How much do you need to day trade?

[Pound foolish]

I would aim (ideally) to "make" £150 to £200 a day on average over a two week period.

Bearing in mind the £12.50 to buy and another £12.50 to sell (to realise gains) how much would you need to make a trade worthwhile over the short term? (three to four days)

Day gains are (now) at best 5% on average so to make £150 over £1000 ( 3 days) you need to invest over £1000 in one company. Risky, as rises are unlikely to be 5% over all three days and could reverse.

Do those of you who day trade speculate higher amounts per trade, or do you trade on the spread to reduce the investment capital cost?

 

[timsk]

Hi PF,
What you want or need to make is probably at odds with - and irrelevant to - the market. Look at what capital you've got, decide how much of it you're willing to risk per trade and then decide where to put your stops if the market goes against you. This will determine your position size. Then paper trade it - or use small amounts of real money. This will give you a more realistic idea of what you might make per day, as opposed to the £150 - £200 you want or need to make. In terms of costs, I doubt there's a day trader on the planet that pays £25.00 round trip on their trades. You've then got the spread to consider and, if you're trading UK equities, stamp duty on top of that. Each trade will have to move quite some way in the right direction just to break even. Once you have a reasonable number of completed trades, you can then determine your average daily P&L. Suppose you have £20k capital and your results indicate that you're making 1% - 1.e. £200 - per week. Your goal is 1% or £200 per day therefore, to achieve this, all things being equal, you're going to need to increase your capital base five fold to £100k. Alternatively, you can tweak your strategy so that it improves your return five fold. Of the two options, the former is probably achievable; the latter might not be!
Tim.

 

[Black Swan]

I would aim (ideally) to "make" £150 to £200 a day on average over a two week period.

Bearing in mind the £12.50 to buy and another £12.50 to sell (to realise gains) how much would you need to make a trade worthwhile over the short term? (three to four days)

Day gains are (now) at best 5% on average so to make £150 over £1000 ( 3 days) you need to invest over £1000 in one company. Risky, as rises are unlikely to be 5% over all three days and could reverse.

Do those of you who day trade speculate higher amounts per trade, or do you trade on the spread to reduce the investment capital cost?

I aim to make a grand a day.

 

[HaloTrader]

Make sure you really understand the truth of day-trading before you start rather than the fallacy...

I remember when i started i was like, big smart, brave me, its going up - I've seen the movies, BUY! BUY BUY! thats what its all about, presto, 2 minutes later i'm down £100 on a market i now know as the ftse100.

I thought it was all emotions and bravery and guts, its not.

 

[Pound foolish]

For a grand a day How much do you put on a trade?

What do you pay tfor the buy/sell round trip. I am that trader that pays £25 for this!

 

[rawrschach]

Why do you pay £25? Why not switch to something cheaper?

 

[megamuel]

You'll need a different broker for day trading

 

[HaloTrader]

£150-£200 a fortnight is all about your skill. Figure it out.
For example, if you average 1% a week, then you'd need a £10,000 account to hit that £200 target...
If you spreadbet you need less...
To day-trade stocks direct, you need to have enough to actually buy the shares obviously and if you are doing Futures then around £7,000 per contract you trade would be adviseable

 

[timsk]

For a grand a day How much do you put on a trade?
What do you pay tfor the buy/sell round trip. I am that trader that pays £25 for this!

P_F,
If you do 8 trades a day which is roughly what I averaged last year, then you'll be giving your broker £200 per day or around £50k p/a. That's before you consider spreads, slippage, sub's for data feeds and stamp duty if you trade U.K. equities . Do the maths and see where you stand. If you think you can still make a profit after all these expenses, then you're one poop hot trader and also totally nuts. No offense intended but, as Megamuel and rawrschachsays advise, why not switch to a cheaper broker? I was with IB and paid $1.00 R/T per 100 shares traded.

As for the first part of your question, I'm not entirely sure what you're asking? A 'grand a day' profit is largely a function of account size - as I explained in my earlier post. If Black Swan only has £10k in his account, then this is a 10% return which is awesome on the one hand but, on the other hand, it suggests he's risking more on each trade than most peeps here would advise. However, If he's got a million quid in his account, then the return is a relatively modest 0.1% and suggests his risk exposure is extremely conservative.
Tim.

 

[megamuel]

1. How much capital do you have to trade with? £500? £1000? £5000? £25,000?
2. As a guide you should only risk about 2% of your capital per trade. So what is 2% of your capital?
3. If 2% of your capital is £25 or less then your less then you are already going to be at your maximum risk level as soon as you open a trade. Never mind with stop losses. So if your trading capital is less that £1250 you are screwed with your current broker.

Even if you have over £1250 to trade with you can still get a better deal than £12 to buy and £12 to sell. I am guessing that is with a bank like halifax or barclays? Have a look at IB (Interactive Brokers) a lot of people use them. Look at their minimum account limits.

If you wanted to make £200 per day in one trade I'd say you need at least £5000 to trade with. I.e. risk 2% which is £100 and have a 2:1 reward:risk ratio so hoping (not the correct term there!) for double your risk per trade which is £200. Unfortunately its not that simple. You've got to consider that you are going to have loosing trades and some day trading brokers have minimum account levels of $25,000.

 

[HaloTrader]

1. How much capital do you have to trade with? £500? £1000? £5000? £25,000?
2. As a guide you should only risk about 2% of your capital per trade. So what is 2% of your capital?
3. If 2% of your capital is £25 or less then your less then you are already going to be at your maximum risk level as soon as you open a trade. Never mind with stop losses. So if your trading capital is less that £1250 you are screwed with your current broker.

Even if you have over £1250 to trade with you can still get a better deal than £12 to buy and £12 to sell. I am guessing that is with a bank like halifax or barclays? Have a look at IB (Interactive Brokers) a lot of people use them. Look at their minimum account limits.

If you wanted to make £200 per day in one trade I'd say you need at least £5000 to trade with. I.e. risk 2% which is £100 and have a 2:1 reward:risk ratio so hoping (not the correct term there!) for double your risk per trade which is £200. Unfortunately its not that simple. You've got to consider that you are going to have loosing trades and some day trading brokers have minimum account levels of $25,000.

Really? i wasn't aware some brokers had minimum account level of $25k - Which ones are they if you know?

 

[timsk]

You've got to consider that you are going to have loosing trades and some day trading brokers have minimum account levels of $25,000.

ALL of them do if they are registered with the Securities & Exchange Commission (SEC) and you're a pattern day trader (PDT) trading U.S. equites.

 

[megamuel]

Thanks Timsk

 

[Black Swan]

For a grand a day How much do you put on a trade?

What do you pay tfor the buy/sell round trip. I am that trader that pays £25 for this!

cost of spread (including stop) 5/6 pips, 15 winning trades per day; average of 30-35 pips profit per trade. 5 losing trades at 25 pip loss per trade. Simples.

 

[new_trader]

I would aim (ideally) to "make" £150 to £200 a day on average over a two week period.

Bearing in mind the £12.50 to buy and another £12.50 to sell (to realise gains) how much would you need to make a trade worthwhile over the short term? (three to four days)

Day gains are (now) at best 5% on average so to make £150 over £1000 ( 3 days) you need to invest over £1000 in one company. Risky, as rises are unlikely to be 5% over all three days and could reverse.

Do those of you who day trade speculate higher amounts per trade, or do you trade on the spread to reduce the investment capital cost?

You should not aim for a daily monetary amount when trading as this is not conducive to profitable trading. There should be no attachment to money at all, none! You should aim to enter a trade when it is the right thing to do and let your trade run as long as possible when you are right and cut your losses as quickly as possible when you are wrong. You should aim to cover costs as quickly as possible on every trade.

 

[Pound foolish]

You should not aim for a daily monetary amount when trading as this is not conducive to profitable trading. There should be no attachment to money at all, none! You should aim to enter a trade when it is the right thing to do and let your trade run as long as possible when you are right and cut your losses as quickly as possible when you are wrong. You should aim to cover costs as quickly as possible on every trade.

Makes sense. BUT......................

No one knows what the price is going to do at any given moment. It could continue to go up and up, it could fall and then recover to close on a new high or continue to fall, gain a bit and fall some more........

I like to select a buy price, wait for that price in a fall, I then buy MORE if it falls further and hold on for a gain down the line. So far this has worked a treat as my original buy prices are well behind the current prices.

Day trading is different and I feel a target is needed. It should give discipline to not be greedy, not to hold out for an even higher price.

 

[Pound foolish]

Really? i wasn't aware some brokers had minimum account level of $25k - Which ones are they if you know?

Capital to trade with. Currently £10,000 but I bung a grand in when I have it and something looks an opportunity.

I trade with Self Trade. £12.50 buy £12.50 to sell. Whatever the size of trade.

I have had a look at Interactive brokers. Have I got the trade fees right?
Minimum $100 value of trade. Cost in fees $0.01 per share. So if you buy 500 shares at $150 the deal costs just $5? less than £3 Sterling! I can manage the minimum account balance maybe.

Not worth it unless I make trading full time though.

 

[porph]

Makes sense. BUT......................

No one knows what the price is going to do at any given moment. It could continue to go up and up, it could fall and then recover to close on a new high or continue to fall, gain a bit and fall some more........

I like to select a buy price, wait for that price in a fall, I then buy MORE if it falls further and hold on for a gain down the line. So far this has worked a treat as my original buy prices are well behind the current prices.

Day trading is different and I feel a target is needed. It should give discipline to not be greedy, not to hold out for an even higher price.

Your methods will end in paaaaain.

 

[foredog]

Wouldn't have wored with

Woolworths
Cattles
RBS
LLoyds
Taylor Wimpey
Woseley
Marconi

Markets have had a rally for about 3 or 4 months so if you're long you should be OK but if you'd bought last August you'd probably be DOWN.

 

[TAjammy]

Makes sense. BUT......................

No one knows what the price is going to do at any given moment. It could continue to go up and up, it could fall and then recover to close on a new high or continue to fall, gain a bit and fall some more........

I like to select a buy price, wait for that price in a fall, I then buy MORE if it falls further and hold on for a gain down the line. So far this has worked a treat as my original buy prices are well behind the current prices.

Day trading is different and I feel a target is needed. It should give discipline to not be greedy, not to hold out for an even higher price.

o sweet jesus:-0