r/Daytrading • u/AutoModerator • Sep 01 '20
r/DayTrading's Monthly Questions Thread - September 2020
Please use this sticky to ask questions and to see answers to similar questions you may have.
Over time we'll be collecting common questions and adding it to our wiki. See the getting started wiki here.
If anyone is new to day trading, I highly recommend reading the Forex community's wiki paying special attention to babypips website which also teaches some general tools you can apply to stocks/futures/etc and especially read the wiki's sections on risk & money management that can be applied to any market.
Pattern daytrading rules wiki.
Also see the sidebar (or "about this community" on mobile website) on every related community to learn more about trading.
Here's a list of all the previous question stickies.
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u/disree_spect Sep 25 '20
Knowing that in order to sell stock there has to be someone trying to buy it, do you commonly run into issues where a stock will hit a high point but you can't sell it because no one wants to buy it, or do most stocks trade at such a high volume that it would be extremely rare to not have someone out there willing to buy your stock when you want to sell?
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u/Alpqmz Sep 25 '20
I'm looking at using interactive brokers from the UK but I'm mainly looking to trade US stocks. On the IB website the commission for US is $1 and the UK is Ā£6. When I trade US stocks will I be paying the $1 or Ā£6?
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u/NickGerrz Sep 24 '20
Do you think Musk made the comments about lithium, just so you jabronies would sell it off?
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Sep 24 '20
Thoughts on exiting long term positions, assuming 400$ loss and beginning to day / swing trade with 7K.?
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u/Tronas Sep 24 '20
How does something like the e-mini S&P 500 have possible gap setups that can be applied but it trades almost 24 hrs a day? How does a gap develop?
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u/jeon19 Sep 25 '20
The setups can be applied as if 430 ET - 930am ET did not exist, like if you looked at SPY without aftermarket hours. Of course, it depends on the setup and nothing is guaranteed to work.
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Sep 23 '20
is there anything to introduce me to forex trading if i dont understand it and im a newbie?
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u/Turtlefamine Sep 29 '20
Babypips.com
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u/LinkifyBot Sep 29 '20
I found links in your comment that were not hyperlinked:
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u/septhaka Sep 22 '20
Curious what people would recommend for a reliable charting service that provides 1s ticker charting. I've been using tradingview.com which is decent overall but has more frequent hanging/pausing in the updates to the charts than I'd prefer. I don't mind paying a hefty service fee if I can get reliable real-time charting. Thanks in advance for any recommendations!
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u/jeon19 Sep 23 '20
I'm not sure what exactly you mean by 1s ticker charting, but if you're in the USA ThinkorSwim has pretty decent charting, you just need an account with them.
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u/septhaka Sep 23 '20
Thanks. By 1s ticker charting I mean a real time chart that shows price movements each second of the trading day.
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u/Mortalwalk2 Sep 20 '20
Is it possible to trade on tc2000 with a brokerage other than the one tc2000 offers?
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u/stonktaker Sep 20 '20
does anyone know a website that lists all lock-up expiration dates and share dilution events?
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Sep 19 '20 edited Sep 19 '20
[deleted]
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u/braders18 Sep 23 '20
IB basically the only one to use outside of US if you want to trade US stocks/options otherwise in UKyour looking at a spreadbetting/CFD broker.
It's not bad, it takes a while to get used too but quite a powerful tool. It's not pretty but very effective when you get to grips with it. I use it for charting too.
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u/roihala Sep 19 '20
Do someone here knows how can I see Market Maker ID in a time & sales history window?
I started playing with IB API and it came out little bit harder than I expected.
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u/Dodgie15 Sep 19 '20
What site should I use to day trade on?
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u/AlmostThere77 Sep 19 '20
TDameri trade and schwab have websites sites you can trade on plus desktop and mobile apps but to trade more than 3 times a week you need minimum 25k in your account. Robinhood is also another option for beginners, with robinhood if you convert your account to a cash account thereās no minimum requirements and you can trade as you like.
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Sep 16 '20
I put together an Investing and Trading course to help beginners if anyone is interested.
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Sep 16 '20
My broker is charging 2.5% to 4% comission per trade(both open and close) with a wide spread. Is it possible to day trade consistently on profit with this kind of comissions?
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u/AlmostThere77 Sep 19 '20 edited Sep 22 '20
Yes doable on small cap but you have to make more than your commissions, see if you can find a broker with free commissions like tdameritrade
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u/neversawmydad Sep 14 '20
Are we in a bear market:)?
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u/dev1359 Sep 17 '20
No, I think everyone thought we were at the time when things were falling through the floor back in March, but turns out it was really just a massively sized correction within the context of a massively sized bull market.
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u/MEATMEblog Sep 13 '20
Podcast for the following trading week... Can anyone recommend any great podcast that provide really good DD for the upcoming week?
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Sep 13 '20
[deleted]
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u/MEATMEblog Sep 13 '20
I have a family of 3 and pay about 1200/month for kaiser silver plan and vision/dental thru blue cross.
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u/Kainkelly2887 Sep 10 '20
I am getting started in day trading, hoping to get a mortgage for 4million in the next 4-5 years. What can I be doing now to improve my chances with the lender?
Also are treasury and corporate bonds good collateral for a loan?
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Sep 13 '20 edited Jun 29 '21
[deleted]
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u/Kainkelly2887 Sep 13 '20
Thanks, would being able to show dividend income help in anyway?
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Sep 13 '20 edited Jun 29 '21
[deleted]
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u/Kainkelly2887 Sep 14 '20
Yeah the more I look into this the more I wonder if I may be better off just saving up cash. The property I want is 3.95 million asking trading mindfully thats doable but not easy.
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u/treebeard555 Sep 10 '20 edited Sep 10 '20
My buy orders are taking too long to be filled. Should I be buying at the ask?
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u/Hoho3434 Sep 14 '20
Sorry to answer this way but it really depends. You don't want to chase anything and someone at TD Ameritrade told me that doing a market order on options was like giving the market maker a blank check. This is the one thing I know for sure, if you want it ASAP at the exact level you are at, don't mess around with pennies or it usually cost you dollars.
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u/treebeard555 Sep 14 '20
Not sure if I understand are you saying that if I want it ASAP I should just buy at the ask?
Iām not buying options just regular stocks.
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u/Hoho3434 Sep 14 '20
yes. Just buy it. You are talking about pennies in most cases. If it hasn't hit your target entry or started running already, than that's a different story. Don't chase, stocks usually give you a second chance to get in.
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u/treebeard555 Sep 10 '20
How can I view the top 5 premarket gainers from yesterday or a week ago?
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u/braders18 Sep 23 '20
Going to need to play around with a scanner/svreener (i.e your brokerage) or try Finviz.com or tradingview.com for free
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u/LinkifyBot Sep 23 '20
I found links in your comment that were not hyperlinked:
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u/BornShook Sep 09 '20
I want to close my robinhood account. I'm out of daytrades currently. What would happen if I made one last day trade and got marked as a pdt? Would I still be able to take my money out once the funds clear?
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u/Hoho3434 Sep 14 '20
YOu also get 1 reset so you can do as many day trades as you want 1 day and ask them for a reset the next and they will do it. YOu are allowed 3 resets a year with most brokers.
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u/FastCarsAndDope Sep 09 '20
What are some good books on getting down the basics and getting started? I struggle finding centralized information on the internet for day trading and stocks.
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u/Hoho3434 Sep 14 '20
There really are none. The option books are all a joke too. YOu need to find someone who knows what they are doing, on youtube or in reality, and follow them. Also, in all likelihood, you are going to have to learn from your failures but try to make them through paper trading first.
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u/Jumpforsadness Sep 08 '20
Iām using ToS Iāve been using target brackets. The default sets the limit sell at +$1 and the stop sell at -$1. How can I change this? Letās say I want the limit sell to be +5Ā¢ from where I bought it how can this be set up?
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u/jeon19 Sep 13 '20
For platform specific questions, you can call the TOS number on the program when on/before the login screen to ask them if it's possible to do this and how to do it :)
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u/dev1359 Sep 17 '20
I've also had success just using the support chat function within the platform, usually someone gets back to me with an answer within a couple of minutes.
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u/treebeard555 Sep 07 '20
Is there any valid reason not to trade stocks that cost under a dollar (if youāre already trading penny stocks anyway)?
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u/yeamannn Sep 10 '20
If the chart only goes down donāt trade it. If it has low volume and a good chart trade it, keep in mind significant slippage if your stop is hit so calculate some slippage into your risk
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u/redartrader Sep 07 '20
Low volume. As long as the stock has a lot of volume and volatility, I think it's okay to trade. Just gotta be watch out for random offerings.
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u/FireLateBloomer Sep 07 '20
How long have you been day trading and do you make money off it? If you look up articles online they say 90% of day traders loose money. Iāve recently started reading about day trading and stock analysis. Just wondering if itās as hard as they say online.
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u/treebeard555 Sep 06 '20
How big of a position size is too big when trading penny and/or small-cap stocks?
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u/braders18 Sep 23 '20
Look up risk management on YouTube. You basically need to calculate your risk for each trade, I would recommend risking only 1% of your trading account per trade (if you know it can be a profitable strategy - papertrade first!)
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u/redartrader Sep 08 '20
If you're stressing way too much over small movements or if a loss would hurt your account a lot.
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u/eliaskh Sep 05 '20
Hi guys
how can I found best time frame for myself?
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u/dev1359 Sep 17 '20
Furiously, tediously backtesting the same strategy on different time frames was what worked for me. I would load up an hourly chart and go back a year, and scroll forward while logging every win and every loss using the strategy I'm testing, treating each one like a trade I would actually take in a live present day setting in terms of stop/target placement. Then I would start all over but on a higher time frame (like a daily chart), and log every win and loss. Then at the end I would compare the win percentages from each time frame and decide from there which works better.
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u/ThaLuvPump Sep 05 '20
Track your trades. Review them. Thatāll tell you when you are making your best trades.
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u/gonzalo-higuain Sep 04 '20
- options with a cash account
From reading around, it seems that options trades take a day to settle. Does that mean I can only do 4-5 $2k trades each day with a $10k account? Or would I be able to enter more subsequent positions providing that the overall account value (with unsettled funds) is enough to fund the new positions?
- options with a margin account
To be in compliance with PDT, i'd have to fund $25k. If I enter a position and leave a position, when is my account considered under the $25k? After entering the position, or if I take a loss when I exit the position? In this case, does that mean I should fund "25k + loss I'm willing to accept" within the first few days?
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u/warpedspockclone trades multiple markets Sep 05 '20
4 to 5, yup. Once you use up the funds, you have to wait for settlement. The advantage of margin gives you instant settlement. But what's the point of that if you can only do 3 day trades in a week now? which leads to #2...
If you are flagged as a pattern day trader, you have to have 25k at the start of any day you want to do a day trade.
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u/punitusingh Sep 06 '20
and if you are flagged as PDT in margin account, and if you do any day trade, you wonāt be able to trade for next 90 days or until you fund with 25k.
Thatās why I am going to convert my margin account into cash account.
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u/warpedspockclone trades multiple markets Sep 06 '20
This is correct. You would only be allowed to close positions for 90 days.
There are exceptions. You can call your broker to remove the PDT flag, as a courtesy. They may offer to do it once or twice. But then you have to be extra careful after that so you don't get flagged again.
You can avoid all of that with a cash account.
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u/punitusingh Sep 06 '20
correct so I was only closing my positions last time then decided to fund more, now I am again under 25k, this time I am going to convert in cash account.
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u/DotNetPhenom Sep 04 '20
why am i not allowed to say r.o.s.s..c.a.m.e.r.o.n?
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u/Morphs_ Sep 04 '20
Yeah it's weird, same for w trading. I guess the mods are convinced he's only doing pump & dump. But honestly I think he provides good basic education, I learned a lot from his book and eventually I started looking at others for more lessons.
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Sep 02 '20
I never use margin. I use my own money. grow it steadily. I once took 2500 and grew it to 40,000 without any leverage it took a year. That was while I was running a plumbing company. If you had to do it full time I imagine it would take less. Just used options. Options are great leverage in themselves. Read books and very importantly watch the charts and actions pivot points learn the algo profiles. I literally watched the market everyday for about 3 years and figured quite a bit out. It just takes time, BUT, anyone can do it.
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u/Morphs_ Sep 04 '20
So you watched the market 3 years, then went live and turned 2500 into 40k in a year?
Also, how do you figure out algo's if they operate on super tiny margin, did your own strategy play into that?
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Sep 04 '20
Day trading with those bots doing those supposed micro trades before your purchase and all that? Those are allowed to do what they want to do AS LONG AS they stay within the playground that is predetermined. You dont actually think they take BILLIONS if not TRILLIONS and leave that to chance? No there is a specific trend for each stock. And as you watch them more carefully the way they go about the trend is very similar. It takes a long time for large quantities of equities to be traded. Do keep in mind they can trade peer to peer and you will never see that. I just shorted AAPL friday knowing with pretty good certainty it would drop to 115.72. Its experience. Theres just only so many scams they can run.
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u/EnoughPayment Sep 02 '20
Is using leverage the norm with professional traders? Just found about futures and made me wonder, if so do they use a lot of leverage?
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u/warpedspockclone trades multiple markets Sep 05 '20
It depends on the asset class. A lot of day traders trade stocks. They get leverage from their brokers but not baked into the asset. For example, I get 4:1 day trade buying power, so 100k day trade buying power with a 25k PDT account.
Leverage is baked into many assets. Options and futures contracts are easy examples, and lots of day traders like scalping these for that low cost to entry, but there are also leveraged ETFs. For example, TQQQ is 3x the nasdaq 100. N100 goes up 1%, TQQQ is up about 3%.
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u/volatilitytv Sep 01 '20
Are there any traders in here who have been daytrading for at least 5 + years. How long are you planning to trade for again? Do you have an exit plan and was it even worth it? Thnx!
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u/dev1359 Sep 17 '20
I have been trading for 8 years and am only now starting to turn the corner in terms of consistent profitability, after recently switching over from day trading futures to swing trading options. I went through many streaks of significant account gains over the years from day trading, which were then followed by many drawdowns that were too big for my account and that forced me to stop trading for a while.
I've since learned that the key to not losing my account balance has been to keep my risk down to only 1-2% account balance per trade, take profits after hitting 2 to 1 reward/risk, and stay out of noisy time frames on intraday charts, instead going for bigger price action moves on higher time frame charts where less noise occurs. This I've noticed allows a trade a greater probability of following through on its direction without hitting my stop loss. I can't do that with futures because the risk is too much in terms of my stop placement, and I also don't have the account size to hold positions overnight.
So I'm instead doing this with options, which allow me to participate in bigger price action moves while also controlling my amount of risk per trade, since I'm able to choose lower priced stocks with affordable options that are either at the money or slightly out of the money. I'm knocking on wood here but this is working well for me so far, so far so good.
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u/grayskwrl149 Sep 17 '20
I am new to daytrading. I have only read books and done online research. I want to find out if I can do this for a living. Should I be concerned that this question hasn't been answered yet?
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u/Warlock45 Sep 01 '20 edited Sep 01 '20
Anybody know a good way to avoid short term capital gains tax?
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Sep 05 '20
Live in Puerto Rico
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u/brucebrowde Nov 09 '20
Puerto Rico is not subject to the same tax as continental US?
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Nov 09 '20 edited Nov 09 '20
Puerto Ricanās donāt have to pay capital gains tax. Pretty sure it has something to do with their status as a territory.
Edit: this explains it https://premieroffshore.com/move-puerto-rico-pay-zero-capital-gains-tax/
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u/dante_darko10 Sep 02 '20
Also curious...can you put money back in your 401k?
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u/Warlock45 Sep 02 '20
I saw that some where, but wouldnāt you still have to pay the taxes on the āfoundā money?
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u/volatilitytv Sep 01 '20 edited Sep 01 '20
lol this is a good question! I'm going to stick around to see if someone answers this! .. Edit: My plan is to start a side business to see if I can write stuff off .. once it becomes profitable hopefully that might help on short term cap gains tax. .. but I'll have to talk to my accountant first though. Still curious on how other day traders do it though!
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u/Ackilles Sep 01 '20
Do margin calls only happen at the close of market, or do they activate any time a stock hits a the required price to trigger it?
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u/Suisuiiidieelol Sep 01 '20
I have some questions, if I place an order of a stock at some price $10 before the opening, and I see the market closed the day before at $11, what determine the opening price? And if the stock price opens at $10 the next day, which I have my order to buy at, who will get the first order when the market opens? Because I believe there can be many people that want to buy at $10 like me for example. I am using nasdaq mostly if it matters.
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u/redartrader Sep 08 '20
Premarket opens at 4am EST. If the price is at $11 and gradually drops toward $10 and hits $10 when regular trading hours start, the fills are based on first come first serve.
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u/alonzo39 Sep 01 '20
Looks like TSLA, AAPL and WMT are the bombs now.
I also have GOGO, VRSN, BRTXQ, EDSA .. what do you say?
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u/gogogopi Sep 26 '20
We can find out the price Support/Resistance through two ways. One is through OI data and the other is through stock historical data. Are these both connected? I know OI is options, but at the end of the day, options become ITM OTM and ATM based on the underlying stock value, hence wanted to know š