Calculate precious metal dimensions, weights and purity iPhone Blackberry Android. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. Alcoa stock rose 6.
Gold Silver Platinum Palladium. Currency Converter Currency Cross Rates. Real-time gold scrap value calculator for professionals iPhone Android Web. Calculate precious metal dimensions, weights and purity iPhone Blackberry Android. Forex Charts - Jim Wyckoff. Thursday's Forex Analytical Charts, June Jim Wyckoff Monday June 18, Kitco Commentaries Opinions, Ideas and Markets Talk Featuring views and opinions written by market professionals, not staff journalists.
EU citizens to lose priority status after Brexit Oct 02, Oct 02, Trump, Trudeau praise new trade deal Oct 02, Can Brexit be stopped? Tesla shares rally sharply on Musk settlement Oct 01, Canada agrees to join revamped Nafta Oct 01, Oct 01, Macedonia PM to press on with country's name change Sep 30, Flake votes 'yes', pending FBI probe Sep 30, I do agree that most people lose money day trading and in stocks in general due to letting emotions dictate their trading: I had to get out of the market for a few years and missed out on the bull market.
If I stick to my rules, I should be able to get a higher return. About what Ali asked, I think this is how it goes. So if today is Friday, the funds will settle on Weds. Some brokers like Charles Schwab and Scottrade might allow you to purchase other stocks before Weds, however, if you then turn around and sell the new stock BEFORE the settlement date you can re-sell starting on Weds , then you trigger one of the regulation T violations.
You may only get a warning the first time. Always another rocket to the moon. This can be beneficial if a stock is running up and you want to get in on the action, but want to be able to sell the same day to make profit. I didnt find anything explaining the brokerage account setup in this article. Could you please direct me in the right direction? How is it that people day trade buy and sell the same stock frequently in the same day?
As I noted, I usually lose money when trading with unsettled funds. I had to file extensions with the IRS for like 2 years until one day an ingenious solution came to me. Also, even more important is how the IRS treats losses. Pay attention to this one. However, if you trade that same stock within 30 days i.
January 25th of the next year , that loss is carried forward. And then, next year, you can claim the loss. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:. If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale.
If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities except in 4 above. The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities.
Your holding period for the new stock or securities includes the holding period of the stock or securities sold. Use software called TradeLog TradeLogsoftware. I have just started intraday trading with varied success. I would be intrigued to know what trading strategy you are using. Would you be so kind to share with me.
Thank you for the post Cory! Your article was very informative and I am looking forward to trying day trading. Out of curiosity, what app are you using to create your charts and get real time stock info? Once you have an account the broker will provide real-time charts.
In the meantime, here is an article that provides information on getting free real-time charts: Just wanna know which stock broker do you use? I found there are a lot of choices and each of them offer their own platform. Depends on where you live and capital available as brokers may offer different rates for various amounts of capital.
Also depends on whether you will be an active day trader, or just making a few trades every now again. Interactive Brokers is popular Speedtrader is solid SureTrader has become quite popular for day traders looking to get started with small amounts of capital…. LightSpeed trading is another option.
Entering positions based solely on there set-up may work in this environment with tighter stops. Since I only make money off of the stock I am trading, the price action of that stock is really the only input into my trading decisions.
Keeps it simple that way. If you try to incorporate the index then you have to analyze two things simultaneously. It is more work, and unnecessary…in my opinion and experience and based on watching others who DO use the indexes a guide.
Your opinion on good brokers for Canadians. I have heard of them, but have no experience with them. That said, if they are structured as a trading firm, and you are basically just trading under their name by putting down what amounts to a deposit, then it may be legal.
For markets with lower capital requirements, check out forex or futures…see: Thank you for this post. How do you do the trading? In other words do you use a margin account or cash account? How is it that people day trade buy and sell the same stock frequently in the same day. I prefer a margin account, as you need one to be able to short sell…which you should be comfortable doing as a day trader. I would contact them about the reason they are giving you, but the result is likely to be same the reason may change, but they will still prevent you from day trading regularly.
Also, brokers are free to have more stringent requirements on day traders. If so, should directional bias be short for gap down and long for gap up respectively? Any time you have a very strong movement lower you can use the truncated price swing strategy to look for shorts. If there is a very strong move up, then you can look for truncated price swings to go long. Basically, you are just waiting for a pullback moving against the strong move.
As for gaps, yes you can use the strategy. I wrote about this particular situation here: In your opinion, if someone like me were to trade only SPY based on your technique every day, is it possible to become profitable? I would much rather focus on these to become a better trader. I am too fearful of individual stocks at my beginning stage. Hi Shaun, VXX is a measure of volatility. It is worthwhile trading it sometimes, but not all the time.
If you are going to pick one, trade SPY. It is really all you need. Loads of volume, so you can start trading with shares, and as you get more consistent you can slowly increase your position size. In SPY you never need to change anything about your strategy or take more trades to make more money…. SPY offers enough trades and potential each day. So when starting out, trade something with some volatility and lots of volume…SPY offers that, as do some other major ETFs.
Yeah, pick one and trade it. Thanks for this post Cory. I have been practicing this strategy for a month now and showing a small profit. Since we are trading consolidation breaks, what kind of orders do you suggest for entering a trade?
I plan to trade your Tuesday picks which seem rather liquid. Do you think a buy-stop market order would suffice since the spreads are small. Would appreciate your expert opinion in this area. Looking forward to trading live. The most common order for this strategy would be a sell stop if going short placed just below consolidation , or a buy stop if going long just above consolidation.
If you are trading the higher volume stocks on the list then a market order should be fine…. That is pretty much all I use in the stock with lots of liquidity. As mentioned in the article I may cause the breakout myself or enter inside the consolidation if things are really moving prior to the consolidation and there is a good chance that there may be slippage on the entry once it breaks out.
So be adaptive to the market conditions, plan ahead, but the above order types should be fine in most cases. Thanks for the info Cory. I appreciate all your hard work, discipline, and dedication to trading. Trading has been such a captivating pursuit, I hope one day to be trading for a living. For now, trying to stay humble and continue to learn.
A real food for thought there… I think it boils down to personality. Altucher may be a mad genius hedge fund manager, writer, computer programmer, business developer, chess enthusiast, media personality, etc.
That lends to making extreme, dangerous choices in trading. I agree with him that there are so many unknown, invisible forces in the trading world, some of which are beyond our control and totally manipulated by the powers that be. Like that time one of my trades was halted by the stock exchange because the stock was too volatile. I lost a big chunk there. One moment of misjudgement can wipe out many moments of effort. I still think day trading casually is a good way to make money only if greed and emotion are checked.
That there are unknowns is absolutely true. Ironically keeping risk and losses small is the fastest way to a grow an account. It hurts, but it still leaves trading capital to work with. And those were pretty extreme moves. Of course worse could happen, and I know that. Or spending years in an investment with having extracted nothing.
But since I withdraw my profits every month, even if I did lose it all, I have already made way more than I could lose. If I every did lose my account, maybe I would take a bit of time off, but I would do it again. I guess one difference between some traders and myself is that I never did it to get rich. I do it because I like it. There is no lure to growing my account as big I can, or gambling. I simply enjoy trading and try to find good ways to do it. As you said, it does come down to personality, at least partially.
I am in a good spot though. I glanced through the article and even somewhat agree with most of it. I am very open about the success rate in day trading being very low posted right near the top of this article. And yes, it is a zero sum game, so if I am making money someone else is losing. Once I was introduced to trading, there was no other option. It had to be done. My mission was to trade, and 11 years later I have zero regrets. We need both voices so people can hear both sides and come to their own conclusion.
All I can do is share what I have learnt and hopefully help a few people along the way…who also loving trading, and who are going to do it no matter what anyone says. Personally, I think it comes down to personality — he is somewhat manic if you read his books. The man does not moderate. But he makes excellent points and tells the truth also. Find stocks to day trade in one of three ways: Day Trading Stocks Between 9: First, the price must shoot either up or down, showing a clear bias in direction.
If the price seesaws back and forth, move on to another stock on your list. We want a sharp price move at or just after the open sometimes it may take a few minutes.
If the stock went down initially from the open, we only consider a short sell if the pullback that follows consolidates below the open price, then breaks that consolidation to the downside. The chart below is more of an advanced example.
You have to look at the overall price action to see that the direction bias is still down even though the price bounced above the prior short-term swing high on the second trade. Sometimes it will drop below the open. In this case, we now view the direction bias as down, and we wait for a pullback higher to consolidate below the high of the initial wave. We go short if the price breaks to the downside of that consolidation. If going long, you may but not required place a target at or slightly above the highest price seen after the open.
If going short you may but not required place a target at or slightly below the lowest price seen after the open. Risk — Based on the entry, stop loss and target price, your potential reward should always be at least 1. If the reward is less than 1. Since these volatile stocks move so quickly, and change direction in a split second, you want to be in these stocks only for the good time, not a long time.
So what is a signal to get out? Just get out as soon as the price stops moving or the price moves against you. Factoring in the Pre-Market: Only factor in pre-market moves if there is significant volume. If there are very few transactions in the pre-market, then disregard it from your analysis.
If the trend is down, only consider a short trade if the price made a lower swing low, pulls back, and consolidates below the prior swing high. Instead, we get a little pullback near For shorts, it goes two cents above the consolidation high. This ratio should be at least 1. The price would have to move beyond the prior low to fill the target, and I prefer not just assuming that will happen. You May Also Like. What is your opinion on that? But what do I know. Hi Cory, Amazing blog! Cory, I have a few challenging questions.
Thanks for any insight, oh wise one! Hi Steve, CFDs are fine but consider the commissions and the usually larger spreads on CFDs compared to the actual stock…this could make the day trading strategy less viable.
Thanks for your time! OR Yesterday, I entered on a pullback. Thanks for the feedback. The forex eBook will be getting an overhaul this year. Here are my initial thoughts: May want to start there, and then hopefully someone else has some insight as well. You can use either, but the ramifications are different. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account IRA or Roth IRA.
Hi Cory, Just wanna know which stock broker do you use? Cory, Thank you for this post. Thanks for your help.