Minimum to day-trade for a living: $500,000.
I respectfully find that statement absurd. At least within the context of the style that I trade. Any real good professional position daytrader should be able to triple his account at minimum. If he/she swing trades and holds 1 to3 days they can do even better. The problem with people that trade at home is that they do not see the possibilities attainable by being around other heavy hitters. I see it every day and I now trade along their same lines.
I think anybody who thinks they can quit their day job and day-trade for a living with $50,000 is dreaming.
I quit a low 6 digit income job to start trading fulltime with a 50,000.00 dollar account. In the past 4 weeks alone I have increased the account 80%. This is not meant do be bragging or anything, but rather encouragement to those out there that do not have their sights set high enough. This money was not made by a homerun play. It was made by what you would probably consider several homerun plays on multiple occasions on each and every week.
(My typical trade lasts 5 minutes and earns a point - at least the good ones!)
This explains the reasons for the high monetary requirements in your message. I think that if that is the kind of trading that fits your style, then stick with it. All methods are successful if they are in your comfort zone and make you money. BUT, if my "good" trades ONLY made me a point and lasted 5 minutes, I would also need 10 times my expenses in capital or 500,000.00. I realize from your previous post that you will not hold overnight because it causes you to lose money. That only means that holding overnite is wrong for you. The reason is because you either have been unable/unwilling to learn to trade this method effectively. Though there is nothing wrong with that. But the minimum guidelines set in your post only apply to your style of trading.
In closing I would like to say that the results that I have posted are not easily attainable. It has been very difficult for me to hold through pullbacks and certain level 2 hypnosis syndromes. The best way to learn to swing trade is to do it on small size. Once one becomes accustomed to dealing with pullbacks and starts realizing 10 to 50 point gains on a regular basis then he/she is ready to put on more size. Just today I graduated to 1000 share lots and still do not know if I will be able to handle the emotions involved. But if I do, I will now make from 10K to 50K on trades when I am right and lose from 1k to 5K when i am wrong. But the theory is that if one can do it with 100 then it is the same with 200 which is the same as 500 which is the same as 1000. The only difference is how on perceives the danger (emotion). In my office is a guy that put on 90,000 QCOM and made about 900,000 in 3 days (slow for QCOM). It is all about graduating up to the next level of emotional stamina. The risk reward never changes, just the perception does. I took 30 point out of PHCM today on only 300 shares. One day I will do it on 1000 shares. I started trading this stock on 100 shares.
One of the most valuable insights that I have learned about riding through and staying in a position is the following:
When in a position that is in the money and it starts having a major pullback after a runup and you feel the fear and are about to sale it... Ask yourself the following:
Is this the exact point where some on else (or yourself) would be bidding the stock if they (you) were not already in it??? If the answer is YES then do not sale the stock and maybe even bid in to it and add to your position. The weak hands will give you their stock to ease their pain and it is you moral duty to take it off their hands. This one tip could be the breaking point for many that almost know how to trade this way. For a real life example, look at the price action on DIGX yesterday. I had given quite a bit of my paper profits back by the end of the day and was feeling quite badly about it. So I pick up several hundred more near the close and look what happened today. In trading, often the best and only way to make money is to do exactly what makes you the most uncomfortable. If ones trading style is all to cozy and comfy then their profits surely are not. It amazes me how much correlation their is between what they teach me in church and daytrading. Particularly the part about having faith when it seems there is no hope and by doing so you will prosper. This is the key to my success in daytrading....
Hope this helps the lurkers,
OZ
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