# Day Trading for beginners



## Novise_man (3 February 2010)

Hi’

I’m new to this and I’m looking to do some day trading on my off days, was wondering what your view is on day trading for beginners. Also could you recommend the best value for money in regards to online broker services? 

Thanks


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## nuking (3 February 2010)

do a search.
you will find that has been discussed many times.
spend your time on it as a first step.


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## craigj (11 February 2010)

i find comsec is very user friendly
if you want to begin day trading learn by watching a stock before you start trading it.


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## Market Sniper (11 February 2010)

setup a demo account with ninja trader and learn to watch the action of the charts. Its free and a fantastic tool to start learning. DONT waste your money trading your hard earned until you have spent time figuring out some some repeatable and potentially high prob patterns.


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## SmellyTerror (12 February 2010)

Sir, I will also beg you right now not to put money in. Paper trade. Do it for a long time. Keep records just as you would have with real money. Day trading is not something to jump into unless you want to give your money away.

What are you going to trade, and how?

If you're open, I'd suggest Forex, since the data is free. Find a provider you like the looks of, and have a go with a demo account. When you lose a lot of fake money, go looking for ways to play the game better. :

You need to have a good bit of history to know what you're doing makes money. Keep in mind that a run of losses is part of any system: even a very profitable system can have bad runs. Without some history behind you, how will you know if you're losing money for nothing, or just riding out a bad patch? How will you make sure your money will survive a bad patch if you don't know how long that's likely to be?

...also, yeah, read more threads.


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## tech/a (13 February 2010)

If you choose to Day trade you'll be in and out same day
So the plan is to have far more winning trades than losing.
Your looking for excellent reward to risk but your challenge is to cut you potential losses as quick as possible .
Although my trades are rarely a single day the best way to tame little chunks out of the market I find you need to concerntrate pn rising your stop up as quick as possible.
Containment of losses and absolute minimization of accumulated losses should be your goal.
Understand to make a profit you need 51% winners with an R/R of 1:1.1 much higher for less.
A 3-5R winner can make a big difference to your days results 
If trading technically you'll need access to realtime short timeframe charts.
Don't think you should dismiss Blue Chips if day trading either as here is where you will find liquidity and more reliable trading patterns in the lower timeframes.
Can be very rewarding in these times of minimal trending longer term


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## newbie trader (14 February 2010)

Hey,

I'm really new to trading but would have thought you would at least try day trading on some demo accounts/with a pen and paper before you do the real thing. Apparently a lot of people who go into day trading unprepared lose a large portion if not all of their money within 6 months of starting...and for your day off youre undertaking a very stressful activity when you should be relaxing by the pool :. I hope everything works out well for you. Just my .

N.T


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## SteeleBryant (14 February 2010)

As others have said, starting on pen and paper is the way to go. Maybe start off  by watching stocks, seeing how they react throughout the day. Buy a few stocks and hold onto them and watch how they react to volume and watch their charts to see trends. Overall, I wouldnt jump into the market straight away! :


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## tech/a (15 February 2010)

Have a daytrade running so thought Id share it for those interested.
2nd by triggered as I type.
Second trade stop $23.39
This is WBC 10 min chart Tradeguider software.


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## tech/a (15 February 2010)

Position 2 which was 50% of position 1 now stopped.
Have another point for another buy but wont post it unless taken dont want people to think I'm recommending a trade.


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## CanOz (15 February 2010)

Good on ya Tech, too bad you didn't post it earlier i got a guy here interested in trading and i was showing him a few opportunities i was watching, BXB, CSL. I missed CSL when it bolted, BXB was doing nothing. So now we're watching the AUD.

Cheers,


CanOz


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## tech/a (15 February 2010)

Closed this position going out of the office--pretty dull just above B/E

$23.35


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## ginar (15 February 2010)

tech/a said:


> Have a daytrade running so thought Id share it for those interested.
> 2nd by triggered as I type.
> Second trade stop $23.39
> This is WBC 10 min chart Tradeguider software.




I wouldnt be daytrading a bank of of such limited data , you were taking on a swing high from early feb not to mention abs data on lending finance that came out this morning . 

http://www.abs.gov.au/ausstats/abs@.nsf/mf/5671.0?OpenDocument

i actually had WBC at top of channel and would have been looking to short above 2350 if i was watching it . no offence but you were taking a low probability trade imo .


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## tech/a (15 February 2010)

> no offence but you were taking a low probability trade imo .




Certainly turned out that way.

They always look low probability when they fail to go on with it and higher probability when they do.

Next.


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## ginar (15 February 2010)

tech/a said:


> Certainly turned out that way.
> 
> They always look low probability when they fail to go on with it and higher probability when they do.
> 
> Next.




Now you know thats not right tech , probability is defined before entry and not after , but hey whatever makes you feel better . 

Proabibility doesnt preclude the possible from happening , just manage the possibilities


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## tech/a (15 February 2010)

ginar said:


> Now you know thats not right tech , probability is defined before entry and not after , but hey whatever makes you feel better .
> 
> Proabibility doesnt preclude the possible from happening , just manage the possibilities




Its probably me but if I'm going to take a quick trade (Day or so) I dont need a great deal of analysis.
Price and volume with reactions to both are all I need.
Have taken some trades on no knowledge of why a volume price have started to move and exited based upon the same (reaction to volume/price).
Interested in R/R nothing more.
Today on that trade flat. Which in my view is fine.


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## Frank D (15 February 2010)

ginar said:


> probability is defined before open and not after




SPOT ON!


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## tech/a (15 February 2010)

If then you are defining a probability to a move then you are predicting a move.

I dont believe you can predict a move with any certainty.
As such I cant see how you can define a probability level(High,low,average) to a set of analysis results. Particularly in various timeframes as they may and do often conflict.

You can however place yourself in *anticipation *of a move in a direction.

Those who believe they can assign a high probability (greater than 50%) to a setup move or level over a period of time in prediction of a move in a direction with greater than 50% accuracy over a long period of time--years are deluded.

I'm yet to see how this can be calculated on analysis as there are endless variables.

But I'm sure some of our more learned friends here will show me how they do it!
Havent seen it yet and Ive been watching you anticipate moves for years Frank!
The only time Ive seen a prediction confirmed or un confirmed is after a time period.
Ive never seen a probability assigned to an anticipation before.

Semantics---I dont think so there is a clear difference.


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## ginar (15 February 2010)

tech/a said:


> If then you are defining a probability to a move then you are predicting a move.
> 
> I dont believe you can predict a move with any certainty.
> As such I cant see how you can define a probability level(High,low,average) to a set of analysis results. Particularly in various timeframes as they may and do often conflict.
> ...




I cant talk for frank but i must be deluded then . i aim for and achieve a better than 50% success rate on trades , must be pure luck as probability has nothing to do with it . you just keep trading breakouts with no regard for previous and current energy levels (action/reaction) on various time frames and i will just muddle along

trade well


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## tech/a (15 February 2010)

ginar said:


> I cant talk for frank but i must be deluded then . i aim for and achieve a better than 50% success rate on trades , must be pure luck as probability has nothing to do with it . you just keep trading breakouts with no regard for previous and current energy levels (action/reaction) on various time frames and i will just muddle along
> 
> trade well




Everyone aims for a winning trade.
but before each trade is taken we have no idea whether it will be a winner more so how much it will win---we can determine loss.
We can look at 100s of various analytical tools and feel really comfortable that ALL those tools align before we take a trade but the hard truth is that we cannot be certain at the time of the trade whether in fact THIS trade has a higher probability of a winning trade than the LAST trade which also ticked all the boxes.

Unlike you I don't aim for a certain % winners only a positive R.
I can do that with far less than 50%!
I don't have to be right more often than I'm wrong.

Ill just muddle along with you.


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## Mr J (16 February 2010)

My advice would be to consider the commission and spread of different stocks and markets, to calculate what is needed to break-even. If you're willing to risk say 10 points and there is 2 points of expenses, you'll need to make 20% per trade just to break even. On 5 points of risk, you'd need 40%. On 20 points of risk, you'd need 10%. Which of those would be easiest for a new trader to overcome?

This doesn't mean short-term trading is impossible (far from it), but I think it's far safer to start with slower trading. Brokerage and spread can be significant, as trading the euro/usd for example is far, far cheaper than trading bhp.



			
				Tech/a said:
			
		

> Unlike you I don't aim for a certain % winners only a positive R.
> I can do that with far less than 50%!




By aiming for a certain R:R, you are also aiming for a certain win%.


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## tech/a (16 February 2010)

ginar said:


> Now you know thats not right tech , probability is defined before entry and not after , but hey whatever makes you feel better .
> 
> Proabibility doesnt preclude the possible from happening , just manage the possibilities




Today the wheel has turned the high probability high risk trade of yesterday today looks highly profitable low risk.
Yesterdays Day trade failed but perhaps the anticipation remains in tact in spite of the "Probability" due to the factors of analysis as seen by ginar.

I'm glad to see that the Probability was (Clearly!!!) known before the trade!! I'm sure this shows the futility of fixed analysis!



> By aiming for a certain R:R, you are also aiming for a certain win%




Im aiming for a positive R not a definative %R
Even so I'm interested in how if I was aiming for a particular R% return how that equates to a % win. It could but its not necessary.




> as trading the euro/usd for example is far, far cheaper than trading bhp.




If you mean leverage and possibly brokerage then yes but otherwise?


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## tech/a (16 February 2010)

Todays trade with WBC
5 min chart

Click to expand


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## tech/a (16 February 2010)

Out $24.65

34c in the trade.


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## Kryzz (16 February 2010)

tech/a said:


> Out $24.65
> 
> 34c in the trade.




Nice job tech, 

does your risk level change when trading equities intraday, eg, from 1% per trade to a daily risk limit, ie, no more than 1% of capital risked for the day?

cheers


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## tech/a (16 February 2010)

Very rarely trade intraday.
But will risk (In this case) .5%-2% of equity and move to B/E as quick as I can.
If I'm on a flyer I will add as quick as I can and just get out when volume and range flattens.
Prefer longer but nothing much on offer.


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## satanoperca (16 February 2010)

Tech/A,

Would you say that day trading is like most forms of trading just on a different time scale. Day trading you must be quick and react fast as positions can move quickly for or against you.

Cheers


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## new2stock (16 February 2010)

hi i had a question,

i am new to the stock market i have bought some shares in some companies already just small amounts for a first go and theyhave actually gone up to my surprise haha.

Anyway my question is I was looking at this one particular stock, it's selling for .001 cents. I have noticed people buying about 5k worth for example then the next few days I see them selling it again for .002 potentially doubling money - tax / brokerage fees is this normal cause it seems as though its an easy way of double or nothing. i'm not 100% on the difference between day trading and short selling but what does that fit under and whats the risks of this?


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## Wysiwyg (16 February 2010)

new2stock said:


> hi i had a question,
> Anyway my question is I was looking at this one particular stock, it's selling for .001 cents. I have noticed people buying about 5k worth for example then the next few days I see them selling it again for .002 potentially doubling money -




If you provide the company symbol I can show you that the entity buying is not the entity selling the next few days. There is a priority to order execution and the ask side you see at .002 has a list of orders awaiting execution. You cannot jump to the front of this queue to execute a sell at .002.


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## nunthewiser (16 February 2010)

Wysiwyg said:


> There is a priority to order execution and the ask side you see at .002 has a list of orders awaiting execution. You cannot jump to the front of this queue to execute a sell at .002.




With the exception of the " auction shuffle "  ............ good game that one..handy sneaky tool of the trade is the "auction game" .....but be careful can turn on you in the blink of a bid


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## Wysiwyg (16 February 2010)

nunthewiser said:


> With the exception of the " auction shuffle "  ............ good game that one.




Pending bid quantity is greater than ask quantity at the match-up.


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## tech/a (16 February 2010)

satanoperca said:


> Tech/A,
> 
> Would you say that day trading is like most forms of trading just on a different time scale. Day trading you must be quick and react fast as positions can move quickly for or against you.
> 
> Cheers




Yes.
Like any trading your looking for a trend to ride.
The tighter you ride a trend the shorter you'll be on it.
If you look at the daily bar for today I managed to get a fair piece of that above the Gap.
Had I held yesterdays position O/N I would have profited handsomley.
BUT the whole idea of day/session trading is to take out the risk of O/N holds.



> I have noticed people buying about 5k worth for example then the next few days I see them selling it again for .002 potentially doubling money - tax / brokerage fees is this normal cause it seems as though its an easy way of double or nothing. i'm not 100% on the difference between day trading and short selling but what does that fit under and whats the risks of this?




You can enter a buy order for .001 then a sell at .002 or whatever you like.
But as others have said you could be a while getting filled.
Range trading is common BRM is one which has been very predictable in this consolidation.


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## Mr J (17 February 2010)

tech/a said:


> Im aiming for a positive R not a definative %R
> Even so I'm interested in how if I was aiming for a particular R% return how that equates to a % win. It could but its not necessary.




It doesn't have to be a specific figure, I could have said the same using ballpark figures or ranges. There are three values that make up the expectancy equation, so having an aim for any two of those values means also having an aim for the third.



> If you mean leverage and possibly brokerage then yes but otherwise?




I was thinking of brokerage and the spread. If I make a 10k stock trade at IB, that's $16 round trip, plus some spread. For the same cost, in forex I'd be able to trade 160k. Obviously forex requires trading larger amounts since the moves are smaller, but I remember it still being a very large difference. I think futures were even better. It doesn't matter as much for medium and longterm timeframes, but it's significant for a day trader, and not the best place for a beginner to start.


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## Trembling Hand (17 February 2010)

An important thing to consider is Ticks to Costs ratio.

For FX its around 2-3 ticks to cover cost (brokerage and/or spread)

With Futs it 0.3 to 1.5 ticks (depends on entry/exit method) that includes FX futs & ECN.

With stocks its *woeful*. If you are looking at the $20 - $50 range you need 7 to 10 ticks just to cover brokerage then you have to add spread which is mostly nowhere near as tight as futs or major fx. I would like to see the effect of that cost over a year of day trading ASX stocks.


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## tech/a (17 February 2010)

I think this is worth repeating for those who didnt understand it as the last 2 days have drilled into us on WBC.



> We can look at 100s of various analytical tools and feel really comfortable that ALL those tools align before we take a trade but the hard truth is that we cannot be certain at the time of the trade whether in fact THIS trade has a higher probability of a winning trade than the LAST trade which also ticked all the boxes.


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## Sir Osisofliver (17 February 2010)

@ Tech/A

Not sure if this will be considered :topic or not. I just wanted to get into your head a little. If you think it is and want to continue I'd be happy to take this to a new thread.

Yes I appreciate that we are talking about the very specific area of day or session trading, but I'm curious as to your reasoning behind a few things.

From your comments in this thread it appears that your exit strategy is entirely dependent on the placement of your stop loss. From what you've said you do not appear to use indicators or price action as a guide for your exit levels.

I'm wondering if this is simply a result of the style of trading that you are employing with fast trading requiring a simple and quick method of managing the outcomes of multiple positions, or if there is another reason.

Your comments that... 

"Everyone aims for a winning trade.
but before each trade is taken we have no idea whether it will be a winner more so how much it will win---we can determine loss.
We can look at 100s of various analytical tools and feel really comfortable that ALL those tools align before we take a trade but the hard truth is that we cannot be certain at the time of the trade whether in fact THIS trade has a higher probability of a winning trade than the LAST trade which also ticked all the boxes."

are intriguing to me because I obviously follow a very different style to yourself, where I have some expectation as to price movement.  From this expectation of price action I determine my positional sizing, trade risk weighting and set a stop loss.

Without some expectation of price how do *you* determine such things?

Cheers

Sir O


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## tech/a (17 February 2010)

Sir O
Happy to continue discussion elsewhere,which is more appropriate I think.
Leave it to you.


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## dantheman3000 (17 February 2010)

My suggestions for what they are worth;
Rule One: Dont lose money (stick to your stops)
Don’t do it unless you can do it full time.
Get good news sources, AFR, Eureka, business spectator, Bloomberg, barrons, Financial times, business spectator, Trade the news (live squawk), Hightower report (futures)
Find a cheap broker. 
Stay the hell off stock forums for your trades
Get a good charting package (metastock, signal)
Get a good mentor 
Paper trade, paper trade, paper trade! Trial your entry methods and profit targets and learn to reject trades that don’t conform to your criteria. They really are a dime a dozen! 
Define your risk to 1% of your trading account on every trade. 
Read as many books as you can, turtle traders, etc
Most importantly give yourself every opportunity of being successful. Don’t go at it half hearted. Do not die wondering.

Good luck!


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## Frank D (17 February 2010)

tech/a said:


> I think this is worth repeating for those who didnt understand it as the last 2 days have drilled into us on WBC.




Don’t’ confuse probability with being a pork chop.

You were trading a breakout pattern that was known before the open 
and validating the pattern with intra-day price action.

The pattern was known before the open and validated thereafter using 
intra-day noise.

Don’t confuse probability with curve fitting price action.

Leave that for the gullible pork chops


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## Sir Osisofliver (17 February 2010)

tech/a said:


> Sir O
> Happy to continue discussion elsewhere,which is more appropriate I think.
> Leave it to you.




https://www.aussiestockforums.com/forums/showthread.php?t=18814

ok thread up

Cheers

Sir O


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