Hot Pick Of The Day

[Runner]

I’m bullish on PTMK as long as lower blue line holds. This was what I’m keying on for intraday chart. (last chart)

[New-born baby]

How many?

Only took .05 cents on it this time.lo

Runner--
If it isn't too personal, how many shares do you trade at once?

I am in the process of moving over to Interactive Brokers. Their lower commisions will allow me to daytrade a smaller number of shares. I used to always buy 1000 at a time, but I am thinking of daytrading with only 100 to build confidence and experience.

Any advice you want to push my way will be appreciated!

[Runner]

Newborn. I used 500 shares for this trade. Nothing wrong with going with 100 shares. In fact I still use 100. When market conditions look sick if I trade I’ll trade fewer shares. Many people will trade a fixed amount with each trade. I don’t do that. Now when the market is strong you go a little heavy, but still stops in place and honor them. Position sizing is part of the game.

I think it is a great idea that you take it slow and try to think your trade through. After your out save your charts and study it. This has helped me more then you could imagine.

Before you use IB study the platform. They have a real good tutorial. I made a huge mistake in the beginning. I meant to go long a stock and clicked the wrong button and shorted it. Hit me pretty good with that one. Also I recommend only trading 1 stock at a time.

I’m surely not an expert when it comes to D/T or anything as far as the market goes. But if you can get a nice hit rate going with that 2.0 or above ratio. I think you’ll be happy.

[Runner]

Oh yea I should also mention you must be careful with day trading if your account is under 25k. You could get your account frozen (T-3 Warning), I think you can trade 3-4 times a week with under 25k not sure so check it out.

[New-born baby]

Runner

Oh yea I should also mention you must be careful with day trading.

Thank you Runner!

I am trying to pick it up as fast as I can, and be as careful as possible. Others may laugh, but if I can pick up $20 on a trade, I sure don't cry. I look at it this way: I am gaining experience, confidence and $20. That's better than nothing. And it should pay more with time--I hope.

Thank you again!

[Websman]

Oh yea I should also mention you must be careful with day trading if your account is under 25k. You could get your account frozen (T-3 Warning), I think you can trade 3-4 times a week with under 25k not sure so check it out.

Here is the daytrading rule:

Beginning September 28, 2001 margin rules and requirements for one group of traders changed dramatically. The new rules apply to traders categorized as Pattern Day Traders (PDTs) who are defined as traders who make 4 or more day trades within a 5 day period, unless his/her day-trading activities do not exceed 6% of his/her total trading activity for that time period. Thus, if you have only 4 daytrades in a 5 day period but have done more than 67 trades during that time, then less than 6% or the trades were day trades and hence do not categorize a trader as a PDT.

A day trade refers to opening and closing a position within the same trading day. If you are in a position with one entry of 1000 shares though and take two exits of 500 shares each within the same day this is only considered one day trade. You could also be categorized as a PDT right away without waiting to see your 5 day record if your trading firm has reason to believe you will be a PDT. For instance, if they trained you solely to day trade.

There are several main changes which now affect pattern day traders. One is that PDT's must have a minimum of $25,000 to open a margin account as opposed to previous requirements of a mere $2000. Funds deposited into a day trader's account to meet the minimum equity requirement have to remain there for at least two business days following the close of business on the day the deposit was made. Many brokers now require all PDTs to have the minimum $25,000 even if they are trading from a cash-only account as the new rule is unclear about trading from cash accounts. It does clearly prohibit it and yet, neither does it state it is allowed

[B.J]

Webs, thanks for the explanation. And timely...

So happens I had that happen to me today. My 401K rollover (happens to have just over $25K) gave me a warning. "WTF" I said. I've done it four times this week, but only one of those was a trade within the same day. The other three were held overnight. I usually prioritize my eTrade account because obviously it is cheaper than my Schwab account. It appears I have some complaining to do

Plus, Webs, I offered my take to your entry question in the ELN thread.

[Websman]

Webs, thanks for the explanation. And timely...

So happens I had that happen to me today. My 401K rollover (happens to have just over $25K) gave me a warning. "WTF" I said. I've done it four times this week, but only one of those was a trade within the same day. The other three were held overnight. I usually prioritize my eTrade account because obviously it is cheaper than my Schwab account. It appears I have some complaining to do

Plus, Webs, I offered my take to your entry question in the ELN thread.

I'm suprised I haven't been warned about daytrading yet. That's a screwed up rule if you ask me. What ever happened to free enterprise? Isn't it our money to risk?

Thanks for the ELN post!
I'll try for an entry tomorrow.

[spikefader]

........others may laugh, but if I can pick up $20 on a trade, I sure don't cry. I look at it this way: I am gaining experience, confidence and $20. That's better than nothing. And it should pay more with time--I hope.
Thank you again!

You are a genius for doing that. I absolutely encourage trading a ridiculously low number of shares when you're learning....so low you don't CARE what happens as far as the money. It's about getting a routine happening; focussing on the discipline of the plan, actually trading the plan and not letting emotion change your perspective. If you've got a P&L display, move it, switch it off, put tape over your monitor if you have to but you don't want to be looking at it - it's a distraction and irrelevant to the trade plan. Think r/r and entry and exit prices, target price, and absolute bottom line emergency exit, whether you're hard market order stop, or limit order stop that you may have to get cute with if the volume is thin and it drops quick. But intraday P&L inspection is a no-no until you are at one with your routine and method and discipline. Let's face it, we know how much we'll gain or lose on the trade, we don't need a blow by blow moment by moment dollar sign update flashing in front of us

Oh, and with that day trade restriction, if you have an IB you will note that the TWS platform will actually NOT LET YOU make that fourth day trade that will turn you into a 'pattern day trader'. You can try to submit the order, but it will reject it. So there is no chance of you being labelled a pattern day trader and then requiring you to bring your equity up to 25K before they let you trade again.

See here http://www.interactivebrokers.com/en...DayTraders.php
for this sentence:

".. therefore those customers without this minimum equity and who have completed three day trades within five business days will not be allowed to enter another trade"

[New-born baby]

Thank You

Spike, Runner, et al--
Scottrade had me labeled a pattern daytrader the second day I was with them, so the limits aren't a problem. Unless I make some totally disasterous trades, I should be okay.

I just need to identify a universe of stocks to daytrade, and watch them very closely. That's where I think the next step is.

I plan to follow the Spike/Runner method of watching the intraday chart, enter at support, exit at resistance (if it won't break), and insisting upon getting a good r/r on every trade. I already (at least I think I am) very careful about stops, and having a plan. But of course, I am not saying that I am not open to instruction. I welcome anything you all post.

Thank you all for all you do! You probably can't image how much good this forum has done for me. It has made a HUGE difference in my bottom line.

[jiesen]

So there is no chance of you being labelled a pattern day trader and then requiring you to bring your equity up to 25K before they let you trade again.

See here http://www.interactivebrokers.com/en...DayTraders.php
for this sentence:

".. therefore those customers without this minimum equity and who have completed three day trades within five business days will not be allowed to enter another trade"

This sounds a little dangerous for those trading with under 25k, especially those who trade frequently, and with stops, but don't consider themselves PDT's. The effect of this rule on a really bad market day would be to cause someone who just stopped out 3x in a row to fail to be able to exit his 4th position that day at his stop. If he were using a significant amount of margin, and the market was taking a bad enough tumble, he might even be forced to sell as low as his margin call dictates, despite the perfectly "safe" stop he had planned (ignorant of the fact that it would be rejected by this new rule).

[spikefader]

This sounds a little dangerous for those trading with under 25k, especially those who trade frequently, and with stops, but don't consider themselves PDT's. The effect of this rule on a really bad market day would be to cause someone who just stopped out 3x in a row to fail to be able to exit his 4th position that day at his stop. If he were using a significant amount of margin, and the market was taking a bad enough tumble, he might even be forced to sell as low as his margin call dictates, despite the perfectly "safe" stop he had planned (ignorant of the fact that it would be rejected by this new rule).

You misunderstand the rule. You can EXIT as many trades as you like. Let's say you have built up 20 positions over a number of days/weeks, all the while, not getting to that 4th day trade situation. And let's say something happens today in the market that rockets it up to all your targets or plunges to all your stops, IB will still let you exit those positions without breaching the 4 day trade rule. While IB's rule will prevent you from opening your fourth daytrade within the given timeframe YOU CAN still exit/close/take profits/stop out as many trades as you like.

You just can't open a fourth day trade, since there is a possibility that you would close that trade on the same day you open it, which would mean you've completed your fourth daytrade and have to then be labelled a pattern trader and required to have 25K before you will be allowed to trade again. Get it?

Have a good one!

[jiesen]

You misunderstand the rule. You can EXIT as many trades as you like. Let's say you have built up 20 positions over a number of days/weeks, all the while, not getting to that 4th day trade situation. And let's say something happens today in the market that rockets it up to all your targets or plunges to all your stops, IB will still let you exit those positions without breaching the 4 day trade rule. While IB's rule will prevent you from opening your fourth daytrade within the given timeframe YOU CAN still exit/close/take profits/stop out as many trades as you like.

You just can't open a fourth day trade, since there is a possibility that you would close that trade on the same day you open it, which would mean you've completed your fourth daytrade and have to then be labelled a pattern trader and required to have 25K before you will be allowed to trade again. Get it?

Have a good one!

ok, I guess I misunderstood the rule. that makes some sense, except that if you were to initiate, say, 5 positions one day, they wouldn't be day trades until you sold them out that day. so the system would have to stop you from buying your 4th position, regardless of whether you planned to exit any/all of them that day. so how does someone then initiate 60 positions in a week he doesn't plan to sell for awhile without triggering this halt? is there a special flag that non-pattern daytraders use to designate trades they intend to exit that day?

this rule is pretty confusing... and I apologize if I'm just adding to the confusion!

[Websman]

this rule is pretty confusing... and I apologize if I'm just adding to the confusion!

Screw the rules! Let's go have a drink!!! Hahaha!!!

[spikefader]

Screw the rules! Let's go have a drink!!! Hahaha!!!

LOL - ya, don't mind if I do Webs.

Hey Newborn, speaking of alcohol, you know the red wine that Jesus made from water........was it fermented? The bible says don't get drunk, so how many can a good Christian boy have do you think? 3 drinks in the first hour and 1 every hour after that? Just a couple to quench the thirst and relax the trading psyche? (I'm not being too serious here by the way)

...if you were to initiate, say, 5 positions one day, they wouldn't be day trades until you sold them out that day. so the system would have to stop you from buying your 4th position, regardless of whether you planned to exit any/all of them that day. so how does someone then initiate 60 positions in a week he doesn't plan to sell for awhile without triggering this halt? is there a special flag that non-pattern daytraders use to designate trades they intend to exit that day?

this rule is pretty confusing... and I apologize if I'm just adding to the confusion!

Yep, you got it, the IB system prevents you from opening the 4th, no matter what, so you don't have to flag them as anything, since it doesn't matter if you open and close three on the same day. It's only the 4th that will make you cross over, and you are denied the 4th.

Good question about the 60 positions. I wonder whether IB will let you open 60 positions in one day assuming you have no day trades thus far. I'm assuming it will only let you open 3 each day. So it would take 20 days to open 60?? I don't know you'd have to check the website or call them.

My head hurts and I'm going to stop thinking about this