Day trading the stock market with a full time job? ...or Swing trade? Please help!

This is a discussion on Day trading the stock market with a full time job? ...or Swing trade? Please help! within the First Steps forums, part of the Reception category; Originally Posted by Dr. Toad I am actually testing a pseudo day trade strategy now though. I say pseudo since ...

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Old Aug 17, 2015, 7:50pm   #16
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Originally Posted by Dr. Toad View Post
I am actually testing a pseudo day trade strategy now though. I say pseudo since my understanding is that for the most part day traders need to watch price action closely during the trade, and I have developed my system so I don't so much need to monitor. I have serious doubts as to if this will be successful, but I really don't see many ways that day trading would be practical for someone with a full time job other than something like it so I would be interested if other have found ways to do this as well.
Sounds interesting, keep me posted on how it goes

I understand that many people trade only the morning action, but it looks like a few people do seem to be concentrating on the afternoon too. You mentioned that you have similar working hours to me, did you considered trading the afternoon using day trading strategies? I know that one strategy is to short the afternoon fade, whereby the price enters a trading range, fails multiple times to break out to a new high before eventually breaking down below the morning low, with an optional test of resistance before free-falling! TBH this sounds risky, so you would definitely want to have one eye on the charts and the other on level 2
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Old Aug 17, 2015, 8:02pm   #17
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hi panvulcon,
There are plenty of day trading opportunities to be had in the final two hour session of the day, i.e. 7.00 - 9.00pm U.K. time. I did this for quite a few years when I started out trading U.S. equities.
Tim.
I guess there are pro's & con's to each session.

Were there any specific strategies that helped you trade the afternoon session?
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Old Aug 17, 2015, 8:23pm   #18
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Hi Panvulcon, I am a part time day trader of approx 4.5 years.
I am very glad to have kept my freelance business going along side for all this time.

Not only is this game highly addictive (if you let it in too much), but actually once you become accustomed to the various trading scenarios & price behavior (yadda yadda) & go through a few seasons, then come to a point where you can actually read what has & more importantly IS unfolding in front of you on the screen (without a gazillion lines & flashing do-da's) then you will find that trading can be very boring indeed, especially with low volume (i.e typically summer/hols/US bank hols etc).

I would advise it is very important to become familiar with speed of flow if you enter the day trading arena. It is all good learning the various ins & outs of the game, but different days present their own test of this speed of flow (or volume). You sound like you've done some homework, so I imagine you will know where I'm coming from.

Anyway, the upshot of my post was just to say keeping my fingers firmly in another pie was the best thing for my trading, because I don't rely on it to pay my way, therefore I'm not all sweaty palmed & eyes bulging (though I've done plenty of that over the time) & I have a completely different focus away from this time consuming vocation.

Day trading is very tricky.....get caught in a trap, trade tired, make the mistake of trading in slow grinding churn, all very real situations that can empty your coffers.

Then there are the days when the market is ready, the day you are also ready, perfect combination.

Good luck.
Thank's you for your advice Tokyojoe.

Being self employed must be great, so much flexibility - although i bet its difficult deciding between seeing a trade out vs actually doing your day job.

I have spent a good while looking at small caps and really appreciate what a high spread and illiquid mean. The only stocks that i plan to keep track of, are the ones in play on high volume which means scanning stocks, making watch lists and doing homework before entering the market; as opposed to having a select few stocks that i know like the back of my hand.
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Old Aug 17, 2015, 8:27pm   #19
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I think you will find that's how Mr Charts started before he went full-time. I like the US markets on a personal basis because they open late in the UK day and I'm not always fully awake in the morning. But for someone holding down a day job the US markets are well timed for trading after you get home – say 7 to 9 pm by the time you've got your act together. But far be it for me to tell you how Mr Charts trades. You will see in his main threat that he is always prepared to answer sensible polite questions. I'm sure you would also find it useful to read his interview with T2W and various other pieces he has written over the years. He has given a lot of information based on personal experience that I have found extremely helpful. I'm not a day trader, though I'm warming to the idea: so I'm totally unqualified to advise in that area.
Good call, I will definitely be reading up on Mr. Charts - i see he is from Leeds UK which is near where i grew up - small world!
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Old Aug 17, 2015, 9:45pm   #20
 
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Thank's you for your advice Tokyojoe.

Being self employed must be great, so much flexibility - although i bet its difficult deciding between seeing a trade out vs actually doing your day job.

I have spent a good while looking at small caps and really appreciate what a high spread and illiquid mean. The only stocks that i plan to keep track of, are the ones in play on high volume which means scanning stocks, making watch lists and doing homework before entering the market; as opposed to having a select few stocks that i know like the back of my hand.
Hi Pan, being self employed is like everything else in life, it's yin yang, I've been self employed since my early 20's, it's one of the reasons I got into this trading milaky (as well as having a few mates on "the other side"....who told me not to do it)

I am able to concentrate 100% when in the market on any day I'm in (market TF is usually 7am-11am, then 1pm-4pm), but if I don't make my money by 11am, or worse I'm really off kilter & taken a slap, I find it's not a good mindset for the afternoon session.

I have a very hard & fast rule re my time in the market, it's a habit I'm glad to have gotten into early when I started in 2011.

I have whittled my way down to trading just the Dax for the past year or so.
I used to be all over the show looking for trade ops here, trade ops there, watch lists etc, but finally settling to trade the Dax, mainly due to it's volume, European time frame etc.

It's not so much knowing it like the back of my hand, it's more the fact I do not want to spend too much more of my time in the markets than I need to, I've spent so much time on it already that I find it easy to see what I need to do, it's more now see monkey..do monkey

As you are working full time you are right in thinking the the US is good for you to track in real time, although the US volume often drops off after the European close (generalizing of course) you seem to have decent finish times in your job, real time exposure with real money on the line was the most important learning curve for me.

For me nowadays....

...Market moving, lots of traction....I'm in

...market dead or creepy....I'm o'ot
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Old Aug 18, 2015, 12:00am   #21
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You mentioned that you have similar working hours to me, did you consider trading the afternoon using day trading strategies?
I wish I had similar hours to you, but actually I am in the US so really for me any day trading of the US market quite literally has to take place during my work hours. This is why I have tried to develop a system that minimizes the need for me to babysit. My work schedule is flexible in that I can work pretty much any hours I want as long as I put in 40 hours a week and am there during the core hours 4 of the days (9-4).


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Originally Posted by panvulcon View Post
I know that one strategy is to short the afternoon fade, whereby the price enters a trading range, fails multiple times to break out to a new high before eventually breaking down below the morning low, with an optional test of resistance before free-falling! TBH this sounds risky, so you would definitely want to have one eye on the charts and the other on level 2
You got me on that one...I am just trading what I see on my super fancy yahoo finance charts and the bid/ask spread showing in my account when I am nearing a buy or sell point. All on my handy dandy smart phone...really far from ideal, but where there is a will, there is a way. It helps that I know my exact buy in and sell points going into the day though, and after the first 5 minutes I am only really tracking one or two stocks until I buy in and just let it ride a while.

I have looked at level 2 quotes before, but quite often you see large bids or sells that are just canceled immediately...or sometimes they aren't...I really couldn't find much of a pattern with them when I looked, so I abandoned them for the time being. Also, they would be quite difficult to manage on a 2"x3" screen.
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Old Aug 18, 2015, 5:27pm   #22
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. . . Were there any specific strategies that helped you trade the afternoon session?
Hi panvulcon,
Just so we don't get our wires crossed, the flat time to avoid is the U.S. lunchtime session (i.e. 5.00 - 7.00pm U.K. time). So, by 'afternoon session' - are you referring to the U.S. afternoon (i.e. 7.00 - 9.00pm U.K. time) or are you referring to the U.K. afternoon (i.e. 9.30 - 12.00noon U.S. time)?
Tim.
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Old Aug 18, 2015, 5:46pm   #23
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Hi panvulcon,
Just so we don't get our wires crossed, the flat time to avoid is the U.S. lunchtime session (i.e. 5.00 - 7.00pm U.K. time). So, by 'afternoon session' - are you referring to the U.S. afternoon (i.e. 7.00 - 9.00pm U.K. time) or are you referring to the U.K. afternoon (i.e. 9.30 - 12.00noon U.S. time)?
Tim.
I'm referring to the U.S. Afternoon so 7:00pm - 9:00pm UK time.
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Old Aug 18, 2015, 7:06pm   #24
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I'm referring to the U.S. Afternoon so 7:00pm - 9:00pm UK time.
Hi panvulcon,
Okay, glad we're clear!

It's about 10 years ago now, so the exact details are a little hazy. However, the basic strategy can best be described as Reversion to Mean. I focused on a basket of about 20 liquid stocks with large intra-day volumes, upwards of a million shares I think. Or was it two, I can't recall. So, stocks like Amazon, Amgen, Starbucks and Yahoo etc. One criteria was an average daily high to low move of $2.00 or more. I then stuck on a 89 period moving average on a 5 minute chart. At the time, great significance was attached to Fib' numbers and there were those who swore blind that these made all the difference! Total balderdash of course, but I was inexperienced and impressionable in those days. So, any MA in the region of say, 75 - 100 would probably have sufficed - but I used the 'magic' 89. Besides the daily volume and minimum $2.00 movement, there was another key criteria that I kept a daily check on. That is that each stock printed to within $0.10 cents of the 89 MA at least once every day. If this happened before 3.30pm U.K. time - that could be ignored - the idea being that the stock and the MA would meet again later on in the day. I updated records by hand on a weekly basis and, any stock that failed to achieve a 90% success rate in this simple task was ousted unceremoniously from the basket and replaced with a better performer. The one complicating factor was that I ignored heavy trending days - but I can't remember how I defined those at the time I'm afraid. So, to the trades . . .

When I fired up my PC around 7.00pm, I would go through the basket of stocks and look for the ones that had moved 70% or more of their daily range but hadn't yet printed to within $0.10 cents of the 89 MA post. It was then a case of taking my cue from the Dow for a reversal in the direction of the MA. (Short those above it, long those beneath it.) The MA was the target. I forget details like stops and exits, but it would have been something very simple like a breach of the previous 5 min candle low (for a long trade). I probably had a 10 period EMA on the chart as well and may well have exited if price closed below the EMA (for a long position).

That's pretty much all there is to it. Basic stuff that worked well until I got cocky and thought I knew it all and had my derriere royally handed to me on a plate!

Tim.
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Thanks! The following members like this post: tomorton , panvulcon
Old Sep 13, 2015, 5:22pm   #25
 
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For those that are interested, my initial budget\capital is a very modest $3000 BUT this is topped up monthly with around $800 of completely, will not cry if i lose it all, disposable income.

Sorry for the long post and thanks for reading.

Andy
Enough trading capital, a risk management system and a sound trading idea with an edge is key. Make sure you have these 3 important ingredients. Good luck.
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Old Sep 22, 2015, 1:12am   #26
 
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My personal experience was to start out daytrading, where I lost very small amounts of money very consistently. This was partly due to poor methodology, but also because it is very difficult to overcome fixed costs like commission and spread. I then began dabbling in swing trading and started making money. I then switched to EOD futures trading exclusively, and generated a reasonable return over a 12 month period. At the end of this I decided I was hugely over-leveraged, and that my career was disruptive even to EOD trading. I now re-balance positions once monthly!

For some people daytrading works, but I would guess that for the majority swing trading is the best way to start.

Moving on to your question about 'routine' . . .

I only used end of day data as a swing trader (although I'm not conceptually opposed to the use of intraday data - I'd look for some way to aggregate it to treat as an end of day input - for example you might take the average range of all 5 minute bars throughout the day and use this as part of your EOD analysis).

I had all the conditions that needed to be met to initiate a position in a radar screen, so I'd start by bringing this up. Most of the time there would be nothing to do and my day's work was over within half a minute. If I needed to initiate a new position then I would pull a chart for that market to ensure that the conditions continued to be met into the close. I would execute using a 'market on close' order with my broker.

Hope that helps!
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Old Sep 22, 2015, 1:26am   #27
 
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Yes, you are right. This can be a problem. Finding the right time frame for day trading could fix this situation. For day trading, it is best to trade 1 o 2 times a day finding the setups with the best odds.

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My personal experience was to start out daytrading, where I lost very small amounts of money very consistently. This was partly due to poor methodology, but also because it is very difficult to overcome fixed costs like commission and spread.
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Old Sep 23, 2015, 5:24pm   #28
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Daytrading requires a lot of capital that you would have to divide in portions. Try Swing trading first, imo.
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