Sunday, August 06, 2006

Why Do I Day Trade?

Unlike many who day trade I'm not afraid of gap ups or downs the next day in the stocks I hold. In fact I spent much of the year buying at 3:45 and selling at 9:45 for quick scalps. I did OK at that but it was a very risky way to trade and in reality didn't make a whole lot of sense. Especially when the stock continued to go up throughout the next day and I had already sold it.

No. The reason why I day trade is that I grew tired of having 4 or 5 stocks, watch the market indices go sky high and my stocks hardly even budge. The INDU returns 240 points and my portfolio loses 5 bucks. Picking the correct stocks is extremely difficult and picking them for a long term (or even short term) return is even more difficult. And I am lazy.

Well, not really, but let's just say I don't want to put in the effort unless I am guaranteed a return and the way I was doing things wasn't getting it done.

So I started studying day trading methods. Fortunately I happened on a wonderful site populated by excellent teachers - Trader-X's blog (indicated by "day trading" in the link list).

I've said this before and I'll say it again - Trader-X knows more about the market and the ebb and flow of stocks than any oneelse I have ever read. He provides a primer on his site and if you don't learn how to day trade after reading that and following along for a week or so you are hopeless and should go back to your video games as you are never going to make it in this business.

Now when the INDU goes up 100+ points I make money and when the INDU goes down 100+ points I make money and I am happy.

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