"Day Trading" what do you need.
Discussion
I was having a chat with a few lads down the pub the other day and two of them were spouting on about the "fortunes" they are making as day traders. They are not the brightest bulbs in the box and don't seem to have the aforementioned fortune when they go out so I started asking a few questions about what they were actually doing, what tools / systems / stake etc they had and it didn't really add up to me!
Now to be fair I don't have a clue about this mythical snake oil industry so am interested to know what the real deal is so that I have some proper bulls
t deflectors on next time I am taken for a walk up the garden path 
So, what do you actually need to "day trade"
I assume a good internet connection and computer (does it need to look like those banking systems with 6 screens??? )
What sort of trading accounts do you need / should you have, and I assume you need subscriptions to information as most business news is up to 24 hours old I assume (the old saying, if the general public find out about a good investment, then the investment has been and gone already etc etc)
Am I missing anything else?
Also what do you "trade"?? Currency?? Stocks and Shares?? Pork Bellies???
And finally, how many people outside of the banking and finance world actually do make good money doing this and how many just spank their savings? I suppose it depends on the returns and acceptable risk ..
Cheers.
Now to be fair I don't have a clue about this mythical snake oil industry so am interested to know what the real deal is so that I have some proper bulls
t deflectors on next time I am taken for a walk up the garden path So, what do you actually need to "day trade"
I assume a good internet connection and computer (does it need to look like those banking systems with 6 screens??? )
What sort of trading accounts do you need / should you have, and I assume you need subscriptions to information as most business news is up to 24 hours old I assume (the old saying, if the general public find out about a good investment, then the investment has been and gone already etc etc)
Am I missing anything else?
Also what do you "trade"?? Currency?? Stocks and Shares?? Pork Bellies???
And finally, how many people outside of the banking and finance world actually do make good money doing this and how many just spank their savings? I suppose it depends on the returns and acceptable risk ..
Cheers.
As I understand it, those at the very top of the industry (with decades of experience and hundreds of millions to play with) make average gains of 10-15% a year so those who boast about making a fortune 'trading' are either more talented than the experts or are being economical with the truth. Which is more likely?
That's not to say you shouldn't invest in shares long term, as part of a balanced portfolio however short term trading is a different beast in my experience.
That's not to say you shouldn't invest in shares long term, as part of a balanced portfolio however short term trading is a different beast in my experience.
"Day trading" is no different to normal trading, you are just buying and selling in the same day (or a short period). All you need is cash to lose, and a trading account.
The spread of buy and sell prices + trading costs will eat into any profits, so much like a casino the odds of higher and lower are always stacked against you. If you don't understand the stock you are buying and selling then you might as well play roulette.
Ask your mates what returns they are getting. If its more than 20% and they can prove it, then ask them why they are not working for one of the big companies. That would put them in the top tier of traders, and they would be very rich.
The spread of buy and sell prices + trading costs will eat into any profits, so much like a casino the odds of higher and lower are always stacked against you. If you don't understand the stock you are buying and selling then you might as well play roulette.
Ask your mates what returns they are getting. If its more than 20% and they can prove it, then ask them why they are not working for one of the big companies. That would put them in the top tier of traders, and they would be very rich.
Do they look sweaty and tired? They're probably holding bad trades until they come good, averaging down etc with high leverage. It's very profitable in the short run but the market will spank their arses in due course.
NSFW: http://youtu.be/vIMwMsY0ndo
NSFW: http://youtu.be/vIMwMsY0ndo
TBH it doesn't matter how others do as that will have zero bearing on your ability. I find retail trading trickier and have taken the skills I developed to sports markets (which work on a similar principle, buy high, sell low 
and supply vs demand plus fear and greed and what's going on).
I certainly wouldn't discourage someone from trying but I advise firstly going for a demo account to get a feel for what the hell is going on and then using a small test amount (£100?) to see if you can turn that into £200 via small risk trades so maybe 50-100 trades. If you can do that, then you may have something plus you have the patience necessary to not go degen.
The likes of Alpari allow you to risk as little as 5c per pip which means a short term trade with a reasonable risk amount eg 50 pips won't cost you a lot even if you go degen and hold into the pits of hell. For instance, a 50 pip loss will cost you $2.50. And if you just cannot let it go and hold for another 950 pips you'll take a $50 hit which is frankly cheap compared what a degen noob would lose.
and supply vs demand plus fear and greed and what's going on).I certainly wouldn't discourage someone from trying but I advise firstly going for a demo account to get a feel for what the hell is going on and then using a small test amount (£100?) to see if you can turn that into £200 via small risk trades so maybe 50-100 trades. If you can do that, then you may have something plus you have the patience necessary to not go degen.
The likes of Alpari allow you to risk as little as 5c per pip which means a short term trade with a reasonable risk amount eg 50 pips won't cost you a lot even if you go degen and hold into the pits of hell. For instance, a 50 pip loss will cost you $2.50. And if you just cannot let it go and hold for another 950 pips you'll take a $50 hit which is frankly cheap compared what a degen noob would lose.
Edited by Hoofy on Sunday 30th March 12:54
Condi said:
You need discipline and luck. Most people have too much of the second and not enough of the first.
....and a terminal close to the bathroom.One of the most important qualities is to be realistic about how smart you are. (or aren't)
Know your limitations and trade accordingly.
And of course don't trade into a bell curve, or you'll be left with the washing up without partaking of the meal.
Condi said:
You can still trade hogs (pigs) though.
Yes, I know that. 
I spent a while wondering where the hell pork bellies were in the meat list. http://www.investing.com/commodities/meatsSo OP excluding all the bullst generalisations from people not in the know (Hoofy excluded) there are a few things that they will definitely need, but these are approximate depending on what type of trading they are doing.
Fast internet (well fast for Thailand, general uk broadband speed should be enough).
A spread betting account or level one access provided through a trading arcade.
A real-time charting package, but I think there may be free ones now, if not they cost $500-$1000 a month.
A computer, or 2, with 2 to 20 screens depending on what you are doing.
A trading pot for margin - this could be as little as £10k.
That's about it. They will need to know how, or learn how, to trade but that is about all. The talk above or 20% returns etc etc is bullst. Day trading very often involves leveraged products hence why it lends itself to high frequency (not HFT) day trading. We returned 600% of our average daily margin last year.
Also the talk of "high costs" is crap too as when you are leveraged the trading costs pale into insignificance when compared to the potential profit/loss.
Essentially without looking at their profit/loss statement you'll never know what they are making, but I remember a phrase an old boss said to me "There are a load of people in the city on the money of a window cleaner just so they can say they are a trader" and I found it to be very true (less so post the crash though).
What age are these guys? If they have moved out long term to Thailand it would suggest that they wanted somewhere cheaper to live. If they had a proper pot of cash why not Monaco? Or Dubai? Lots of people under and over exaggerate about a lot of stuff, but unfortunately with trading there is no way find out until you see their statements. As a good example a friend of a friend bought a house a couple of years ago and it was quite lumpy. We thought he was mortgaged up to his neck after having quite a good year in the markets, we guessed about £3-4m. Turned out someone saw his statement and he made £14m! Unless you see it in black and white from the clearer you'll never really know.
t generalisations from people not in the know (Hoofy excluded) there are a few things that they will definitely need, but these are approximate depending on what type of trading they are doing.Fast internet (well fast for Thailand, general uk broadband speed should be enough).
A spread betting account or level one access provided through a trading arcade.
A real-time charting package, but I think there may be free ones now, if not they cost $500-$1000 a month.
A computer, or 2, with 2 to 20 screens depending on what you are doing.
A trading pot for margin - this could be as little as £10k.
That's about it. They will need to know how, or learn how, to trade but that is about all. The talk above or 20% returns etc etc is bulls
t. Day trading very often involves leveraged products hence why it lends itself to high frequency (not HFT) day trading. We returned 600% of our average daily margin last year. Also the talk of "high costs" is crap too as when you are leveraged the trading costs pale into insignificance when compared to the potential profit/loss.
Essentially without looking at their profit/loss statement you'll never know what they are making, but I remember a phrase an old boss said to me "There are a load of people in the city on the money of a window cleaner just so they can say they are a trader" and I found it to be very true (less so post the crash though).
What age are these guys? If they have moved out long term to Thailand it would suggest that they wanted somewhere cheaper to live. If they had a proper pot of cash why not Monaco? Or Dubai? Lots of people under and over exaggerate about a lot of stuff, but unfortunately with trading there is no way find out until you see their statements. As a good example a friend of a friend bought a house a couple of years ago and it was quite lumpy. We thought he was mortgaged up to his neck after having quite a good year in the markets, we guessed about £3-4m. Turned out someone saw his statement and he made £14m! Unless you see it in black and white from the clearer you'll never really know.
All very well and good for the big boys, but that is a lot of initial capital to put together for someone starting out. A Bloomberg terminal is about £2.5k a month is it not? Okay, go cheaper and you can get it for a lot less. We pay about $500 for our software, but only trade ags and the news wire on it is a bit crap. To upgrade that to something you would need for day trading and you can add another $750. The computer to run it off is likely to be £1500 minimum. And as for the costs involved, it depends on the spread you're playing. If the spread is wide then it'll quickly eat into what you take home. Potential profits are no use to anyone...
Not saying your wrong, but your coming at it from one direction. I think the OP is looking at it from totally the opposite viewpoint.
Not saying your wrong, but your coming at it from one direction. I think the OP is looking at it from totally the opposite viewpoint.
XJSJohn said:
I was having a chat with a few lads down the pub the other day and two of them were spouting on about the "fortunes" they are making as day traders. They are not the brightest bulbs in the box and don't seem to have the aforementioned fortune when they go out so I started asking a few questions about what they were actually doing, what tools / systems / stake etc they had and it didn't really add up to me!
Now to be fair I don't have a clue about this mythical snake oil industry so am interested to know what the real deal is so that I have some proper bullst deflectors on next time I am taken for a walk up the garden path
So, what do you actually need to "day trade"
I assume a good internet connection and computer (does it need to look like those banking systems with 6 screens??? )
What sort of trading accounts do you need / should you have, and I assume you need subscriptions to information as most business news is up to 24 hours old I assume (the old saying, if the general public find out about a good investment, then the investment has been and gone already etc etc)
Am I missing anything else?
Also what do you "trade"?? Currency?? Stocks and Shares?? Pork Bellies???
And finally, how many people outside of the banking and finance world actually do make good money doing this and how many just spank their savings? I suppose it depends on the returns and acceptable risk ..
Cheers.
ask them after 5 years how they're doing , short term its not too hard to show a profit , the trouble is consistently coming out on top. I contemplated stopping work to trade full time , but decided I was better off keeping the guaranteed income and all that goes with it from my employer.Now to be fair I don't have a clue about this mythical snake oil industry so am interested to know what the real deal is so that I have some proper bulls
t deflectors on next time I am taken for a walk up the garden path So, what do you actually need to "day trade"
I assume a good internet connection and computer (does it need to look like those banking systems with 6 screens??? )
What sort of trading accounts do you need / should you have, and I assume you need subscriptions to information as most business news is up to 24 hours old I assume (the old saying, if the general public find out about a good investment, then the investment has been and gone already etc etc)
Am I missing anything else?
Also what do you "trade"?? Currency?? Stocks and Shares?? Pork Bellies???
And finally, how many people outside of the banking and finance world actually do make good money doing this and how many just spank their savings? I suppose it depends on the returns and acceptable risk ..
Cheers.
re what you trade - anything thats moving quickly in my case
expect to 'spank your savings' a few times before you learn the ropes , most do!
I used two pc's and 6 screens and spent from 7am until 21.30 every week day in an office at home a lot of the time.
good luck you'll need it
met up with them last night, was an interesting chat when a bit wiser and able to talk some jargon ....
I suspect that these lads are a bit like casino gamblers, the talk all about the wins, but don't mention the loses!
Cheers, and some interesting responses too ....
also, I never realized that Pork Bellies were actually a traded commodity, always thought that was just a Hollywood joke
I suspect that these lads are a bit like casino gamblers, the talk all about the wins, but don't mention the loses!
Cheers, and some interesting responses too ....
also, I never realized that Pork Bellies were actually a traded commodity, always thought that was just a Hollywood joke
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