Day trading

Author
Discussion

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
Started my learning curve today with stock picking,both day trading and for long term.
I chose HL as after I had a chat with them last night I was satisfied that they answered the phone quickly and the guy I spoke to was very pleasant and helpful.
One thing I found annoying was that even when logged in to my account if I wanted to deal shares I then had to enter more passwords etc before I could actually buy them and in that 30 seconds the price moves,how can I get around that ?
Purchased a slug of shares in a company I know well,if I'd bought them when I fancied them 4 years ago I would have made x10 my investment.
But I do realise that when fantasising you always remember the winners you never bought and forget the losers.
I am wondering how you can make a decent return day trading as any purchase over £1000 attracts a 0.5 % stamp duty plus the dealing costs.
So unless your picking penny stocks or loadsa money how does it work for you ?

R8Steve

4,150 posts

174 months

Tuesday 9th August 2016
quotequote all
Aim shares (which are most popular for day trading) don't attract stamp duty.

I've not noticed the issue with the password buying/selling shares to be honest, if you are looking to take advantage of a certain price just log in a bit earlier with the deal you are looking to do and refresh the trade. That way you don't have to put your password in again. Even AIM shares shouldn't change that much in 30 seconds though.

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
R8Steve said:
Aim shares (which are most popular for day trading) don't attract stamp duty.

I've not noticed the issue with the password buying/selling shares to be honest, if you are looking to take advantage of a certain price just log in a bit earlier with the deal you are looking to do and refresh the trade. That way you don't have to put your password in again. Even AIM shares shouldn't change that much in 30 seconds though.
I thought that the market in AIM shares was not that liquid and that might be a problem when selling ?
Yesterday you said you had a few issues with HL,what are they ?
Thanks for the advise Steve,I appreciate it.

walm

10,609 posts

201 months

Tuesday 9th August 2016
quotequote all
Why on earth are you day trading?
Are you mad?
Even without stamp duty trading costs will destroy any returns.
And even without trading costs you will lose money.

Just look for any research online about the viability of part-time day trading.

Literally you are giving your money away.

If you believe that a complete novice can somehow make a fortune day trading (which is what your actions imply) then why on earth wouldn't EVERYONE be doing it???

R8Steve

4,150 posts

174 months

Tuesday 9th August 2016
quotequote all
Some can be illiquid but the majority will allow you to buy/sell no problem unless you're dealing in massive quantities. They also provide the biggest gains (and drops!) so are generally good for day trading.

Issues with HL have been systems going down (always at key moments of course!), an issue with a limit sell and one occasion of transferring funds incorrectly and tying up a significant amount of capital when I needed it.

In spite of that, as I'd mentioned on your other thread, I do like them and they are definitely the best out there IMO.

Good luck with your trades. smile

Ozzie Osmond

21,189 posts

245 months

Tuesday 9th August 2016
quotequote all
walm said:
Why on earth are you day trading? Literally you are giving your money away.

If you believe that a complete novice can somehow make a fortune day trading (which is what your actions imply) then why on earth wouldn't EVERYONE be doing it???
^^^ OP, my own thoughts are much the same as Walm. Proceed with caution, if at all.

Here in the Finance forum there are a fair number of "investors" as opposed to "traders". What's the difference? Investors will usually be looking for returns in the medium to longer term, say 5 to 10 years, so will not get in a flap if something they have bought drops by 10% in the first 3 months.

If you want a fairly extreme example of Investing,
  • A "commodities" fund had been trading at about £5.00 in 2012
  • By 2014 it was at £3.50 and I thought, "I'll buy me some of that, it's bound to go back up again".
  • It went on falling to £2.50 so I bought some more. This takes bottle when you've already lost 30% of your money. But if you believe commodities are a good long term bet then it's the logical, if difficult, thing to do. Namely, putting your money where your mouth is.
  • As of this week the fund is finally back up at £3.25 giving me overall a roughly break-even position. Phew.
  • Now I sit tight for the long term profit - Hopefully!

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
walm said:
Why on earth are you day trading?
Are you mad?
Even without stamp duty trading costs will destroy any returns.
And even without trading costs you will lose money.

Just look for any research online about the viability of part-time day trading.

Literally you are giving your money away.

If you believe that a complete novice can somehow make a fortune day trading (which is what your actions imply) then why on earth wouldn't EVERYONE be doing it???
Hi Walm....I'm not day trading....just feeling my way...you'll know from previous comments I've made that I only commit in business if my experience tells me I have an edge,and I certainly don't feel that in the stock market.
It's taken me only the past 10 years to picking individual stocks rather then funds.
At the moment I'm only picking shares in companies whose business model I understand.
Just got pissed of with the fund management charges,low bank rates,and the toppy property market.
So I've done my deal for the moment,I'll have to do my research on a couple of other companies and go from there.


avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
Ozzie Osmond said:
^^^ OP, my own thoughts are much the same as Walm. Proceed with caution, if at all.

Here in the Finance forum there are a fair number of "investors" as opposed to "traders". What's the difference? Investors will usually be looking for returns in the medium to longer term, say 5 to 10 years, so will not get in a flap if something they have bought drops by 10% in the first 3 months.

If you want a fairly extreme example of Investing,
  • A "commodities" fund had been trading at about £5.00 in 2012
  • By 2014 it was at £3.50 and I thought, "I'll buy me some of that, it's bound to go back up again".
  • It went on falling to £2.50 so I bought some more. This takes bottle when you've already lost 30% of your money. But if you believe commodities are a good long term bet then it's the logical, if difficult, thing to do. Namely, putting your money where your mouth is.
  • As of this week the fund is finally back up at £3.25 giving me overall a roughly break-even position. Phew.
  • Now I sit tight for the long term profit - Hopefully!
Thanks for your comments.
I would really like to sit down with somebody that either works in the markets or understands how they operate,if only to gain some real knowledge.
For me that would be more worthwhile than reading books with the graphs and technical analysis.
Breaking my virginity today has taught me a lesson.
The only real advise I've seen,that chimes a bell with me,is to spread the risk,over a basket of shares,common sense really.

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
contango said:
Other than having to start somewhere and dipping your toe in the water, what made you buy the stock you purchased.

Seasoned market participant, who is not doing much this week,,,, this and the next week are known for low liquidity. If you look back over the last few years there have been significant moves in mid August.
Partly because many people are away on holiday and those manning the desk have less experience, moves and volatility are magnified by thin volume, that tends not to make too many people smile when they get back from their break...... it feels more quiet than threatening this year....so far! smile
I have been wanting to get into the company for a long time,just been too tied up in my own business and life generally to get around to it.
As you know immediately after Brexit a lot of shares fell some picked up fairly sharpish.
I should have got in then but I was not prepared.
However the shares are trading circa 18% of their high of a year ago, looking to keep it long term.
The business has an excellent trading model and I obviously believe it's a fair bet,however nothing's for sure.
The money I'm investing in picking shares is only a reasonable proportion of my capital.

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
contango said:
What you say sounds reasonable, however, I am left confused by the "Day trading" thread title, if you intend to hold the stock for some time. I assume you have used an ISA allowance, if it is more a long term holding?

Day trading, short term and investing are completely different applications, apart from trading metrics you need to grasp, there are also the emotional and cognitive bias to consider when trading different periods.
,ho,ho ,ho...you may well ask.
Yesterday I started a Topic with the heading Share Dealing and it got little response apart from a guy called Steve and I'm grateful to him
So today I needed some advise and thought I needed a sexier Topic heading that might grab more attention and thankfully it's worked,a bit like MAN BITES DOG.
Anyway I was contemplating,in my virginal innocence, having a go at day trading but I soon realised that stamp duty and charges would probably knock out any gains.
Although I'm aware of its existence,I have not researched the Aims market,where one PHer suggested I could trade without stamp duty,so for the moment I'll keep my powder dry.

av185

18,433 posts

126 months

Tuesday 9th August 2016
quotequote all
Very difficult to make any serious money from day trading stock. My advice would be to hold a 'quality stock' for up to a month with the hope of making better returns.

Hargreaves do not charge for fund trading but are relatively expensive for stocks and shares trading. I trade funds on momentum and this has proved far more successful as a technique.

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
contango said:
What you say sounds reasonable, however, I am left confused by the "Day trading" thread title, if you intend to hold the stock for some time. I assume you have used an ISA allowance, if it is more a long term holding?

Day trading, short term and investing are completely different applications, apart from trading metrics you need to grasp, there are also the emotional and cognitive bias to consider when trading different periods.
"Trading metrics "....,,,,"Emotional and cognitive bias" ......what's that all about ......?
I've been in business all my life and what I do is look at an item and say to myself...."How much will my customer pay for that " and if I can see my margin I'm in.
Re bitcoins ,which to me are unfathomable hocus pocus.
I read that there's been some fraudulent activity that's resulted in a 36% loss of value.
What's that all about ?

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
av185 said:
Very difficult to make any serious money from day trading stock. My advice would be to hold a 'quality stock' for up to a month with the hope of making better returns.

Hargreaves do not charge for fund trading but are relatively expensive for stocks and shares trading. I trade funds on momentum and this has proved far more successful as a technique.
Thank you for the advice.

avinalarf

Original Poster:

6,438 posts

141 months

Tuesday 9th August 2016
quotequote all
contango said:
Ok.....

Good luck with this..... having spent some time trading /investing professionally and also teaching in house investment bank grad training programs, I would honestly say you need to take your time, read and learn the market.
Aim is not for the feint hearted, despite apparent tax advantages.... You need to work out your goal and risk appetite. Aim is a market where a novice is likely to take any profit too soon and likely lose more than anticipated too often. I seriously wouldn't suggest anyone start trading there with limited market knowledge, this is PH and everyone day trades to keep the supercar in V nitro+.

Don't expect this to be easy, if you jump into trades sectors with bad risk/return profiles, you may well be disheartened losing your money, where as a steadier start will help you see opportunity when it is there, which is probably not as often as you hope.

As I say, having worked with new traders and investors, your initial approach is not inspiring too much confidence, which is actually meant to be helpful rather than a criticism.
Thanks Pete,I appreciate your advice.
I don't not expect to day trade any time soon ,if ever.
I will however try to extend my knowledge on the subject although reading your previous post the theory sounds a bit daunting.


jonamv8

3,145 posts

165 months

Tuesday 9th August 2016
quotequote all
Why aren't you spread betting?

greygoose

8,225 posts

194 months

Tuesday 9th August 2016
quotequote all
I think the thread title is a bit misleading, as someone who dabbles in shares as a hobby rather than expecting to get millions I would say go for shares that pay steady dividends and reinvest them.

Spread betting is risky for a novice in my opinion.

jonamv8

3,145 posts

165 months

Tuesday 9th August 2016
quotequote all
greygoose said:
I think the thread title is a bit misleading, as someone who dabbles in shares as a hobby rather than expecting to get millions I would say go for shares that pay steady dividends and reinvest them.

Spread betting is risky for a novice in my opinion.
So are shares tbh.

Spread with stop losses based on your strategy and you won't end up blowing the house, just retain some self control and don't go 50 per pip on the Dow.

OP sounds a reasonably business man with respect for money. Spread allows great flexibility to test many instruments

R8Steve

4,150 posts

174 months

Tuesday 9th August 2016
quotequote all
jonamv8 said:
Why aren't you spread betting?
I'd say spread betting is seriously more risky than buying physical stock if you don't know what you're doing.

You should definitely listen to the many words of caution but the fact that you've done dummy trades to test your knowledge shows that you've done more research than most.

To say you'll definitely lose money is perhaps a bit harsh (if not statistically likely) but that doesn't mean you need to be another statistic. Just take things slow with a reasoned calm head and research as much as you can. Proper research though, not reading forums and getting yourself into a 'sure winner' and getting overexposed on 'golden tickets' on the back of Internet hype.

I'm happy to go over the basic strategy with you via pm if you want but I can't give you any stock tips (not to be arsey about it, just because I can never give any guarantees)

avinalarf

Original Poster:

6,438 posts

141 months

Wednesday 10th August 2016
quotequote all
The comments that you gents have made,added to my own feelings on the matter,have given me food for thought.
Breaking it down,whilst attempting not to oversimplify,it is apparent that the skills required for investing are often quite different than day trader.
An investor will research a company,study the balance sheet,where the company stands in the market place,how attractive it's "offer"is,the strength of its "brand" to access whether it's worth getting into,the Warren Buffet approach.
The "serious "day trader would need to have a different set of skills which would include a mathematic analysis of the market place and how underlying trends might affect share movements,in a short space of time.
I can also see that the "mindset"required and his appetite for risk are also important factors.
I read topics by guys on this forum that say " I've got a few bob that I don't know what to do with" so I'll do some day trading".
They then say "I don't care too much if I lose my stake".
That's absurd,doing business should only be about making a profit otherwise you might just as well just go to a Casino.

freshkid

199 posts

191 months

Wednesday 10th August 2016
quotequote all
But if you enjoy it more than going to a casino...and you learn something at the same time...what does it matter?