I got a chance to play a little bit today, and it is rough to go long when the market is tracking lower and lower--you have to play the bounce. I bought 2000 shares at $6.49 and 2000 at $6.38 on the short attack after lunch, and then like a shmuck got greedy and didn't dump at $6.65 and had to exit ten pennies below. I made $440 fast money bringing the total to $1400 for two days of work, about 3.5 hours. I'm only playing with 12-25K margin, so since I never hold "naked" overnight (I like to sleep) the pattern trading just cost me some accounting issues at Scotrrade I have to watch, like making sure I have at least $25K in the account.
Then I did something you probably don't do, I played a squeeze play because I don't have time every day to do this daytrading. I bought 2000 shares at $6.45 and sold a May $6 covered call in the money for $2. I put up $3.23 for the stock on margin (50% requirement) and collected $2, so I really only have $1.23 of my money in the stock. I aim to collect $1.50 premium, which compared to my investment, is a double in 45 days.
It's just a little bet, but I want to see what happens overtime as I try to make $3100 on my outlay of about $3000 plus $100 margin interest.
Should be interesting.
1. I have a margin account.
2. I may be wrong, but you don't have to have $25000 in cash to trade multiple times, you have to have $25000 in equity, stocks, bonds, etc.
3. My last trade closes position and never holds overnight, I sell what I just bought. I am in cash at end of day, it all settles same day three days later, or instantly on margin.
4. I don't short.
5. I'm happy with a few pennies, each trade.
The identification of pattern trading is technical, it doesn't appear to make a difference in what I am, or am allowed to do, given my account is back in cash end of day.
I never short. Too dangerous. I wait for buy points in a stable no news market, and play the range.
I buy and sell 2000-4000 shares. I don't go all in, but wait and buy in increments, in case I don't pick the bottom or there is a short drive.
Five round trips cost me $70 on Scottrade. I made $995. It took about two hours of casual review. I had no losing trades.
Hey sorry if I sound novice but I was wondering if you could give me a quick run down on how a day trade account works. I use sharebuilder and some days im paying up to 4 times the $9.99 fee. They are raping me!!!!!
Setup an account with Fidelity.
Download Active Trader Pro
Open up a Margin account with $25,000 Cash.
Day trade your heart out as many times/day you want (as long as you keep $25,000 in cash in the account)
Day trade over 120/year and get $8 trades and much better rates with trades that involve lots of shares.
Each of us has a unique trading strategy that seems to work for us. I'm a swing trader that attempts to obtain a minimum of a 20% profit from each trade. With a volatile ETF like FAS, that's not very difficult. It just means that I must wait a little longer for an entry and exit point. I bought FAS back on 3/20 @ $5.05 and sold it today for $6.95. That was a gross trading profit of 37.6% in only four days. Looking back, had I sold it late in the day on the 23rd, I would have made a slightly higher return in only one day. Now I'll wait for FAS to drop back to about $6.00 before buying it again. I think that it will drop back down there before heading much higher. Of course, I could be dead wrong on this. I'll focus on the financial related news to help guide me on my future entry and exit points. I usually read the latest news on a few of the big banks to help me decide how those stocks should perform. With all of the turmoil now in the banking sector, the news can heavily impact the price of FAS. Good luck to all of you who trade. SS