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Community Voice
Community Member, irwinski blogs, and shares the lessons he has learned in a Journey into Swing Trading
Here's an excerpt:
What am I doing:
I was asked about my experience in trading and I figured I would write about what I am doing.
Back in the early 90's I decided I wanted to start trading. I was excited about the prospect of trading. I got interested in this from my 403b and watching it grow or not grow. I was asked to be a part of the retirement committee for our hospital that I worked for. That just got me going some more. I really like the stocks and am not a mutual fund type person. So I let the 403b run and put my efforts on stocks. The account I opened up was with a little known brokerage firm that would allow me to start with $500 or $1000. I don't remember. I must have traded this for about a year. I remember having to write down all my trades for the IRS that year. I wasn't getting anywhere so I decided to stop.
Here we are in 2010 and I lost my job. I have always wanted to get back into trading. I know I can do this. During the off time of trading I was still on the retirement committee with the hospital and was managing my portfolio of funds by moving allocations and moneys where I believed they would grow. I did well and when people one year talked about $30,000+ losses in their account mine was only down $3000. I watched and moved and kept an eye on it.
I decided when the job was lost that there were two things I wanted to accomplish in my semi retirement. Not a lot of jobs for someone at the age of 54. I wanted to learn stock trading and get better at poker...Read the complete blog.
Discussion Spotlight
If I'm new to investing and I don't have "a ton" of money I shouldn't "day trade" should I?
Click here to join the conversation.
The reason I ask this is because it seems like its really complicated and there are a ton of extra regulations to make trades shorter than, I think, 90 days. Am I completely erroneous in this thinking or is there some validity to it?
It almost seems like day trading could be a sort of "fool's gold" for an individual who is pretty new to everything. By this I mean I think a lot of new traders have visions that would rival some of the worst "get rich quick" schemes. Correct me if I am wrong, but this is the reason for the popularity of "penny stocks" and all of those stupid spam emails advertising them, right?
The reason I want to know about day trading is because I have a few long term investments that I plan on keeping long term. But, in the mean time, I was thinking of maybe toiling around with some stocks in my free time-see if I can make a few extra bucks here and there while my long term objectives are doing their work. Is this something I should leave to experienced traders (maybe even some time down the road I become an "experienced" trader) or is it something worth my while to at least do a little more research on?
Thanks,
Ed
Ed...Not sure where you got a 90 day thing?
However, day trading is not something you just fool around with in your free time...I'd suggest you pass on the idea.
Best, Doug
In a very small nutshell, "day trading" refers to opening and closing the same position on the SAME DAY. Some people think any active trading is day trading, but it's not. To day trade regularly, you need to maintain at least $25k in your margin account. If you have a cash account, you can day trade all you like, but then settlement issues will likely get in the way and you may incur freeriding violations (which are punishable by death, BTW). ;-)
I'm in the same boat man..i'm just buying really cheap a** stocks for very little profit jus for some account dough. Come october I'll be ready to go full force
In day trading, you need to be able and be comfortable and be consistently pretty accurate in making each of those decisions. You will need to be able to identify and to make those decisions far faster than it would take you to write down those questions and to reason through and write out defensible answers for each one.
One way you get to that point is to do a lot of paper trading. I.e., identifying the stock or etf to trade, then on the intraday charts of your choice, honestly identifying each opening as it starts to occur, noting the price, then tracking the price as it changes (sometimes almost minute by minute), tracking what you are doing insofaras your stop, and identifying when to exit. Only you will know how honest and accurate your trading log entries are. The more accurate and honest you are with yourself, the more you can learn. Further, you can learn without damage to your capital (one of the most precious resources which you have).
People who are trained to fight for real do not just walk down to the street corner looking for trouble and expect to come away with no damage, not the wiser ones anyhow. People who are trained to fight undergo a lot of intense training -- a lot of concentrated building and ingraining of new habits.
Will
edsword: You got a lot of sage advice. I hope you heed the warnings. Would you jump in the deep end of the pool without first learning how to swim? Day trading is definitely the deep end of the pool, IMO. OK...I'll say it again. (My apologies to those who have read it too many times)
If you want to make a small fortune in the stock market, all you must do is first start off with a large fortune and then make a lot of trades.
IMHO, learn how to financial swim first before jumping in the deep end. Otherwise, you'll probably drown financially.