I'm not sure I'm remembering this entirely correctly but you can daytrade using a cash account as long as you don't use today's profits tomorrow on the same stock. I know that sounds like BS, but it's SEC regulations (although, as I said above, I'm not sure I've got it 100% correct). When I was trading pennies, I never used all the money in my account at one time. I made sure that the cash left over was at least as much as I made the day before. Someone at Webstreet should be able to explain it to you so that you're never in danger of getting hit with a 90 day suspension.
Also, I found that I often made more money by holding for a few days rather than selling at the end of each day. Pennies have changed slightly. MMs used to show size as 999x999. That usually gave you plenty of time to sense the direction. Now they limit size to 50x50, so you've got to act faster. Spreads seem so tight I'm not sure how you plan on daytrading them. I made steady money on BICO by buying 1/256 above the bid and selling 1/256 below the ask (Webstreet said no MM would ever fill my orders, but they did time after time). That was when the spread was around 2 cents. Now the spread is 1/10 of one cent. There's nothing to split.
OTOH, if you find pennies that have a good yearly range, you can make 1000% if you're patient. By patient I mean you wait until the stock is towards its yearly low before you buy. Then wait until it reaches some decent multiple of what you paid before you sell. This could take many months. BICO, for the last two years anyway, always shoots up in late Spring, early Summer. It doesn't last long, though, so you've got to be ready for it. If it hits 3 cents, I'm in. When (if) it hits 30 cents I'm out. On 1 million shares, that's not bad. It's not bad on 100,000 shares either (I'm not suggesting anyone follow my example. I'm just as blind as anyone else. Sometimes I just get lucky). You don't have the daily excitement of daytrading. But I'll stick with what works for me over losing my money to constant excitement.
If you have a technique that's been working, I'd be interested in hearing it.
Regards,
Paul Kaz |
