempt to day trade without an understanding of market fundamentals often end up losing money.
Sufficient Capital
One cannot expect to make money day trading. Day traders use only risk capital, which they can afford to lose. Not only does this protect them from financial ruin, but it also helps eliminate emotion from their trading. A large amount of capital is often necessary to capitalize effectively on intra-day price movements.
A Strategy
A trader needs an edge over the rest of the market. There are several different strategies that day traders utilize, including: swing trading, arbitrage as well as trading news, among others. These strategies are refined until they produce consistent profits and effectively limit losses.
Discipline
A profitable strategy is useless without discipline. Many day traders end up losing a lot of money because they fail to make trades that meet their own criteria. As they say, “Plan the trade and trade the plan.” Success is impossible without discipline.
Day Trading for a Living
There are two primary divisions of professional day traders: those who work alone and/or those who work for a larger institution. Most day traders who trade for a living work for a large institution. The fact is these people have access to things individual traders could only dream of: a direct line to a dealing desk, large amounts of capital and leverage, expensive analytical software and much more. These traders are typically the ones looking for easy profits that can be made from arbitrage opportunities and news events. The resources to which they have access allow them to capitalize on these less risky day trades before individual traders can react. Individual traders often manage other people's money or simply trade with their own. Few of them have access to a dealing desk; however, they often have strong ties to a brokerage (due to the large amounts of commission spending) and access to other resources. However, the limited scope of these resources prevents them from competing directly with institutional day traders; instead, they are forced to take more risks. Individual traders typically day trade using technical analysis and swing trades - combined with some leverage - to generate adequate profits on such small price movements in highly liquid stocks.
Trading
Day trading demands access to some of the most complex financial services and instruments in the marketplace. Day traders require:
Access to the Trading Desk
This is usually reserved for traders working for larger institutions or those who manage large amounts of money. The dealing desk provides these traders with instantaneous order executions, which can become important, especially when sharp price movements occur. For example, when an acquisition is announced, day traders looking at merger arbitrage can get their orders in before the rest of the market, taking advantage of the price differential.
Multiple News Sources
In the move "Wall Street" Gordon Gekko says that 'information is the most important commodity when trading’. News provides the majority of opportunities day traders capitalize on, so it is imperative to be the first to know when something big happens. The typical trading room contains access to the Dow Jones Newswire, televisions showing CNBC and other news agencies, as well as software that constantly analyzes various other news sources for important stories.
Analytical Software
Trading software is an expensive necessity for most day traders. Those who rely on technical indicators or swing trades rely more on software than news. This software typically contains many features, including:
Automatic pattern recognition - This means that the trading program identifies technical indicators like flags, channels and even more complex indicators like Elliott Wave patterns.
Genetic and neural applications - These are programs that utilize neural networks and genetic algorithms to perfect trading systems to make more accurate predictions of future price movements. (see Neural Trading: Biological Keys to Profit.)
Broker integration - Some of these applications even interface directly with the brokerage, which allows for instantaneous and even automatic execution of trades. This is helpful for eliminating emotion from trading and improving execution times.
Back testing - This allows traders to look at how a certain strategy would have performed in the past in order to predict more accurately how it will perform in the future (although past performance is not always indicative of future results).
Combined these tools provide traders with an edge over the rest of the marketplace. It is easy to see why, without them, so many inexperienced traders lose money.
Conclusion
Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable. Day traders, both institutional and individual, play an important role in the marketplace by keeping the markets efficient and liquid. Some argue that individuals should stay away from day trading, while others argue that it is a viable means to profit. And although it is becoming increasingly popular among inexperienced traders, it should be left primarily to those with the skills and resources needed to succeed.
by Justin Kuepper
Introduction - Day Trading
I will be running a series of Day Trading articles this week. Starting from Introduction of Day Trading , then follow by characteristic , your dollars at risk , psychology, and many more ...
Some people may already know why i run this articles. Im a scalper and day trader by nature. If you check out my archive, you will know that i earn most of my money through scalping(meaning earn money within an hour) or day trading(within a day). You guys can also check out the investing forum at the right navigation bar - my link to see more of my daily winning trades.
An Introduction - Day Trading
Day trading is defined as the buying and selling of a security within a single trading day. This can occur in any marketplace but is most common in the foreign-exchange (forex) market and stock market. Typically, day traders are well educated and well funded. They utilize high amounts of leverage and short-term trading strategies to capitalize on small price movements in highly liquid stocks or currencies. Day traders serve two critical functions in the marketplace - they keep the markets running efficiently via arbitrage and they provide much of the markets' liquidity (especially in the stock market).
The Controversy
Search "day trading" on Google and you will see why there is controversy! The profit potential of day trading is perhaps one of the most debated (and misunderstood) topics on Wall Street. Countless internet scams have capitalized on this confusion by promising enormous returns in a short period. Meanwhile, the media continues to promote this type of trading as a get-rich-quick scheme that always works. The truth lies somewhere in the middle. There are those who engage in this type of trading without sufficient knowledge (or some even admittedly for a gambler's high!); however, there are day traders who are able to make a successful living.
Many professional money managers and financial advisors shy away from day trading, arguing that in most cases the reward does not justify the risk. They often cite that no day trader is world renown, whereas icons like Warren Buffett and Peter Lynch (see The Greatest Investors) are a testament to the success that can be attained by more traditional forms of investing. Conversely, those who do day trade insist there is profit to be made. They say the success rate is inherently lower as a result of the higher complexity and necessary risk of day trading, combined with all the related scams.
Overall, the street remains divided on the issue. At the very least they agree that day trading is not for everyone and involves significant risks. Moreover, it demands an in-depth understanding of how the markets work and various strategies for profiting in the short term.
By Justin Kuepper,
Some people may already know why i run this articles. Im a scalper and day trader by nature. If you check out my archive, you will know that i earn most of my money through scalping(meaning earn money within an hour) or day trading(within a day). You guys can also check out the investing forum at the right navigation bar - my link to see more of my daily winning trades.
An Introduction - Day Trading
Day trading is defined as the buying and selling of a security within a single trading day. This can occur in any marketplace but is most common in the foreign-exchange (forex) market and stock market. Typically, day traders are well educated and well funded. They utilize high amounts of leverage and short-term trading strategies to capitalize on small price movements in highly liquid stocks or currencies. Day traders serve two critical functions in the marketplace - they keep the markets running efficiently via arbitrage and they provide much of the markets' liquidity (especially in the stock market).
The Controversy
Search "day trading" on Google and you will see why there is controversy! The profit potential of day trading is perhaps one of the most debated (and misunderstood) topics on Wall Street. Countless internet scams have capitalized on this confusion by promising enormous returns in a short period. Meanwhile, the media continues to promote this type of trading as a get-rich-quick scheme that always works. The truth lies somewhere in the middle. There are those who engage in this type of trading without sufficient knowledge (or some even admittedly for a gambler's high!); however, there are day traders who are able to make a successful living.
Many professional money managers and financial advisors shy away from day trading, arguing that in most cases the reward does not justify the risk. They often cite that no day trader is world renown, whereas icons like Warren Buffett and Peter Lynch (see The Greatest Investors) are a testament to the success that can be attained by more traditional forms of investing. Conversely, those who do day trade insist there is profit to be made. They say the success rate is inherently lower as a result of the higher complexity and necessary risk of day trading, combined with all the related scams.
Overall, the street remains divided on the issue. At the very least they agree that day trading is not for everyone and involves significant risks. Moreover, it demands an in-depth understanding of how the markets work and various strategies for profiting in the short term.
By Justin Kuepper,
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