My day trading ignorance in 3... 2... 1...

[RKP3]

Hey everyone! I am 23 years old and I am 1 year into my first salary career with a chemical company and have no debt whatsoever. I budget my income fairly well and should have $7,000.00 saved up in the next couple months. I hate having my money sit in the bank and not investing it somewhere and let my money make more money.

Two months ago, I absolutely knew nothing about the stock market, literally nothing at all. However, beginning in January of 2016 I started paper trading stocks using $5,000.00 of "imaginary" money, an excel spreadsheet, and the Yahoo! interactive stock charts so I can monitor stock prices and opens/closes. I have real money to invest, but I wanted to get some kind of experience before possibly throwing my savings away. Throughout this experience, to my surprise I have really grown to enjoy day trading stocks and really think there is potential in this interest. So far, in the first 45 days of 2016 I have doubled my "imaginary" $5,000.00 and my balance sits at just over $10,000.00 with maybe 2 hours of effort per day.

I guess what brings me here to the forum is my skepticism that I am overlooking something that will sober my ideas to pursue day trading for a living. It seems too simple to buy 5,000 shares at $1.00, wait for the price to go up to $1.05 and sell the share for a profit of $230.00 ($250.00 less the $10 commission on the buy and sell).

Like I mentioned at the beginning of the post, despite the countless articles and YouTube videos and conversations with my friends that invest, I would consider myself in the very infant stages of understanding the stock market and don't plan on pursuing any real action until I feel comfortable. I am just having trouble researching the "catches" to day trading and was hoping someone could point me in the right direction because I know they have to exist somewhere. I have included below an example of my current day trading activity. Feel free to laugh and criticize if there are flaws in my simplicity of buying/selling. I understand I have a lot to learn and thanks to my pops (love him to death), I have think skin and definitely learn the best by criticism (constructive criticism).

Thanks in advance for the input and all of the time for your responses.

 

[MajorMagnuM]

Comms seem harsh

 

[RKP3]

Yea, I've heard that they range from $5 to $10 so figured I would calculate the most expensive to keep from any surprises if I choose to go that route.

 

[Splitlink]

Hey everyone! I am 23 years old and I am 1 year into my first salary career with a chemical company and have no debt whatsoever. I budget my income fairly well and should have $7,000.00 saved up in the next couple months. I hate having my money sit in the bank and not investing it somewhere and let my money make more money.

Two months ago, I absolutely knew nothing about the stock market, literally nothing at all. However, beginning in January of 2016 I started paper trading stocks using $5,000.00 of "imaginary" money, an excel spreadsheet, and the Yahoo! interactive stock charts so I can monitor stock prices and opens/closes. I have real money to invest, but I wanted to get some kind of experience before possibly throwing my savings away. Throughout this experience, to my surprise I have really grown to enjoy day trading stocks and really think there is potential in this interest. So far, in the first 45 days of 2016 I have doubled my "imaginary" $5,000.00 and my balance sits at just over $10,000.00 with maybe 2 hours of effort per day.

I guess what brings me here to the forum is my skepticism that I am overlooking something that will sober my ideas to pursue day trading for a living. It seems too simple to buy 5,000 shares at $1.00, wait for the price to go up to $1.05 and sell the share for a profit of $230.00 ($250.00 less the $10 commission on the buy and sell).

Like I mentioned at the beginning of the post, despite the countless articles and YouTube videos and conversations with my friends that invest, I would consider myself in the very infant stages of understanding the stock market and don't plan on pursuing any real action until I feel comfortable. I am just having trouble researching the "catches" to day trading and was hoping someone could point me in the right direction because I know they have to exist somewhere. I have included below an example of my current day trading activity. Feel free to laugh and criticize if there are flaws in my simplicity of buying/selling. I understand I have a lot to learn and thanks to my pops (love him to death), I have think skin and definitely learn the best by criticism (constructive criticism).

Thanks in advance for the input and all of the time for your responses.

Among others, get in touch with dbphoenix. He's well known on this site and has written so many threads that I don't know the best one for you to start. He'll put you right, though.

For Heaven's sake, put that money somewhere safe and trade with much less.

Good Luck.

 

[HolyGrail]

If scalping for the odd cent then the spread becomes very significant.

You show just one losing trade - what is your stop loss rule?

 

[RKP3]

Among others, get in touch with dbphoenix. He's well known on this site and has written so many threads that I don't know the best one for you to start. He'll put you right, though.

For Heaven's sake, put that money somewhere safe and trade with much less.

Good Luck.

Will do. Thanks for the guidance. LOL, that last piece of advice seems to be the most recurring! That and “How about you keep $1,000.00 and give me $4,000.00 and let me punch you in the throat. It will be less painful than day trading, plus you’ll make $1,000.00 more.”

If scalping for the odd cent then the spread becomes very significant.

You show just one losing trade - what is your stop loss rule?

Yea, typically only have one or two losing trades a day. I know paper trading comes with a lot more confidence and there’s going to be a completely new psychological factor when I’m using my hard earned money, but my plan is to stay humble and to not be “above” taking a $11.00 profit on a particular trade if it jumps $0.01 or $0.02. I think that has helped me minimize losing trades. As far as a specific rule for cutting my losses………*looks down and twiddles thumbs* that’s still in the works. 

 

[HolyGrail]

As for spread, looking at the three stocks in your list, they appear to have a 1 cent spread.

So if you buy at $1.86 you need it to move 1.5 cent in order for it to make you 1 cent. It only needs to move 0.5 cent to put you down 1 cent - so your system needs a significant edge.

Why I'm mentioning your stop loss rule is you need to have a risk:reward strategy. If you're looking to scalp just 1 cent then you appear to have a high risk to low reward system - so just a few losing trades will kill your account.

 

[Splitlink]

Will do. Thanks for the guidance. LOL, that last piece of advice seems to be the most recurring! That and “How about you keep $1,000.00 and give me $4,000.00 and let me punch you in the throat. It will be less painful than day trading, plus you’ll make $1,000.00 more.”

Remember this one fact. Once the money is gone you can't trade. Most traders go bust in the first weeks. The inclination is overconfidence and increasing stakes after a good win.

Where I live they say "Pies de plomo"! Feet of lead!