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Newbie seeks new Porsche via day trading. See what happens.


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Newbie seeks new Porsche via day trading. See what happens.

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  #21 (permalink)
Legendary Market Wizard
Georgia, US
 
Experience: None
Platform: SC
Broker: AMP+CQG
Trading: ES, HSI, Nikkei
 
josh's Avatar
 
Posts: 5,466 since Jan 2011
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Carrerain4 View Post
BOOM!!!! 10 percent gain!

1600 shares @ 1.0499

- Be careful trading $1 stocks, seriously. 1600 shares on a $2000 account in any stock is very risky.

- I would recommend a brokerage like IB for retail, if you are actively trading. You may not have the funds for an IB account but your commissions are a whopping .9% or so of your account for each trade. That is unsustainable, and your commissions alone at that rate will eat you alive. You mathematically cannot win with this fee structure if you are taking one or more trades per day. If your account grows it will be less as a percentage, but until that point it will be very difficult to grow.

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  #22 (permalink)
Melbourne FL, USA
 
 
Posts: 117 since Jul 2014
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I don't seek out low cost stocks, I seek out what's making good percentage gains whether they're a buck a share or 300 bucks a share. It's only the percentage I'm after, nothing else. I'm looking for a steady upward mover at a high rate of movement. And I hope to be in and out in minutes.

In this case I was in and out in 10 minutes and 9 seconds.

At 10 dollars per trade, I have to make 20 bucks to cover the fees. (I'm currently paying 7 each, which will go away after I've made 25 trades as the first 25 are discounted.)

If I have to make 20 bucks to cover my fees, then with an account of 2000 dollars to trade I have to pull in more than 1 percent to break even.

At 10000 dollars then break even happens at 0.2 percent yield.

I'm going to switch my brokerage over to Tradeking, and cut my commissions in half, in the near future. But not just yet.

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  #23 (permalink)
Birmingham UK
 
 
Posts: 336 since May 2014
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Carrerain4 View Post
I went all in with my available account. Which was a little under 1700 dollars. Cash, no margin.

For some time to come, I'll ONLY be playing "all in" as the account is so small. At this stage, the fees are the first
consideration for me to beat. The bigger I can play, the less those fees will matter.

So to keep fees to a minimum, I play with my whole account and buy and sell just once per trading day.

I will revise that strategy in the future as the account (hopefully) grows.


Sounds good, can't use Margin below 2K anyway, doubles your profit and your losses ofcourse, but as your here for profits I say do it ASAP

Other than finding another trade and making another 10% on the same day, I'd say no revision required.

I've never had the balls to jump in mid way, which is stupid cause it's the best way for sure, momentum is your friend.

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  #24 (permalink)
Melbourne FL, USA
 
 
Posts: 117 since Jul 2014
Thanks: 11 given, 49 received

Well, techncially I can't attempt a repeat in the same day due to SEC Rule T. The unsettled funds rule.

When you sell a security, the funds don't settle for three days. While you CAN buy another security with those unsettled funds, you can't SELL it until AFTER the funds have settled from the ORIGINAL sale. That would be "free riding" and a violation of the rules.

If you do, you violate rule T and get a 90 day cash only restriction on your account, so you can't use margin for 90 days.

But I do wonder, does that even matter on a cash account basis? Violating Rule T will restrict you to cash transactions, but does that restrict you from using unsettled funds to make those additional transactions?

Is there an additional level of penalty for continuing to violate Rule T, accepting that it keeps you from trading on margin?

In short, is it REALLY a bad thing to violate Rule T if you weren't intending to use margin anyway?

I'm not planning to experiment and find out. At this point in the game, I'm doing exactly what I'm comfortable
with and so far I can't express displeasure with the results.

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  #25 (permalink)
Birmingham UK
 
 
Posts: 336 since May 2014
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Carrerain4 View Post
Well, techncially I can't attempt a repeat in the same day due to SEC Rule T. The unsettled funds rule.

When you sell a security, the funds don't settle for three days. While you CAN buy another security with those unsettled funds, you can't SELL it until AFTER the funds have settled from the ORIGINAL sale. That would be "free riding" and a violation of the rules.

If you do, you violate rule T and get a 90 day cash only restriction on your account, so you can't use margin for 90 days.

But I do wonder, does that even matter on a cash account basis? Violating Rule T will restrict you to cash transactions, but does that restrict you from using unsettled funds to make those additional transactions?

Is there an additional level of penalty for continuing to violate Rule T, accepting that it keeps you from trading on margin?

In short, is it REALLY a bad thing to violate Rule T if you weren't intending to use margin anyway?

I'm not planning to experiment and find out. At this point in the game, I'm doing exactly what I'm comfortable
with and so far I can't express displeasure with the results.


Okay sorry, must of brought that 1 in since I the pattern day trading rule, moved me to Options then to Forex currently Index's!!

Should be okay on a strictly cash account but ? ask your broker I guess!

The lengths they go to, to stop us day trading and making money and make us into investor losers, is quite amazing isn't it

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  #26 (permalink)
Melbourne FL, USA
 
 
Posts: 117 since Jul 2014
Thanks: 11 given, 49 received

Yeah, these days, in the digital age, there isn't any RATIONAL reason to even have a settled funds rule. The electronic transaction should simply be made, then verified instantly, and then considered settled.

But then it would be just that much easier for someone to keep making trades until he's had enough, profit or loss.
No doubt that WOULD stir up the markets quite a bit and certainly add enormous volatility.


But now, your brokerage can hold your money in a potentially profitable money market account for three days while
funds settle, and when you add up the money in unsettled funds at a major brokerage, that represents a respectable sum of money to be made off of the money market. So why wouldn't the brokerages want to preserve the status quo?

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  #27 (permalink)
Philadelphia
 
Experience: None
Platform: corded black telephone
Trading: ticker tape
 
Posts: 2,893 since Apr 2012
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The pattern day trading rule is ridiculous and can be avoided if you trade from a broker outside the united states.

How can one open a futures account with a 1000 to day trade and it's any more safe than trading stocks with 10,000 only being able to make 3 trades a week?

It's funny how the world works. Seems like they need to get on the same page, maybe drink some coffee, and change the rules

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  #28 (permalink)
Melbourne FL, USA
 
 
Posts: 117 since Jul 2014
Thanks: 11 given, 49 received

The pattern day trading rule can be avoided by using multiple accounts. I think... Use account A on Monday and Thursday, use account B on Tuesday and Friday, and use account C on Wednesday.

At some point I hope to be doing exactly that. Multiple accounts with different brokerages, allowing me to trade every day.

I still intend to be playing "all in" with any given account on any given day I choose to trade. But at some point,
IF my fund grows the way it MIGHT, then I'll have to give consideration to the size of my trades relative to the
activity of that particular stock. It's fine to be a drop of water in the bucket, but I don't want to be the bowling
ball dropped into the bucket. I can't see that it would improve my chances of making a profit if I place trades
worth a significant percentage of the day's total trade value.

"Today's volume for ABC was 2 million shares traded, of which 1 million were traded by one particular idiot
day trader who got taken to the cleaners as a result of his stupidity. Film at eleven."

Never trade so big that you move the market on your own. If you're NOT a market maker, don't try to BE a market maker.


I hope that's an issue I have to contend with at some point.

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  #29 (permalink)
Birmingham UK
 
 
Posts: 336 since May 2014
Thanks: 7 given, 64 received

Me and a lot of other small retail people, 15 years back where making a lot of $$$'s, I was full time for 8months until the first rule basically ruined it, there rules to protect us are rules to stop us taking there money, I'm 99.999% sure of it.

Then ofcourse the big players with 25K with 400% intraday margin basically all handed over there money because of the margin and they went in big, blew it and walked away, where as retail, lost a little kept plugging at it, until they started to make a little on mass = A LOT!!

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  #30 (permalink)
Melbourne FL, USA
 
 
Posts: 117 since Jul 2014
Thanks: 11 given, 49 received


I have to take a business trip to Texas so I will not be trading in the coming week. Look for my next trade report on Friday, August 8th.

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