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.
Wednesday, March 25, 2009
My Non-Day Trading Experiment - The 1st Buy
Today my mockfolio (mock-portfolio) received its first entry. My buy order (aka alert that my stock hit its target buy price) for Sprint was triggered. The mock-buy was for 1408 shares at $3.55. With a trade fee of $12.00 this means my first investment totals $5010.40.
Next step: sell at $4.0825 (I'll round up to $4.09.)
As for my watchlist:
Next step: sell at $4.0825 (I'll round up to $4.09.)
As for my watchlist:
- Las Vegas Sands (LVS) - is overbought. I am waiting for it to cross into oversold territory before placing a buy.
- Freddie Mac (FRE) - is headed toward oversold but I am still waiting for it to cross into actual oversold territory before placing my mock buy.
- Dryships (DRYS) - is still lingering in overbought territory near 80%. I have no idea what this means for my trading experiment so I'm playing dead for the moment.
Note: I am evaluating: AMD, SLM, LSI, AKS, Q and ELN for possible additions to my watchlist.
My Non-Day Trading Experiment - Day 2
Going into Day 2 of My Non-Day Trading Experiment, I have 4 stocks that I am watching, Sprint (S), Las Vegas Sands (LVS), Freddie Mac (FRE) and Dryships (DRYS). My plan is to mock-invest $5000 in each trade toward a gain of at least 15% within 2 weeks. I am assuming a high fee of $12 per trade (for each buy and each sell). It's on the high side, but my goal is to portray the most reliable returns by being conservative on the gains and generous on the costs.
Utilizing the stochastic charts and their current trading patterns, this is where I stand on each:
- Sprint (S) - is approaching a buy, meaning it is headed toward oversold on the stochastic charts. I have placed a mock-buy in the form of an alert at $3.55. If I receive an alert that Sprint has hit that mark, I will revise my experimental portfolio to read that I have purchased 1408 shares of Sprint at $3.55 with a trade fee of $12.00.
- Las Vegas Sands (LVS) - is currently overbought on the stochastic charts. I am waiting for it to cross into oversold territory before placing my mock buy.
- Freddie Mac (FRE) - is approaching oversold on the stochastic charts. I am waiting for it to cross into actual oversold territory before placing my mock buy.
- Dryships (DRYS) - is lingering in overbought territory near 80%. I have no idea what this means for my trading experiment so I'm playing dead for the moment.
Tuesday, March 24, 2009
My Non-Day Trading Experiment
With the market appearing to turn around, I have decided to embark upon an experiment and take anyone who is interested along for the ride.
Day trading is intriguing to me. I do not, however, believe I have the stomach for it. The risk is substantial and, having tested it to some mild degree with absolutely no success, I am convinced it is not something I am supposed to do.
That said, frequent, non-day trading might very well be my speed. In fact, I have been watching a few stocks that appear to be forming patterns. They have a broad enough range that it may be possible to profit from their existing cycles (the good old, buy low/sell high strategy).
I am specifically looking for stocks with strong patterns, a 15% or more spread and significant volume. At the moment they include Sprint, Dryships, Freddie Mac and and Las Vegas Sands Corporation. I have set them up in a test portfolio and will add and subtract stocks as I further evaluate them. I will also use alerts to place mock trades while I test my theory.
I would love input and feedback as I go. Please comment freely.
My first mock trade -- Buy Sprint at $3.55. (If the buy happens I will place a mock sell at $4.08.)
Day trading is intriguing to me. I do not, however, believe I have the stomach for it. The risk is substantial and, having tested it to some mild degree with absolutely no success, I am convinced it is not something I am supposed to do.
That said, frequent, non-day trading might very well be my speed. In fact, I have been watching a few stocks that appear to be forming patterns. They have a broad enough range that it may be possible to profit from their existing cycles (the good old, buy low/sell high strategy).
I am specifically looking for stocks with strong patterns, a 15% or more spread and significant volume. At the moment they include Sprint, Dryships, Freddie Mac and and Las Vegas Sands Corporation. I have set them up in a test portfolio and will add and subtract stocks as I further evaluate them. I will also use alerts to place mock trades while I test my theory.
I would love input and feedback as I go. Please comment freely.
My first mock trade -- Buy Sprint at $3.55. (If the buy happens I will place a mock sell at $4.08.)
Wednesday, March 11, 2009
My Ulterior Motive
I've been doing a lot of cleaning these days. My house isn't clean by any means. I could scrub 'til my back gave out for good and nobody would notice the difference.
I do seem to get some appreciation, however, when I give things away. A few weeks ago I joined my local freecycle. It's Craig's list meets the Salvation Army -- but free. I've become obsessed.
I'm now purging things, like cell phones and pet crates, that seemed like odd charitable donations. I knew they should go to someone but wasn't exactly sure who that someone was. They have finally gone to happy homes, I no longer have them under foot and I actually feel appreciated for the effort, albeit from perfect strangers. Now I obsess about being appreciated.
In search of my next fix, it occurred to me that I have more to share than the junk that clutters my home. You see, I am also a research junky and one of my favorite topics (yes, another fixation) is real estate foreclosures, well that and tax liens, buying investment properties... I could go on for days. Suffice it to say I like all things real estate (and the stock market... but I'll try to reign myself in on that topic, for now).
I have stumbled my way across the net and accumulated a great deal of information that others might find useful. After all, it's not like I can run out and buy every amazing real estate deal out there. Honestly, if I can come up with the cash to invest in just one of the treasures out there, I will be happy enough (for now). In the meantime, perhaps a few shares will be appreciated.
Before I do, though, I thought I should clarify my endeavor with a promise: I will never direct you to a site where you are asked to pay for information. After all, I don't pay for it. That's the whole point; it should be free.
So, to all of the other real estate investor hopefuls out there, I wish you happy hunting. And please, share any tidbits of your own. It is fun to be appreciated.
Sincerely, Obsessed
I do seem to get some appreciation, however, when I give things away. A few weeks ago I joined my local freecycle. It's Craig's list meets the Salvation Army -- but free. I've become obsessed.
I'm now purging things, like cell phones and pet crates, that seemed like odd charitable donations. I knew they should go to someone but wasn't exactly sure who that someone was. They have finally gone to happy homes, I no longer have them under foot and I actually feel appreciated for the effort, albeit from perfect strangers. Now I obsess about being appreciated.
In search of my next fix, it occurred to me that I have more to share than the junk that clutters my home. You see, I am also a research junky and one of my favorite topics (yes, another fixation) is real estate foreclosures, well that and tax liens, buying investment properties... I could go on for days. Suffice it to say I like all things real estate (and the stock market... but I'll try to reign myself in on that topic, for now).
I have stumbled my way across the net and accumulated a great deal of information that others might find useful. After all, it's not like I can run out and buy every amazing real estate deal out there. Honestly, if I can come up with the cash to invest in just one of the treasures out there, I will be happy enough (for now). In the meantime, perhaps a few shares will be appreciated.
Before I do, though, I thought I should clarify my endeavor with a promise: I will never direct you to a site where you are asked to pay for information. After all, I don't pay for it. That's the whole point; it should be free.
So, to all of the other real estate investor hopefuls out there, I wish you happy hunting. And please, share any tidbits of your own. It is fun to be appreciated.
Sincerely, Obsessed
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