Should I Try Day Trading?

| Mar 13, 2008 | 14 comments

This one has popped in and out of my head for a few years now. I have a friend who has been doing it for a while now and making pretty good money off it. But I still haven’t jumped on the bandwagon.

He’s done forex and penny stock investing but prefers the forex. He’s tried to get me interested in it a time or two also, but the numbers and graphs he sends to me are still a bit over my head. I try to analyze them, but usually find myself getting frustrating wondering what he is doing, or have a kids that needs attention.

He’s certainly put a lot of time into the job; which clearly I don’t have at this point in my life, but makes a good living and can’t see it any other way. His kids are grown and out of the house, he drives a nice Mercedes Benz, and works where ever he’s got internet access. Why DON’T I do that? Doesn’t it sound fun?

Well, yea, it sounds really fun AND convenient; but do I have the time to put into it now? Everything, and I mean EVERYTHING can make money. The “cream of the crop” in any respective category of business has a firm grasp of what is on the horizon, how to capitalize on it, and the drive to succeed at it.

I’m decent at several things, and I think “above average” at my job. I do well and make a pretty decent living. My daytrading friend says the same things, but clearly at a higher level. He’s been doing it for quite a while now and has plenty of spare time with the kids out of the house.

Learning a new trade for me right now isn’t in the works. I’ve got a full plate as it is and being “mediocre” in daytrading is going to get my butt in hot water I think. Not only do I have the chance of losing a lot of money, but in so doing, I’d be sacrificing my work ethic at my day job.

How would you explain to your boss at work that you’re on Forex.com all day when you should be getting him those TPS reports? :) Might be a tough sell. So for now I’m staying out, but am not saying it isn’t money in it. Clearly there IS money in it – lots and lots of it.

Who hasn’t gotten an email from a spammer touting a low priced penny stock? Buy XXX stock today as it is going to go up $210,000 per share by tomorrow! They pump and dump those stocks and leave you in the dust.

If you’re young and single, I say it may be worth taking a look at it. The potential upside is VERY high, but at the same time, the downside is VERY high as well.

Has anyone else reading this blog dabbled, succeeded, or lost in daytrading? Any tips to the rest of the world?

Photos by: Helico, epicharmus

Filed Under: Compensation • Debt • financial education • Frugal • Investing • Net Worth • Passive Income • Portfolio

  • http://streamingincome.blogspot.com naveedsmind

    Wall Street unfortunately can be considered the world’s biggest casino. And day traders are the casino kings. Sure you can make a ton of money doing it. But in one shot you can lose quite a bit as well. I know a guy who lost thousands because he took a restroom break at just the wrong time. The stress level involved in day trading is through the roof – it’s much easier just to buy great companies at cheap prices. If it was so easy – there would be no buy-and-hold managers around at all. But you basically said it Hank – just about anything can make you money – you decide if you want to venture down that path.

  • http://www.hobbytrader.blogspot.com/ xarisrizo

    Forex trading with big leverage can make you a lot of money without having to daytrade. Take a look at my performance, all you need to do is get on the right train/trend, on the long term

  • http://jonatsgonats JonatsGonats

    You need to be prepared mentally and emotionally for day trading. Also day trading is really hard if you define it as buying and selling within a day. Also doing homework and adjusting on news is also key in day trading. Some are really good at it, some are not… I think it just being comfortable you are in any trading strategy then stick with it.

  • http://myinvestingblog.com hank

    @Naveed – Crazy how fast money comes and goes in the market, eh? :)

    @xarisizo – Nicely done, you certainly have a knack for it! Congrats and welcome!

    @Jonats – That’s what my buddy says; he’s always watching the news on what’s happening and when it is supposed to happen. thanks for dropping by!

  • http://chasingthebull.info Dusty

    Day trading is a bad idea for most investors. If you expand your time horizon by a few weeks, even months, active trading can work. Myself; I prefer to sell covered calls to generate consistent monthly income, but that is more an issue of style versus ability (as no one can actually time the market correctly 100% of the time).

  • Pingback: Making Money Journal » Posts I Enjoyed Reading This Week: Tired Edition

  • Pingback: Changing 401k strategy | On Financial Success

  • http://blog.tufftrade.com miracletech

    I am a Day Trader. Any newbie that wants to try Day Trading better be aware that it’s extremely difficult & it takes a long time to learn. It is not something to be taken lightly.

    miracletech’s last blog post..Day Trading Lesson: Roadmap Step 1

  • http://invest4ff.blogspot.com Invest4ff

    I am agree with Miracletech, it is not easy to become a day trader. I am 24 years old this year and I am now trading full time and I have a part time job to support my living. Since I am still young and do not have attachment like wife, girl friend or maintenance like car or house yet, I would like to give it a try and learn as much as I can from the market.

    Ricky Chea’s last blog post..Carnival of Equity Trading #3- April 27, 2008

  • alysia

    Nice blog. Thanks for your work on it.

    I’ve recently created a completely free forex website which hopefully will be of use to you.

    The purpose of this site is to show you how the forex market reacted in the minutes and hours after news was released. Patterns have emerged. For instance, if the USD Non Farm Payroll number is significantly better than expected, the USD will initially gain against the GBP and Euro in the minutes after the number is released, and then lose value shortly there after.

  • http://www.ftse-trading.com Robin

    Hello every one,

    Losses….that is a part of the trade…You lose some & you win some…..

    But I myself use a system that works just fine for me & that is perfect for in all terms.

  • Marshall Smith

    Industrial Biotechnology Corporation, (IBC), (Pink Sheets:IBOT) has now announced to use Ethanol the Chemicals ALCHEMx Production Platforms, through which they can convert sugarcane based ethanol to ethylene at a very low cost and also doesn’t result into effect on the environment.. Will this have any positive effect on the company’s long term business??

  • http://worldworststockpicker.com The World’s Worst Stock Picker

    In the late 90′s you could make a good living by scalping the NYSE specialists the bid/ask spreads.
    Back then the quotes were done in fractions and the lowest denominator was 1/8 (0.125 cents). What you would do more or less is this:

    1. Find a stock that traded enough volume but that did not moved. REITS, utilities.
    2. Lets say the bid ask spread was 20-20.5 the spread is 1/2. Since in the NYSE the orders from the customers take precedent you could offer to buy the stock at 20 1/8. Your order would be filled ahead of the specialist. You get filled at 20 1/8 then turn around and sell it at 20 1/4(20.25). Again your order gets in front of the specialist order and your sell order gets filled at 20.25. You scalped a grand total of 1/8 cent or .125 cents. Do this enough times and you could also have made a killing. The position size is around a 1000 shares for it to work (about 125 dollars profit per trade).

    After the decimalization of the markets the spreads are much tighter and this method does not work as well.

    Day trading is too much stressful done some other way.

    The World’s Worst Stock Picker’s last blog post..I added stock quotes to the site.

  • http://worldworststockpicker.com The World’s Worst Stock Picker

    In the late 90′s you could make a good living by scalping the NYSE specialists the bid/ask spreads.
    Back then the quotes were done in fractions and the lowest denominator was 1/8 (0.125 cents). What you would do more or less is this:

    1. Find a stock that traded enough volume but that did not moved. REITS, utilities.
    2. Lets say the bid ask spread was 20-20.5 the spread is 1/2. Since in the NYSE the orders from the customers take precedent you could offer to buy the stock at 20 1/8. Your order would be filled ahead of the specialist. You get filled at 20 1/8 then turn around and sell it at 20 1/4(20.25). Again your order gets in front of the specialist order and your sell order gets filled at 20.25. You scalped a grand total of 1/8 cent or .125 cents. Do this enough times and you could also have made a killing. The position size is around a 1000 shares for it to work (about 125 dollars profit per trade).

    After the decimalization of the markets the spreads are much tighter and this method does not work as well.

    Day trading is too much stressful done some other way.

    The World’s Worst Stock Picker’s last blog post..I added stock quotes to the site.