Help a Dummy Get Started Day Trading

[zghorner]

Well folks...

I've always had an interest in day trading, I don't know why but I feel drawn to it. Ive been doing some research and plan on doing a lot more but...

A few ?'s to get started:

1) is it true you have to have a minimum of $25k in your account to be a day trader?

2) What online broker and why? So much biased info out there on this, id like to hear from some local folks.

Like the title says...im a dummy and totally new to this so any info is greatly appreciated.

 

[Coded-Dude]

You could start out with as little money as you want. Some places may require a minimum, others don't. ALL of them charge you for each trade so buy wisely. If you buy 1 $5 stock(lets say SSE; a chesapeake spinoff) and it costs you $5 for the trade, you just paid $10 for the stock, so you won't make any money unless/until it goes over $10/share. The more you can buy with a trade the better off you'll be. I'm not a day trader, but I do own a few stocks(one of them being SSE....lol).

I use Bancwest, a subsidiary of Bank of the West, but they charge like $7 or $9 a trade. Though I don't do enough trades to look for the cheapest one(but I believe you won't find anybody cheaper than $5 a trade). I chose them out of convenience(I can see my portfolio when viewing my online bank account), and I feel a little better about transferring funds back and forth.

 

[COZICAN]

I use Scottrade. Daytrading can be scarey stuff. I did it for years but now just "invest". You have to learn not to care about what you are buying but why you are buying. "Trends" can be your friend and also your enemy. News can be the same way. Believe it or not...I made some of my best trades doing what everybody else was doing but that can bite you in the ass as well. The Scottrade Elite platform gives you so many tools as far as market trends and you can customize it to see what you want. Just my $.02.......invest in ETF's or mutual funds and hang on to your money.

Coz

 

[BuckFuller]

I have a couple of stock accounts with Charles Schawb. I never really qualified as a "day trader" but I did get to the point that I was trading enough stock between the two accounts that Schwab contacted me and said that I qualified as one of their "Active Traders" which got my trade cost under $10 per trade and they also gave me some software that allowed me to get real time market quotes, which was really nice. I pretty much tunred the trading over to a professional and don't trade much any more but if I did I would probably be looking at Robinhood, it's hard to beat "Free".

 

[zghorner]

Pattern day trader is a term defined by FINRA to describe a stock market trader who executes 4 (or more) day trades in 5 business days in a margin account, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period.[1]

As the trader is exposed to the potential risks involved in day trading and potential rewards, it is subject to specific requirements and restrictions.

A FINRA (formerly National Association of Securities Dealers, Inc. or NASD) rule applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin accounts, but not to cash accounts. A pattern day trader is subject to special rules. The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account. The required minimum equity must be in the account prior to any daytrading activities. Three months must pass without a day trade for a person so classified to lose the restrictions imposed on them. Pursuant to NYSE 432, brokerage firms must maintain a daily record of required margin.

The minimum equity requirement in FINRA Rule 4210 was approved by the Securities and Exchange Commission (SEC) on February 27, 2001 by approving amendments to NASD Rule 2520.

 

[zghorner]

I see now after looking closer...that rule does not apply to cash accounts.

good news.

Thanks for the info so far guys keep it coming

 

[davek]

The easiest way to make a small fortune day trading is to start with a large fortune.

 

[Okie4570]

The easiest way to make a small fortune day trading is to start with a large fortune.

Been using Scottrade for the last several years. davek nailed it though for the most part. Win big, loose big...break even or a little ahead most of the time. Don't play with more than you can afford to loose is the best insurance IMO.

 

[HoLeChit]

What is your goal with day trading? Why the interest? Are you trying to just have your money work for you?

 

[dennishoddy]

I day traded into a nice retirement with a small part of my nest egg. Never give up what you can't afford to loose, and NEVER go to any of the professional traders and listen to their advice about what is trending what is not.

They make commissions on wins or losses, and they are well known to say a certain stock is going to be a big moneymaker when they know its going in the tank to make that $$$.
I did it in oil. Did my own research, and watched what was happening world wide that might have an effect on the oil market.
Fortunes have been won and lost in this volatile market.

A co-worker made a nice nest egg on dimmable LED bulbs when they first came out by buying into it when it was a penny stock.

My suggestion is to dip into the well with penny stocks. You will learn pretty quick what it takes to self invest. Invest a couple of hundred bucks, play like a stock trader and see how your market skills might be before getting into big money.

Make your money, and get out. Watch for trends in other stocks that may suffer from world or natural events, and jump in. Ride it until you make some money and get out.

Don't be greedy thinking you will wring another .50 out of it. Get out when its good and go hunting for another.