My first mock-buy of 1408 shares of Sprint (3/25) sold at it's target price of $4.09 today, yielding $5,746.72 (figuring in a commission of $12.00). Therefore my first "trade" made a profit of $748.32.
That makes one 15% trade completed in just over a week, technically in six trading days. Now to find the next trade.
Thursday, April 2, 2009
Sunday, March 29, 2009
What Makes an Investor a Day Trader?
Since my experiment is based on frequent trading, it occurred to me that it might be worthwhile to address the term "day trader."
Many who use the term day trader are talking about a person who invests short term, or even ultra short term, with no intention of retaining a stock for the long haul. There is, however, a technical definition. An investor is considered a day trader if they buy AND sell the same stock on the same trading day 4 or more times within a 5 day period AND if this type of trading constitutes 6% or more of the investor's trading activity.
To see the NYSE definition of day trader go to: http://www.nyse.com/pdfs/im01-9Microsoft%20Word%20-%20Document%20in%2001-9.pdf
An investor who can be technically defined as a day trader can be officially classified as such by the industry and will be required to meet additional criteria for maintaining their investment accounts. This includes maintaining a minimum account balance (equity) of $25,000.
Needless to say, dabbling in real day trading not only requires a strong stomach but a healthy wallet.
Many who use the term day trader are talking about a person who invests short term, or even ultra short term, with no intention of retaining a stock for the long haul. There is, however, a technical definition. An investor is considered a day trader if they buy AND sell the same stock on the same trading day 4 or more times within a 5 day period AND if this type of trading constitutes 6% or more of the investor's trading activity.
To see the NYSE definition of day trader go to: http://www.nyse.com/pdfs/im01-9Microsoft%20Word%20-%20Document%20in%2001-9.pdf
An investor who can be technically defined as a day trader can be officially classified as such by the industry and will be required to meet additional criteria for maintaining their investment accounts. This includes maintaining a minimum account balance (equity) of $25,000.
Needless to say, dabbling in real day trading not only requires a strong stomach but a healthy wallet.
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