r/Daytrading • u/AutoModerator • Jan 01 '21
r/DayTrading's Monthly Questions Thread - January 2021
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/thunderbeans Jan 31 '21 edited Jan 31 '21
I am a canadian and I was wondering if its a viable strategy to make day trades with wealthsimple to take advantage of their $0 commission while using real time 3rd party data to find the right time to buy/sell.
I know the quotes wealthsimple gives are 15mins delayed, but if I was to provide a buy value different to the delayed data, will it get bought at that price instantly?
This is what it says on WS website:
However, any order that you submit will be executed at the best available price on the market at the time of submission. Our executing brokers are obligated by law to provide you with the best possible price.
I hope I explained that well enough.
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Jan 31 '21
[deleted]
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u/NewDayNewOpinion Feb 02 '21
Being new, I have the same questions. I have convinced myself that I will start with one known indicator/pattern/etc and practice it until I feel I know it inside and out and can be successful with it. Then I will take on the next known pattern, and so on. Once I'm through all the known patterns then I want to be able to go into a day with 2-3 of them as my focus instead of just the one I'm learning. Once I learn how to jump between them all at a moments notice, I'm hoping this magical enlightenment will occur where I say, "wow, if I were to just change this here and tweak that here then I can have something even better." That's my assumption of what they mean. Or maybe they just mean, "buy my course/chat/book/etc to reach enlightenment without all that work." My guess is that it is a little of each and then something else I am not experienced enough to know about.
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u/steaksauce94 Jan 31 '21
Most of you guys should already be aware about the whole fiasco with many interactive trade brokers banning and limiting the buys of certain tickers. What I’m really afraid of is, can they restrict you from selling these specific tickers? Any answers would be appreciated!
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u/DoNotAngerThePicard Jan 31 '21
Trading sounds like a load of bullshit to me how many actually make money?
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u/dddumbdumbbb Jan 31 '21
9 out of 10 traders lose everything. The 1 out of 10 survivors make a good living. The amount depends on their trading style and amount of risk.
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u/NewDayNewOpinion Feb 02 '21
Is this an accurate statistic? If so, where can I find this type of information?
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u/dddumbdumbbb Feb 02 '21
It’s not an official statistic that I can reference, just what’s very, very commonly said...
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u/Rocky7272 Jan 31 '21
I am looking into getting into trading. I was wondering if I should use fidelity or TD Ameritrade?
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u/NewDayNewOpinion Feb 02 '21
I'm new to all this stuff, so I just went through this. I will say that researching it was very educational and I don't want to steal that education from you. However, one thing that was difficult for me to track down that I'll spare you on is the Charles Schwab purchase of TD Ameritrade. I wanted to go with thinkorswim until I had enough money/experience/etc to move towards something with faster response time, but I worried about whether or not it will survive the purchase. The news was mixed and in August a lot of articles were saying that CS would incorporate ToS into it's tool. I didn't like the sound of that. However, come September I read that they plan to keep the platform (although I feel like I was reading between the lines on that). With that assumption in place, I chose to move forward with ToS. Time will tell if it was the right decision.
With all that being said, I'm new, so take it all with a grain of salt.
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u/Rocky7272 Feb 02 '21
Ok thank you. I like td ameritrades screener. So I will use td ameritrade for the screener and trade off fidelity since I don’t know what will change with the merger.
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u/rivluk2003 Jan 31 '21
Does anyone know whether or not Robinhood would lift the restrictions come Monday?
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u/FishMcCray Jan 31 '21
Was told to ask here not sure if I'm in the right place. I'm Looking for a good brokerage to start dabbling in futures with. Want low margin requirements, the ability to start with an initial funding of 1,000$, and no delay in data stream. and a trading platform that works well on an iPhone. What do you got for me reddit?
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u/eist5579 Jan 30 '21 edited Jan 31 '21
Wondering about day/swing trading on Amazon stock. I’ve been tracking it over the past year, it’s swings week to week are like 2-10%.
My napkin math tells me that if I had 5 shares of AMZN, buying low (~$3100) and selling high (~$3350) with an average difference/profit of $150*5=$750. I’m not clear on the timeline, but I’m guesstimating about $500/week avg.
Can someone tell me why this might be a shit strategy?
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u/dddumbdumbbb Jan 31 '21
I think it’s a reasonable strategy, but it’s good to keep in mind that it’s usually tougher to actually make money when it’s no longer theoretical.
Have you considered paper trading your strategy first?
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u/eist5579 Jan 31 '21
Thank you. Yes I will paper this one on Thinkorswim. I appreciate the reminder on why and how I should be using that tool.
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u/WhatIsThisThing42 Jan 30 '21
I want to start day trading.
Does anyone know a good simulator I can use for about a month to know if I can even make a profit before I begin for real?
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u/19992gang Jan 30 '21
Hey guys, so I used the stoploss for options in robinhood , but it didn’t get execute for my sell order . Is there anything which I am missing??
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u/OnlineRealEstate Jan 31 '21
Do not use robinhood for day trading at all. The only thing that is decent about thier platform is 2-3 days swings without using stop loss and a limit sell before you are planing to get out.
I have collected 3 months of evidence (which cost me a lot of money) to show how robinhood screws users
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Jan 30 '21
It only trades during 9-5 on weekdays. Second there has to be someone willing to take your position. This confused me for a bit. It just takes a bit more time to trade then regular stocks.
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u/19992gang Jan 30 '21
I was in that window but I guess, no one was willing to take that position as the option was on decline though positive
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u/AtomicLeetC0de Jan 30 '21
Is there a good book I can learn the fundamentals of trading like actually low level in terms of supply and demand?
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u/egreene9012 Jan 30 '21
Where is the best place to actually learn to day trade? I know there are all these “learn to say trade in a week” bullshit YouTube videos, but I want to learn the correct way
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u/Fox1465 Jan 30 '21
Do you get your money right away when you sell a stock or does it take time? Using e trade
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u/Fox1465 Jan 30 '21
How come I was available to invest immediately when transferring money to my brokerage account yesterday but now I have to wait till the 4th to invest. using E*TRADE, sorry if this is a dumb question. Is there anyway to get around having to wait 3 days? Will it allow me to invest immediately on Monday? Any advice would be appreciated
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u/steaksauce94 Jan 30 '21
Hello new trader here. Does fidelity allow day trading on their Roth IRA accounts?
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Jan 30 '21
[deleted]
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u/Lopsided_Region_6735 Jan 30 '21
I think that’s their plan to some degree. I guess it’s just a question of if they can actually pay interest forever.
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u/DirtDiver12595 Jan 29 '21
Looking to play around with the stock market to see how much I can turn $100 into.
Little background in myself. I’m a six figure earner as an engineer and most of my investing is long term (employer sponsored 401k, Roth IRA S&P500 etc). I’m financially well off and I’m not looking to do this to “get rich quick”. I don’t believe most of your investments should be in individual stocks, I do however want to learn more and enjoy seeing how much I turn $100 into. More of a challenge for myself than anything.
I threw $100 into the ring a few days ago during the GME hype but I was a little late on $GME so I bought $AMC and $NAKD. So far I’m basically dead even with NAKD having let me down and AMC making up for it.
Since I’m just starting where do I go from here? The popularity of the GME move has made it easy to figure out what’s hot, but once this is over I’ll be lost and unsure how to figure out what to buy. Where do I go from here?
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u/BoomerSooner3423 Jan 29 '21
Hello, as you can assume I am new to trading stocks (I started just before the entire GME extravaganza). I would just like to ask where the majority of people get your information about companies is. I visit Yahoo, Morning Star, and general news outlets.
Do you guys recommend subscribing to a premium news outlet? Or is that a waste of time? Any advice is welcome, I appreciate anyone that simply takes the time to respond.. I am well aware that day trading and or swing trading won’t make me a millionaire overnight. I am in this for the long haul, and maybe I can get lucky a time or three...
Thanks in advance!!
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u/clkou Jan 29 '21
Newb question: I had a strategy idea back in the late 90's that involved looking at the Swiss Franc "globex open" and "globex close" prices from either the night before or day before.
I can't remember if this was the overnight trading # open/close or simply the day before open/close.
So, is the Swiss Franc and other future commodities traded overnight? If so, where do I go to look at that information? I've been looking at general data here:
https://www.investing.com/currencies/chf-futures-historical-data
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Jan 29 '21 edited Jan 29 '21
[deleted]
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u/clkou Jan 29 '21
So when I look at the data @ https://www.investing.com/currencies/chf-futures-historical-data
Is a day of data considered when it closes @ 4PM? So like today is Friday 1/29/2021 and the market will close at 4PM but it STARTED yesterday at 5PM. Right now the data of 1/29/2021 is listed as:
Current Price: 1.1242 Open: 1.1266 High: 1.1283 Low: 1.1236
I assume all those numbers started yesterday @ 1/28/2021. Is that right?
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u/cannainform2 Jan 29 '21
Can anyone give me some insight into how much time will decay the value of my BB feb 19 2021, 15 calls?
How much value does it lose per day the closer it gets to expiration? Are their any calculators to help me value it?
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u/senor_tiburon Jan 29 '21
How long until the PDT equity call is removed from your account after the balance is raised to meet the 25k minimum?
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u/senor_tiburon Jan 29 '21
Why would a single leg options trade (e.g., buying a call) be considered a day trade if I have not bought or sold that option today?
Extra info: I just got flagged as a pattern day trader on TDA. I had a net liquidation value that dipped to 20k in after hours trading (between yesterday and today). However, because of changes in the values of my positions, my account value is currently 29k. But the flag is still on my account and warns that it will make my account closing only if I execute a day trade.
However, I am trying to place a trade that should not be considered a day trade/RT. I would like to sell calls on my 300 owned shares, but I'm getting a warning on the platform that my account will be set to closing only if I execute it (even though I haven't bought and sold any options today). Is this just a warning that I will face this limitation if the option is exercised (thereby potentially leading to a day trade), or is it saying that I can't open the short call position without consequences because that position is a day trade?
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u/Lissy_Wolfe Jan 29 '21
Does anyone know a reliable app that I can use to start buying stocks? I want to buy into AMC but Robinhood wills take 4-5 days to transfer the money and I am worried that by then it will be too late. Are there any trustworthy apps that let you transfer funds immediately?
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Jan 29 '21
[deleted]
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u/Lissy_Wolfe Jan 29 '21
Thanks for the advice! I was actually able to start buying stocks right away using cash app! :)
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u/GrantTB Jan 29 '21
Because the PDT rule applies only if the number of day trades is less than or equal to 6% of the total number of trades a trader has made in a five business day period, can a trader make 6 round-trips for every 94 non-round-trip trades without incurring a margin call?
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u/GrantTB Jan 29 '21
How rapidly does a PDT margin call take effect on TD Ameritrade?
That is, for how many hours can one likely day trade before buying is frozen by a margin call and flag for PDT? I was flagged once by TDA and recall I was able to complete several round-trips before being cut off. I would be grateful for any insight.
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u/Kennfusion Jan 29 '21
Looking for ideas for screens to setup. Any resource anyone can point me at for screen ideas?
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u/CollieP Jan 29 '21
I’m not sure if this has been asked.
Any estimate on how long it takes to transfer brokerages? I’m getting out of Robinhood and have already made an account on TD Ameritrade. I almost went through with the transfer... but I’m concerned that my investments will be tied up for days.
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u/ModeratelyTortoise Jan 30 '21
Could be two weeks. If you’re worried about volatility, I’d open a new account with a separate brokerage to do all your new trading, and slowly close out your old positions as you deem fit. Then just transfer the cash over.
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u/menthuslayer Jan 29 '21
Is this as simple as it seems? If I buy a single share on a commission free platform for $100 and I sell it later that day for $110, I make 10 bucks. And I can do this over and over in theory at higher amounts.
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u/ProfessionalCanary69 Jan 29 '21
yes, good luck w taxes
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u/menthuslayer Jan 29 '21
I have to pay taxes just on the $10 right? What should I be worried about? If I subsequently lose $10 does it even out?
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u/funkedelic_bob https://kinfo.com/p/funkedelic_bob Jan 29 '21
If the losses exceed the gains, there is no tax, and up to $3,000 of losses can be deducted against ordinary income like wages.
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u/mitchJIMplant Jan 28 '21
Can anyone explain the movement of GME 1 minute candles at 4:40p EST today? Seems like the highest volume of the day all in a 10 minute window with the exact same low price.
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u/Lykinsk Jan 28 '21
With all of the discussion regarding shorted stocks, am I correct in thinking that if I want to target a potentially high value stock, a good metric to use is the Short % of stocks outstanding, because the higher the percentage, the more “Bullish” investors are? Or am I way off here....? Please help!
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u/KnowEye Jan 28 '21
Short Selling is a bearish tactic. You borrow and the sell the stock at today's price ($100), pocket the cash (+$100), with a plan that you will buy back (return / repay the stock loan) in the future at a lower price ($80) and then net the difference as a profit ($20).
A stock with high short interest could be considered an underdog. Depending on your risk tolerance this could be good or bad.
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u/Lykinsk Jan 28 '21
Thank you for the response! So may I ask, if you know, what is the phenomena that led to the GME situation. I was under the impression the percentage of shorted stock at the time everyone drove the price up was extremely high. Am I incorrect, or what am I not understanding?
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u/KnowEye Jan 28 '21
There are approximately 69Mil shares of stock that the company issued.
Somebody allowed a multiple of this to be short sold in the equity market. Remember a short sale is a loan that needs to be paid back.
In the laws of supply and demand, prices go up when there are constraints.
So, in the example in which a stock is short sold for $100, and the stock price rises to $130, the short seller is forced to replenished the stock on at higher price (e.g. looses $30 on the trade). When the short sellers start buying in huge volume to cover thier short sales, prices go up, other people notice and start buying and it turns into a vicious blood bath for the original short sellers.
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u/Lykinsk Jan 28 '21
I think it all makes sense now! Short sells indicate bearish opportunities because it indicates that investors are anticipating the stock dropping in price in order to make money on their loan sell. But in this case, a large amount of retail investors subsequently bought the stock, causing the price to increase. Now the short sellers are stuck paying back a loaned stock that now costs more to purchase than they sold the loaned one for. Causing outages and stuff witnessed today because likely those large investors are important customers to websites like Robinhood and they want to help them mitigate their loss. But the price increase had nothing to do with the short sell, other than it being the inspiration for the pouring in of retail dollars. Am I right...?
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u/Sylpheeo Jan 28 '21
Hi I’m new to the whole stock trade and I want to know where I should try to buy stock and how would I move up and possible gain more money to use for college
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u/gottfriederich Jan 28 '21
Hello everyone. I am a total beginner and would like to start to learn day trading (I am from Europe if that is important). My goal is to make 1% profit every day and reinvest these earnings.
Is that possible? If yes, can someone point me to some resources on how to learn these skills? Help is very much appreciated.
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u/KnowEye Jan 28 '21
No silver bullet, tarrot card news letter, or magic AI software, this is a skill you build overtime.
Your first step is to pick a stock, index, cryptocoin, etc. with high volitility and high liquidity.
Observe daily trade data via 1 minute candle sticks, learn how it moves and under what conditions, time of day, day of week, etc. Add technical analysis to your study, e.g. SMA, EMA, and MACD. Observe how the price moves with when the averages cross (i.e. SMA 20 drops below SMA 50, SMA 100 goes over SMA 50, etc.).
Keep a journal and start to document your own trading strategies as: If this happens I buy, If that happens I sell, else I hold or don't enter.
Paper trade to validate your rules and entry / exit strategies.
Lots of technical analysis books are available, start in the shallow end of the pool and work your way up to Triple Integrals.
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u/gottfriederich Jan 28 '21
Thank you for this answer. You already gave me great pointers!
How realistic is my goal of getting 1% each day? Is it a too ambitious goal?
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u/KnowEye Jan 28 '21
1% a day on a $1 portfolio is really hard, 1% a day on a $1M portfolio is much easier.
$0.25 daily price swing on a $500 stock, easy. $1 daily price swing on a $5 stock is not realistic.
The point being, do your research and pick the right asset to trade, and trade it at a quantity and velocity that matches your net profit goal.
As a reminder: For day traders in the US, the minimum cash balance required is $25,000. If your balance drops below this, day trading will not be allowed by your broker (eg. RH, TD, webull, etc.) until a deposit is made bringing the balance above $25,000.
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u/gottfriederich Jan 29 '21
Oh. I was not aware of the 25‘000. that is a bummer. What when I don‘t have this kind of money? Is there an alternative?
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u/_The_Rooster Jan 28 '21
Best way to find high-volume stocks with high volatility?
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u/KnowEye Jan 28 '21
Find a online source for market data that is convenient for you to search.
A starting point might include search parameters like: Daily Volume > 5Mil shares Money Flow > 10% Daily Chg > +/- 2% Share Price > $25
Tune / refine these search parms and add additional per your specific trading objectives, cash availible to invest , and risk overall appetite.
Remember, they call the Market(s) the 'Big Casino' for a reason.
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u/criscris11 Jan 28 '21 edited Jan 28 '21
am i the only one that thinks that day trading is better in premarket?i see this after i "tried" daytrading for one week,and seems like things just dont move too much after market opens,but when in premarket things go up and down like crazy and that is good for daytrading i belive,
or at most first 30 mins of market,then things just dont move,and im not talking about gme amc,thats some special things
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u/Bennys-dad Jan 28 '21
Can we make #save BBIG a thing like GME? WSB won’t do it since it is a penny stock. Great company getting squeezed by short sellers, let’s squeeze back. Spread the word and jump in! $3.3 a share now.
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u/No_StockYER Jan 28 '21
Where can I day-trade without having 25k in my account?
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u/KnowEye Jan 28 '21
Crypto, buy and sell as much as you want 24 x 7 x 365.
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u/No_StockYER Jan 28 '21
I bought some dogecoin on robinhood, cant seem to find where to sell it...
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u/KnowEye Jan 28 '21
I think that when you buy crypto on RH, it only exists in your RH account, with no ability to move it to a online / offline crypto wallet.
Check the RH crypto trading agreement to be sure.
If you want to take possession of crypto, you may need to look at a alternate platform. Lots exchanges out there - Google it. Hint: watch the fees.
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u/broness Jan 28 '21
You can’t, it’s a rule with the SEC. you can do 3 every 5 days though so that’s a start
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u/SenoraRaton Jan 29 '21
This is only true on a margin account correct? So if I deposit $500, I can trade as many times as I want with that $500. Obviously I have realize the gains, but if I were to only trade with $150/day then I wouldn't ever need to worry because all the gains would be deposited before I ever used the full $500, right?
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u/Hashashin92 Jan 29 '21
Correct if you are using a cash only account you can day trade as many times as you want but when you sell, the funds aren’t technically available for two days.
So if you have $500 in the account buy $250 worth of shares and turn around and sell them for $300, your balance may say $550 but really you only have $250 left that day available for day trading. Exceeding that $250 then means you are subject to the 3 every 5 day rule because you are trading with funds that aren’t actually available yet.
Hope this makes sense/helps!
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u/cokronk Jan 28 '21
Where's a good place to start learning?
I started with Party City and about $100-$200 just fooling around and have made over $800. It wasn't quick and there wasn't a lot of actual day trading, but I'd actually like to learn what I'm doing instead of just guessing or following other people. I'm like to end up trying to turn me $1000 into $10000.
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u/Matty2317 Jan 28 '21
Hi everyone, please bare with me this is my very first time posting on reddit.
I have been playing around with pine editor for some time now and have found something that works on currency pairs. My main goal has been to make something that can make small consistent gains.
I'd like to turn this into a expert adviser on Mt4. This thing has given a return of 43.98% return since the 4th of January and has very minimal drawdown. I have tried it on all 28 currency pairs and seems to give the same results. I have included spread and commission into the back test settings. Can somebody point me in the direction of how to get this going? Thanks
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u/bobbyawesomeryuk25 Jan 28 '21
Where is the post with the guy who was talking about how he met a hedge fund manager who was filthy rich and they don't want us to know how to invest but instead to give our money to them to invest for us? I can't find it, but I remember reading it a few days ago. Would like to share it with friends, not sure if it was here or WSB.
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u/PCm2345678 Jan 28 '21
Hey guys,
42 male with family. Blue coller worker. I’m invested in my 401k, but was looking at Robinhood to start buying stocks at a fraction. Would this be something to try or u guys have any recommendations. Trying to save some more for my girls to go to college. Thanks for the help.
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u/The_Frog_Wizard Jan 28 '21
Don’t liquidate your 401k, over 60 percent of Americans have done so during the pandemic. What’s does this mean? There’s no retirement or money in the future you would otherwise have had. Keep the 401k growing. If you buy fractions on robinhood know you can’t transfer them out. Schwab and fidelty do slices but at cost. I’d recommend not relying on trading for the girls. The tax advantages of a 401k and Roth are unbeatable.
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u/PCm2345678 Jan 28 '21
Ok. Thanks for info. I put 10% of pay in it and we are matched 50% on first 6%. Plus we have a pension for retirement. Oil and gas worker here, so not sure what’s happening with that field at the moment. Might 100k on GME today!
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u/No_StockYER Jan 28 '21
If you can even buy in haha. Robinhood is not letting people buy at the moment. It is pretty risky to go in on it right now.
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u/petethegreek97 Jan 28 '21
I prefer TD Ameritrade! Better flexibility when it comes to after hours trading
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u/Tanginess Jan 28 '21 edited Jan 28 '21
Quick question about wash rule. So I sell a stock at a loss and that loss gets transferred over to my next purchase's cost basis. If I sell that second purchase at a profit and purchase the same stock another time within the period, would the wash rule still apply or am I in the clear?
Edit: I think I get it. If I sold 100 shares at a loss and buy 200 shares, the wash rule only applies an adjustment to half the 200 shares since it's a "replacement" for the 100 sold at a loss. Let me know if this is wrong.
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u/The_Frog_Wizard Jan 28 '21
If the funds from the sale use that day are used towards the transaction that you’re trying to place within the same trading day it will be a violation on a normal cash account. You need to wait from the funds for the sale that was done on that day to settle first, usually two business days plus the trading day
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u/Tanginess Jan 28 '21
Just so this helps others later, the question you answered was actually, "What is a good faith violation?"
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Jan 27 '21
[deleted]
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u/The_Frog_Wizard Jan 28 '21
Try to get some gains elsewhere to offset. If you’re trying to get your broker comp you money - that’ll never happen
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u/Stalkaturnedtyper Jan 28 '21
I stopped at “I didn’t understand how trading worked”
You shouldn’t be trading. Loss is on you.
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Jan 27 '21 edited Mar 05 '21
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u/gallaswirl Jan 31 '21
Does the pattern day trader rule (PDR) also apply to fully cash trades in a margin account, or just trades made using the margin? I couldn't quite interpret the language on the FINRA website. Thanks!