After working at financial company as an ANALyst, I thought investing was easy. I thought same way as N55 did.
-I knew more math than above average analysts did. (which risk analysts applies any math higher than ODE? Applying Complex Var, PDE, and Abs Alg was normal for me).
-I knew more econometric, regression, error, risk analysis than average analysts at a top firm did.
-I knew most of macro and micro theories that sure do apply into the market, sectors, and industries and see how $$ can shift.
-I studied each sectors like I worked there. To cover biotech around 2002, I read all types of studies/journals/and molecular patents even BEFORE they officially made it a pipeline.
HOWEVER, there is no end. It is like damn Astrophysics. More crap I learn, More blanks I have. It is not easy. It is easy now, because it is one of the biggest bull market run. It would not be easy making $$ on shorting and playing around with PUTs and Writing all these options.
At the end, I just invest. After overthinking/overanalyzing, I tend to miss the target price by 5%.
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Originally Posted by N55
I did say at the end that you can lose big too...
When I day trade I only look for a $.10 to $.15 gain. I use a 3 Day RSI indicator, 6 day RSI Indicator and, a 14 day RSI indicator.
For example with $100k and a $20/share security (That is high volume and volatility) You need a stock that has 10¢ or more swings in under 10 minutes.
You buy 5000 shares of company xyz @ $20.00/share. Set a limit sell order for $20.10 and a stop loss at $19.80 (Varies case by case**) You wait seconds to minutes for it to gain $.10 ($20.10), you pocket the $500 gain (Minus commissions).
Rinse and repeat. Now you will lose a few times from your stop losses. I minimize this from using the 3 indicators.
Say you made 11 trades today, you were able to get the $.10 gain 8/11 times. That's +$4000, but you lost on 3/11 trades -$1500. You netted $2500 today. (Minus commissions of course, and assuming you were continuously able to purchase 5000 shares after the few losses (have extra money in the account but only trade with $100k))
Look at it how you want though. I do have days where I am in the hole for $2k within the first few trades, I get discouraged and call it a day early on those days and take a breather, because emotions can really screw you.
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Quote:
Originally Posted by NemesisX
If you're making hundreds of thousands or even millions of dollars a year day trading with very small amounts of money (<=$100k) as a side hobby at the age of 18, don't let me stop you. More power to you.
But don't be surprised when people are skeptical that you're able to achieve annual returns in the realm of 800% ($2000 per day for 365 days with an initial investment of $100k) using nothing but amateur hour quant techniques (macd, rsi, etc.). If you're re-investing capital gains then it's more like 5000% (2% returns compounded daily through 200 trading days i.e. (1.02)^200, income tax notwithstanding).
Anyone with enough gumption to read a few hour's worth of text online can learn to use these indicators for day trading, but I'll bet you a nickel that 99.99999999% of them aren't achieving anywhere near the level of success that you're claiming to achieve so easily.
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