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day trading really worth it?

post #1 of 44
7/10/10 at 4:25pm
Thread Starter 
Before I got into the stock market I heard successful day traders can make 500$ a day and more. So I started reading a lot about it, and this leads me to the following questions/statements which would be nice if someone answered or criticized as best they could.

Statement: I concluded that day trading cannot really be done with a full time job since the market opens and closes while you're at work so day trading HAS to be your primary income.

Question: The swing trader which I gathered trades over the span of days or weeks even seems to follow almost the same strategy as the day trader except looking at charts over a longer period of time and using very similar indicators although some may be different. This method seems to be the method which would be preferable to someone with a full time job. But is this the method that would lead you to a higher chance of success?

Question: Apparently recently I found out that the day trader needs to have at least $25,000 in his account so for someone thats still in college with almost no income, that is completely unrealistic. So the best approach would most likely be to start low and make those $25,000. But once you reach that point, is there an advantage to changing your strategy to day trading rather than swing trading?

Overall, there just seems to be a lot more disadvantages to day traders than there are advantages. If anyone could clear up what I'm asking/stating I would love it. Thanks in advance!
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post #2 of 44
7/10/10 at 4:33pm
There is not right or wrong answer for everyone, just for you. If you don't have the time to try and become a daytrader, then it's not the best method for you. Both types of traders offer different benefits and drawbacks. If you try to force a daytrader approach on yourself and you don't have the right mindset or lifestyle to accommodate it, you're going to fail, but the same can be said for swing trading. They are all legit options and either way it's going to take a lot of work, time, and effort, so pick the one that fits you. I look at learning trading as going through college. It takes you years of education before you finally get to where you want to be, so if you're already in college then look at it as doubling your duties. You don't have to dedicate as much time to it daily, but it'll just take you longer to get there.
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post #3 of 44
7/10/10 at 5:16pm
Thread Starter 
Thanks, I realize that both depend on the type of person you are and what suits your lifestyle but what about the techniques used for both, how much do they differ?
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post #4 of 44
7/10/10 at 7:35pm
I work the evening shift(40hrs-week) and I swing trade. I have been working on TA since December. I look at charts every day, I have read 10 books on TA, and other books on fundamentals, financial statements, economics, commodities, politics(I like to read), I also cruise the internet trying to find people like I see here at HSM who are kind enough to help out with my random questions, and I watch the news/media. The point is that I do all this and I am barely profitable, but I am getting more profitable. I see the future as bright, because I keep getting better. So I guess I am just reiterating what had already been said, but this is my way of saying it.



Edit: But as far as intra-day is concerned I have not traded, but I do watch when I can. I just can't help in that area.
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post #5 of 44
7/11/10 at 10:43am
Quote:
Question: The swing trader which I gathered trades over the span of days or weeks even seems to follow almost the same strategy as the day trader except looking at charts over a longer period of time and using very similar indicators although some may be different. This method seems to be the method which would be preferable to someone with a full time job. But is this the method that would lead you to a higher chance of success?
When you swing trade you basically are looking for (for example) a 10% gain on a stock. When you daytrade you are looking for 10 times a 1% gain. Daytrading you use tighter stops than when you swing trade. Both can be very profitable, and you can lose your ass on both trading principles as well. I prefer daytrading because i can sit and watch, i can act as soon as i see weakness etc.

Quote:
Question: Apparently recently I found out that the day trader needs to have at least $25,000 in his account so for someone thats still in college with almost no income, that is completely unrealistic. So the best approach would most likely be to start low and make those $25,000. But once you reach that point, is there an advantage to changing your strategy to day trading rather than swing trading?
If you can manage to start with $1000 and go to $25000 one day with swing trading, why should you change to daytrading? If you can manage such gain with swing trading i would go on with swing trading.

Don't forget you can daytrade in a margin account as well (3 times in 5 days period), now you only need $2000 (depends on broker though). You also can daytrade in a cash account with options.

I sometimes swing trade and sometimes daytrade, but i always sit and watch the stocks. But that's kind of my risk appetite, because i don't really like to use stop limits.
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post #6 of 44
7/11/10 at 7:27pm
Thread Starter 
Quote:
Originally Posted by Mitzter View Post
When you swing trade you basically are looking for (for example) a 10% gain on a stock. When you daytrade you are looking for 10 times a 1% gain. Daytrading you use tighter stops than when you swing trade. Both can be very profitable, and you can lose your ass on both trading principles as well. I prefer daytrading because i can sit and watch, i can act as soon as i see weakness etc.



If you can manage to start with $1000 and go to $25000 one day with swing trading, why should you change to daytrading? If you can manage such gain with swing trading i would go on with swing trading.

Don't forget you can daytrade in a margin account as well (3 times in 5 days period), now you only need $2000 (depends on broker though). You also can daytrade in a cash account with options.

I sometimes swing trade and sometimes daytrade, but i always sit and watch the stocks. But that's kind of my risk appetite, because i don't really like to use stop limits.
Yeah thats some good points.

Im curious what you mean by you can trade on only $2000 on a margin account?
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post #7 of 44
7/11/10 at 7:35pm
Quote:
Originally Posted by nickkov89 View Post
Yeah thats some good points.

Im curious what you mean by you can trade on only $2000 on a margin account?
He meant there is normally a $2k account minimum to open a margin account.
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post #8 of 44
7/11/10 at 10:46pm
Mitzer said it best (with the 1 10% or 10 1% trades). The benefits to being a swing trader is that you don't have to be by your computer all day and the benefits of being a daytrader is you can make more because you are not tied into the same stock for a few days.

Which one fits you is based on your lifestyle and also your attitude. As counterintuitive as it sounds I have found through other trader friends the more greedy the personality the better they are with swing trading over daytrading. They often hold too long or force trades when daytrading. A couple of my friends do very well swing trading. I like to maximize my money when I trade so I daytrade therefore I can afford to take more days off a year.
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post #9 of 44
7/12/10 at 1:13am
Thread Starter 
So I'm trying to get this straight, everybody on this forum that day trades actually has at least $25k in their account to just mess around with? It sounds like a lot of people on these forums are pretty rich ;p
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post #10 of 44
7/12/10 at 1:21am
Quote:
Originally Posted by nickkov89 View Post
So I'm trying to get this straight, everybody on this forum that day trades actually has at least $25k in their account to just mess around with? It sounds like a lot of people on these forums are pretty rich ;p
I felt the same way when I started out here. I have a day job and have the ability to trade at work because I usually just execute trades and research at night.

I started swing trading options because I did bad trading low cap stocks, and pennies, but did really well paper trading options.
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post #11 of 44
7/12/10 at 1:24am
$25k is nothing. You need about $200k startup to make a living at day trading unless you're a heck alot better than average. Go lose $50k in the market, then you are ready to get started toward success.

I keep a full time job and swing trade.. it's nice to know that there will be income every month whether the markets are kind or unforgiving as they can sometimes be.

Once I have a baby, the day trade side may appeal more to me so that I can spend time at home with the kid. But seriously, I'll be starting with 200k.
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post #12 of 44
7/12/10 at 2:58am
Thread Starter 
Quote:
Originally Posted by teamrider View Post
$25k is nothing. You need about $200k startup to make a living at day trading unless you're a heck alot better than average. Go lose $50k in the market, then you are ready to get started toward success.

I keep a full time job and swing trade.. it's nice to know that there will be income every month whether the markets are kind or unforgiving as they can sometimes be.

Once I have a baby, the day trade side may appeal more to me so that I can spend time at home with the kid. But seriously, I'll be starting with 200k.
Somehow I feel the 200k may apply to only like 1% of people beginning trading, I don't think anybody has that kind of money lying around. But then again I'm not looking to do it as an alternative to a career.
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post #13 of 44
7/12/10 at 3:08am
Quote:
Originally Posted by nickkov89 View Post
Somehow I feel the 200k may apply to only like 1% of people beginning trading, I don't think anybody has that kind of money lying around. But then again I'm not looking to do it as an alternative to a career.
I have to question this, because it was clearly said before that you need to be good enough and patient enough to work up to that. I do hope to one day have accumulated 200k. I view this as workers money. Not something that was given to you and you just start. Your comment sounds like some rich kid who was given money to play with. That is so far from what the experienced people have said to you. It seems that it has been stated clearly that the time between not knowing anything about trading and playing with 200k or more should be spent learning the market and making what little money you can to accomplish your goals of 200k or whatever the money goal is.

I would love for some more experienced people here to give some input.
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post #14 of 44
7/12/10 at 6:50am
Quote:
Originally Posted by nickkov89 View Post
So I'm trying to get this straight, everybody on this forum that day trades actually has at least $25k in their account to just mess around with? It sounds like a lot of people on these forums are pretty rich ;p
No, most people on HSM have margin accounts with an account value between probably $2k and $10k. Nothing special.
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post #15 of 44
7/12/10 at 6:51am
Quote:
Originally Posted by teamrider View Post
$25k is nothing. You need about $200k startup to make a living at day trading unless you're a heck alot better than average. Go lose $50k in the market, then you are ready to get started toward success.

I keep a full time job and swing trade.. it's nice to know that there will be income every month whether the markets are kind or unforgiving as they can sometimes be.

Once I have a baby, the day trade side may appeal more to me so that I can spend time at home with the kid. But seriously, I'll be starting with 200k.
This is ridiculous, and by the way he isn't talking about making a living out of it.
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post #16 of 44
7/12/10 at 10:40pm


All I know is what the day traders I know have taught me. I have three relatives who are full time traders - they start the day with $200k or more. One actually took a second mortgage after getting laid off his engineering job to have the capital. He now is earning more than at his previous six figure job. I mean if you're only trying to make $12 to 25 grand a year, there are a lot easier ways to do it than risking your cash in the stock market on a daily basis. Go mow lawns, you have a better chance of getting paid and no risk. If you want to make money, like professional money, 25k ain't dirt to work with and my statement stands. These guys can buy 1000 shares of AAPL on a run and hold it for three to five minutes a few times before 10:30 am and make more than I make all week at work. Then they spend the rest of the day with their kids. That's day trading, not to be confused with toying with the market! If you had bought 1k shares of BP this morning at open and sold at a dollar's profit ($1000 profit) , there is what $35k could do for you. But you might lose $2000 tomorrow betting wrong and getting stuck in it lower with no bounce. MUST HAVE CAPITAL.

Yes, day trading is worth it.

I made $15k swing trading last year, started with two grand. My taxes showed $300K income from trading before losses and commissions. I have gotten a lot better and have earned a little more this year, with 90% fewer trades. But the year ain't over yet.
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post #17 of 44
7/12/10 at 10:49pm
Quote:
Originally Posted by Mitzter View Post
No, most people on HSM have margin accounts with an account value between probably $2k and $10k. Nothing special.
And you assume this how? There are some serious pros here who know their stuff and I think that you underestimate.. go read the LVS thread for a dose of reality.
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post #18 of 44
7/12/10 at 11:06pm
This Daytrading really worth it? Well look on Forbes and see how many of those millionaires/billionaires got where they are today by daytrading.

"A Fool And Their Money Are Soon Parted"

Take that money and go buy a income apartment building and just enjoy life
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post #19 of 44
7/12/10 at 11:38pm
Originally Posted by Mitzter
No, most people on HSM have margin accounts with an account value between probably $2k and $10k. Nothing special

Really? How do most come here day after day with such a small portfolio? or are people doing this from work,after,etc. Seems like most are here during the day like they do it for a living. only reason i ask
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post #20 of 44
7/13/10 at 12:30am
Quote:
Originally Posted by teamrider View Post
And you assume this how? There are some serious pros here who know their stuff and I think that you underestimate.. go read the LVS thread for a dose of reality.
He said most, and he is probably right. There are a few guys who seem to have sizable accounts 1mil plus according to their posts but majority of the members have small accounts.


Quote:
Originally Posted by M8kin_Moves View Post
Originally Posted by Mitzter
No, most people on HSM have margin accounts with an account value between probably $2k and $10k. Nothing special

Really? How do most come here day after day with such a small portfolio? or are people doing this from work,after,etc. Seems like most are here during the day like they do it for a living. only reason i ask
Some do it between class or have jobs that they can trade around (work night shifts).
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