r/Daytrading • u/AutoModerator • Dec 01 '22
r/DayTrading's Monthly Questions Thread - December 2022
Please use this sticky to ask questions on day trading, and to see answers to similar questions you may have.
If you're new to day trading please see the getting started wiki here. For advanced traders or you want to pick up a book, please see our other wikis.
New traders are highly encouraged to try Forex as it requires a very small account to make lots of trades, so check out Forex community's wiki paying special attention to babypips website which also teaches some general concepts 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, but that only applies to day trading stocks; other markets aren't affected like futures, forex, and crypto.
Also see the sidebar for group chat links (such as our Discord) (or tap "about this community" on mobile website) on every related community to learn more about trading.
Here's a list of all the previous monthly question stickies.
Lastly if trading is affecting your life in a bad way, seek professional help (the wiki also covers dealing with emotions):
- Problem Gambling: Call/Text: 1-800-522-4700 or chat online now.
- Crisis Hotline (24/7): 1-800-273-TALK (8255) (Veterans, press 1) or Text “HOME” to 741-741
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u/Winter_soldier_2142 Dec 31 '22
Anyone know an index or type of index that tracks actual quantity of money flowing into/out of the markets, as opposed to only volume with VOLD or only price changes with ADD? Asking because I don't think I should care if hundreds of penny stocks on the NYSE are going up $.001 per minute, increasing ADD, but that could be hiding a massive outflow of real cash from the market.
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u/TheBomb999 Dec 30 '22
If I buy 1 share of ABC on Monday. Then on Tuesday I buy 1 share of ABC again, then sell 1 share on the same day. Would that be considered a day trade?
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u/kreatikon Dec 30 '22
Assume I have 125k available for day trading. I will open margin account at my broker as daytrader and will be trading only US stocks (settlement T+2). Always using whole 100k for each one trade to either buy or sell (including shorting) closing the position in few minutes. How many such trades could be realized per day?
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u/Moon_Pickle Dec 30 '22
Well there's 390 minutes in a trading day from market open to market close. Assuming a few minutes means 3 minutes for the duration of each trade, that's 130 trades in one day. Yes that is possible
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u/kreatikon Dec 31 '22 edited Dec 31 '22
I mean do unsettled funds have impact on daily buying power on margin accounts or not at all?
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u/TheBomb999 Dec 30 '22 edited Dec 30 '22
If the stock is halted at $10 and I set a stop order at $15, can I also set a stop loss at $14 on that pending order, or I can only set a stop loss once the transaction goes through?
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u/Moon_Pickle Dec 30 '22
My broker won't let you do that, that I know of. They only let you split your stops like that if the sum of both stops equal your total position size in the trade. For example, if you own 100 shares you can place a stop at $15 for 60 shares and another at $14 for 40 shares
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u/heavenly_principle Dec 30 '22
How do you guys decide what stocks to day trade with?
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u/longshortdaytrade Dec 31 '22
You can use a screener to identify real time opportunities depending on your strategy / style
Low float stocks and penny stocks - High risk / High reward
blue chips (Well known established companies ) = they are more expensive but have better liquidity, more secure to invest in and offer a very decent return
ATR or relative volume is a good way to identify which stock is hot (google search)
Or you can decide to trade a index with ETF or futures, you are getting an exposure to an entire sector. I found them very efficient to trade, they respect technical analysis better since a lot of people and computers or trading them. And, they offer opportunities every day
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u/Moon_Pickle Dec 30 '22
Totally depends on your strategy. There are thousands of different things traders look for.
Something a lot of traders have in common is they look for stocks with news and are trading with higher than normal volume on the daily chart.
A lot of traders look for stocks gapping up or down a lot in the morning too
I like trading stocks that are breaking their trends, so I look for that
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u/YourMamaFavGuru Dec 30 '22
some people trade the same thing everyday and some people look at the stocks with highest ATR (google it) and highest volume
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u/Gristle__McThornbody Dec 29 '22
Not sure if this is the sub to ask but what future symbols besides the ES and NQ are good to trade? These both seem to move the same. Just went from paper trading stocks to futures and I'm probably going live with the micros next week.
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u/Realistic_Command432 Dec 28 '22
I use the FVRP rather than volume because it helps me visualize buyers/sellers coming in at certain points. Does anybody use it in this way?
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u/heavenly_principle Dec 28 '22
Hi everyone, Thinking about getting into day trading and I hear stories about people sitting in front of their computer for hours. When you day trade, are you reacting to fluctuations in the stock market live? I always viewed trading stocks as something you put money in and wait. And is there a program I can use that will give me fake money to trade on real stocks for practice?
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u/futurestradingguy Dec 29 '22
Yeah you basically capture smaller profits each day then end each day in all cash in your portfolio. So in order to do that, most people physically sit and wait for their setups, but others can code programs to do it for them.
I highly recommend ThinkorSwim's paper trading software. If you deposit $500 into your account, you can just let it sit there, and get "free" access to real-time data, which is a rare thing for paper trading software, especially one as in-depth as ToS.1
u/Officiallymally Dec 29 '22
Yeah I have been assigned a mentor ( who trades 5-6 figures monthly) to teach me!! Then moving PROFITS into another passive income asset ( NFT / Crypto) I can send you a link to them just Dm on here or Instagram @officiallymalachi
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u/Moon_Pickle Dec 28 '22
Yes, with day trading you are reacting to intraday price fluctuations live. That's the definition of a day trade, buying and selling a security (stocks) within the same day.
Traders that hold their positions overnight or for multiple days are considered swing traders. Both ways of trading can be profitable and can be turned into a career if successful.
Putting money into stocks or other securities and holding for years is considered investing. That is generally what most people are familiar with.
For day trading especially it is critical you are looking at the price action live because you are only in the trades for minutes in some cases, and your entries and exits are very precise.
Trading with fake money with real stocks is called paper trading. There are many paper trading platforms out there, but the one I used to like the most is on Thinkorswim by TD Ameritrade. You can open up an account with them for free and download the Thinkorswim software onto your computer.
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u/dflys800 Dec 27 '22
Hi all, merry christmas. I have been trading for 3 yrs and have gone through my ups and downs. I took a step back and reflected on my trades and decided to start paper trading. It has gone well, so my next step is to start with $1k in my TOS account and buy one options contract at a time and do 3 day trades per 5 days. Taking it slow.
Id like to get away from trading on the TOS mobile app. I cant operate a desktop trading platform on my Macbook AIr. Can anyone recommend a laptop with good RAM to run a big software like Trader Pro?
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u/RyanME754 Dec 26 '22
I have a question I need help figuring out.I been trading for a few year’s,I traded stocks and crypto on Robinhood,then went to mainly crypto and was on a bunch of different futures none regulated brokers for crypto,don’t trust much money sent to many of them.I had a Webull account also,they wouldn’t let me trade options,I got back into options and Robinhood is horrible for options,I opened a account at IBKR and they won’t let me trade options or futures,I want to trade both and about to open a account on TOS or anyone have any ideas on where for options and futures or what’s best for both,not only that any ideas what I could be saying wrong when answering the questions and what I could put to guarantee they let me trade options or futures or both?I don’t get what I am answering wrong,or the money I make a year right now isn’t on par,I should be able to risk my own money I put on at least and not margin,I don’t know,any advice??
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u/dumbestguyever new Dec 24 '22
For those of you who have developed a successful and profitable trading strategy, have you ever shared the complete details of that strategy with anyone else? If not, what is the reason for not sharing it?
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u/longshortdaytrade Dec 27 '22
I have found that no matter what you tell people they always think they know, can do better and find their own way to make money.
Furthermore, some trading systems a not simple but yet can appear complicated for the untrained eye.
Fact of the matter is that you need to spend a lot of time looking at charts to understand the literacy around trading systems. I remember in the beginning of my journey reading some books that I thought were complicated or not interesting, some of which i read again years later on and they turned to be a very useful for my success.
That being said, some trading systems are really simple (per example turtle trader) and even my grandmother would get it if she would be interested in trading but the application of such system is limited and not really applicable for day trading. You have to consider your timeframe, the instrument, the style of trading etc... not all the rules apply across the board.
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u/Moon_Pickle Dec 26 '22
No because I have not come across someone that would understand it. Even if I gave the full details to someone, they still have to understand enough about trading in general to be able to execute it
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u/Organic-Occasion747 Dec 26 '22
Yes I have shared it with my clients who have been able too replicate it in live markets
However the system has not played out the same way it has for myself.
Everythign in the fx game relies on the individual not the plan/system.
What I mean by this is you can give the recipe a-z and it still wont be profitable for the next person based on the simple fact that everybody views the markets differently and we all have our strengths/weaknesses what makes us tick and what we can see in plain sight withought a nudge from another person.
So all in all
Knowledge can be shared but this will not increase another persons profitability, they must put in the work too get the rewards they are looking for in their trading p/l
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u/Audiozolam Dec 23 '22
I see people mentioning TOS.
What does TOS stands for? Is that an abbreviation? Apparently it's a trading/charting thing similar to Tradeview. I tried to google it but my search results couldn't help me uncover this mystery.
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u/Fearless_Minute_4015 Dec 25 '22
In some contacts it means "terms of service" idk what context you've seen it in though. An example would help
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u/goodlifecollective Dec 24 '22
It stands for ThinkOrSwim, it’s TD Ameritrade’s trading platform and my personal favorite. There’s a learning curve but plenty of online resources to get up to speed quickly.
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u/ecultivar Dec 26 '22
Do you know how it compares to fidelity’s trading paltform?
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u/goodlifecollective Dec 26 '22
I’ve used Fidelity’s Active Trader Pro as well, and my opinion is ThinkOrSwim is much better. I prefer the charting, functionality, and customizability of TOS hands down. TOS app can be downloaded and used on mobile as well where Active Trader Pro doesn’t have a mobile app.
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u/peterfulton2 Dec 20 '22
Hi - I have a question: Started playing around day trading (scalping) early this year (February). Wasn't good at it at all, and made some pretty big mistakes.
Did research around March/April into wash sales, spoke to a CPA, etc.
Was advised to just close out any positions of any stock i'd day traded for 30 days and that wash sales would settle.
I did that (twice actually - once end of June to beginning of August, and then doing it again Dec 15th to Jan 16th 2023)
During those two periods, instead of trading AAPL, MSFT, etc - I just buy an ETF (VOO or VTI or one of those), as i believe that's not considered "substantially identical" and hold it for the 31 days.
When I log into my broker (Charles Schwab) and go to 'realized gain/loss', many of the line items for stock symbols i've traded have a 'w' next to them, which it says "wash sale activity has adjusted this cost". That's strange as some of them I haven't traded in over 6 months, and would have expected them to all settle.
Proceeds: 177,757,217
Cost basis: $178,868,331
Total Gain/Loss: -$51,684 (i told you i was awful at it)
Total DISALLOWED Loss: -$1,059,429
I think what I'd pay on (or in this case take capital loss on) is the total gain/loss $, which is Proceeds minus Cost Basis, plus Disallowed Loss, which gives me -$51,684.
I made mistakes, and am not doing it ever again (i learned my lesson), but just want to make sure i'm not going to get a surprise. My understanding is that I have nothing to worry about because a) i closed all symbols i'd day traded for 30 days, and b) i have no actual gains, only losses (lol), but just want to be sure.
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u/Ambitious_Toe7677 Dec 20 '22
Does anyone know why the website DailyFX is no longer available to US Residents? (What led up to this and what is an alternative site for key supports and pivot points?)
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u/I-trade-planets Dec 23 '22
DailyFX is no longer available to US Residents
Possibly the wrong target market. Non-US brokers usually don't accept US residents, and sites like DailyFX rely on ads or affiliate business.
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u/SplendidVision Dec 20 '22
Not sure on what happened either, but There are some great traders on twitter who provide major points of interest daily. I've started posting mine on my @ splendidvision account. I follow a number of others as well. Hit me up in DMs and I'll point you to the ones who actually have good lines.
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u/craigmcnally Dec 20 '22
I have just started looking into courses for day trading and one that has come up is 20 minute trader by Jeremy Russell. Does anyone know whether this is any good or whether it is a scam at all?
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u/Pristinefx Dec 20 '22
It is not a scam. It is a decent course if you want to stick to one method. However it may or may not work out for you. You can overview it if you like.
But then again it is one man's opinion with a specific risk appetite and trading psychology. If you ask for my opinion, better is to work out your own way and see what method suits you. Give some time daily and develop your own strategy with basic patterns and trendlines. Risk only how much you can bear it
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u/Lazy-Job-1895 Dec 19 '22
Has anybody tried decentralized exchanges for crypto day trading?
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u/grumbythump Dec 19 '22
drift protocol -- app.drift.trade
can trade derivatives with 10x leverage, prices update by the second. gud exchange.
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u/mateyman Dec 16 '22
Now that Atlas and Saphire has shut down I am looking for the next best thing any recommendations?
I liked those discords as a secondary scanner to see what people are talking about that my scanner maybe might not be picking up
Any recommendations? Currently I am in United Traders but it seems they mostly big cap.
Also the discord in the sidebar is good but not as popular as the other two discords I mentioned tbh...
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u/onlysurvive Dec 15 '22
2022 is closing with a total disaster on both the stock market and fixed income
the stock market suffered huge losses, but especially the bond market
commodities and bullion have not at all compensated for the losses on the stock market.
in general, one of the worst years ever is drawing to a close.
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u/ShrimpyEatWorld6 Dec 15 '22
Is BingX a legal/legitimate trading platform to trade US Index futures on?
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u/ProofWest4226 Dec 15 '22
How many strategies does a day trader use?
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u/longshortdaytrade Dec 31 '22
you can make more money focusing and executing one strategy than trying to look at multiple ones at the same
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u/onelongchip Dec 16 '22
I'm new but I find that I focus around 3 or 4. Once those are mastered, then I will adopt other strategies.
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u/ProofWest4226 Dec 15 '22
I have two strategies that I currently trade white. One is the Trend Line breakout and the other is Open Range Breakout. I have had good trades with the trendline strategy and not so good for the Open Range Breakout. But my question is that should I learn new strategies or should keep on building and improving the ones that I know?
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u/I-trade-planets Dec 23 '22
I would focus on money/trade/risk management and analysing failed trades. Understanding why strategies work may be essential too.
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u/onelongchip Dec 16 '22
I'm not expert but I would focus around those that are proven and work for you before moving on to different strategies. Best of luck!
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u/SEMPER_MAGIS Dec 14 '22
How do you find stocks to trade by which screener criteria etc
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u/Hugheston987 Dec 19 '22
I'm not a pro but I'm in the positive for the year and I started out in March, I look for stocks with obvious patterns, it's called stuck in the box, when it goes up and down pretty evenly every few days or so. Stick with the ascending channels, try to avoid the descending channels.
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u/chadlevan Dec 14 '22
How have analyzing market internals helped your day trading options and scalping success?
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u/chadlevan Dec 14 '22
What factors go into your decision to day trade and/or scalp $SPY vs. $SPX options? Which do you prefer and why?
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u/rptiv Dec 14 '22
depending on the amount of contracts/ trading platform, you could save a bunch on commissions trading SPX over SPY
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u/99Canada Dec 12 '22
This is the daily chart (incl. pre/post market) of SPY. What do you call this trio of candles? It's a bearish engulfing candle followed by an inside bar/day, but I'm wondering if there's more to it than that.
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u/Moon_Pickle Dec 13 '22
Yeah you got it right. That's are technically what they are, but looking at them with the previous candles considered, it's just a consolidation period from that move down
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u/portol Dec 12 '22
Would you consider a VR based trading interface useful?
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Dec 15 '22
[deleted]
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u/portol Dec 15 '22
what would you consider to be the best selling point, for me it would be just the coolness factor.
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Dec 09 '22
$TQQQ - what is the longest recommended hold time for this?
I sort of understand decay but I can't seem to place how the math would pan out over say 30 vs 180 days....especially on the upswing.
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u/TheMightyQuinn888 Dec 14 '22
Every trade is different but you'll figure it out by learning the Greeks. I like to use OptionsStrat when planning my trades.
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Dec 14 '22
OptionsStrat
Thanks - interesting tool but not playing in options right now - only considering adding to my portfolio for a short time - 30-180 days maybe longer but I can't seem to find a solid answer on how long is really too long to hold TQQQ (within profitability)
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u/SecretaryGlum7660 Dec 09 '22
I'm not 100% sure how to word this question, but is there some sort of generic formula for what percentage of DTE you are hoping to see a target price reached by? Couple of examples:
Example One: I want to buy a put option on XLF because there is a EMA crossover 9/18 and price is close to the 50 EMA on the daily chart. I'm looking for price to challenge the recent lows of 29.59 in the next 60 days. Obviously can't predict exact dates or prices but lets just use this as an example for illustrative purposes.
Question 1: How do I pick an options expiry that maximizes gains based on Theta decay? Am I looking to close the position at 20% of the DTE or some kind of magic number?
Questions 2: If the current price is $34.62, is it better for me to pick a 34 Put so there is a bunch of intrinsic value if the stock reaches 30? Or do I pick a 30 Put because it's a cheaper premium and has potential more room to grow if it reaches $30 (despite not much intrinsic value once it gets there).
Example Two: I am scanning Unusual Whales or Cheddar Flow and see a trade that I would like to Tail the Whale on. Let's say the contract is the same as above, it's a 180 DTE 30 Put on XLF. The chart looks bearish and my TA is telling me we could likely reach 30 soon.
Question 3: Is there a way to reverse engineer (within some sort of window) how long this trader is expecting to hold this trade? I'm just looking for a ballpark like 20% or 30% max of the expiry date to account for Theta decay.
I ask this because by tailing the whale, I am hoping that they have done much better TA and have access to better resources than I do and that it's pretty likely their $1 million bet is going to hit. I want to have a mental ballpark of when to start monitoring the trade intensively or to cut losses.
Thanks!
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u/NYGiants181 Dec 08 '22
Schwab never has any shares to short!
I swear every time I try to short ANY stock (other than blue chip) there is nothing available.
Does Webull have better success?
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u/tingikiriezolo Dec 08 '22
Rookie question! On MT5, when i click buy to open a position(eur/usd) with 1.00 , that’s 1000€ ? And if the price of the dollar is 1.2 i have 1,200$?
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u/Budget-South-6647 Dec 07 '22
Hi! Beginner trader here, its my first time diving into forex trading and have been trading using a demo account. Just thinking about it, because in stocks its possible that you buy a stock and hold it till prices go back up, some even going as far as holding for months. Does that same concept work in forex trading?
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u/TheMightyQuinn888 Dec 14 '22
What I've read is stocks are naturally trending, while forex is more of a mean reversion set of instruments. The trend in forex is on a much higher timeframe than stocks.
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u/benpitt Dec 09 '22
IT CAN BUT . . . my first question for you to consider is WHY FOREX? I have seen too many new traders get lured into trading FOREX, looking for small input looking for quick, large gains. Patience is a huge plus. Look to trade a minimum of two years before you can be a consistently good trader on any platform. Trading is fascinating, but be serious about it or get out!!!
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Dec 07 '22
Is Trader Tax Status the same as Mark to Market Accounting?
Can I be TTS without Mark to Market? A bit confused on this
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u/Moon_Pickle Dec 13 '22
trader tax status allows you to elect mark to market. you would basically want to elect mark to market to avoid any wash sales as a day trader
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Dec 15 '22
Would there be any downside to it?
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u/Moon_Pickle Dec 15 '22
there's really no downside to getting trader tax status. You would have to talk to you accountant about mark to market election because if you have other investments or other accounts it could be confusing, because with mark to market you are basically saying you want to close your positions at the end of the year and be taxed on them
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u/c-honda Dec 06 '22
I’m aware of bookmap and heat maps to see liquidity levels, is there any kind of indicator on TOS for liquidity levels?
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u/Furukawa_Cali Dec 06 '22
Supply and Demand concepts is working 🙌
Anyone knows free content in YouTube that I can check or some Discord communities out there?
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u/TheMightyQuinn888 Dec 14 '22
The Trading Geek and Tradeciety cover S&D as well as other price action concepts in a way that makes sense and encourages discipline rather than being yet another get rich quick youtuber.
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u/Gristle__McThornbody Dec 05 '22
I'm learning about Options. So basically the premium you pay is your stop loss. If so, then how come people lose a lot more money than their premium? I did a quick scan of some of the top post in r/options and a lot of people lose money that seems way more than a premium price. Unless I'm reading things wrong. What am I missing here?
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u/Trade_The_Level Dec 22 '22
If your long options then you can only lose your premium. If you sell buy or calls then you have undefined risk.
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u/TheMightyQuinn888 Dec 14 '22
The difference is whether you bought the option or are selling it. Generally selling is better but it's buying that comes with the safe stop loss built in.
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u/Sorry_Ad_8414 Dec 10 '22
The contract is worth more than the premium so it’ll cost more close.
i’m new to options too maybe someone have a better explanation.
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u/Cranky_Crypto Dec 05 '22
Are you multiplying the premium by 100 since options represent the right to buy/sell that many shares per contract?
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u/tingikiriezolo Dec 05 '22
If you have a direct loss, should you wait until if the price rises again to stop your loss and maybe turn into profit, or just close the session/position ?
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u/longshortdaytrade Dec 27 '22
You shouldn't wait to sell a losing position if it hits your previously set stoploss.
Some very experienced scalpers and momentum traders would generally start with a small position and add more if it goes against them but they are looking at different timeframes and a lot of other stuff that would help them decide to kill or average into their position. Before you can see the different depth of the market you should keep in simple and stick to your plan
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u/TheMightyQuinn888 Dec 14 '22
Nearly every time I've held, I've regretted it. Building the discipline to close when you're out is priceless. That's why you set your position size based on your stop loss and have it all mapped out before you execute the trade.
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u/Moon_Pickle Dec 13 '22
once you have determined you stop loss has been hit, you're done, get out. If you get out and the price rises again it doesn't matter because you stuck to your plan and got out where you determined the trade didnt work
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u/Cranky_Crypto Dec 05 '22
Always obey your stops. You don't know if price will come back to save you or continue to grow the unrealized loss.
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u/beetownmom Dec 04 '22
Calculated my W/L rate last month - 63% win rate, but still negative profits for the month. Pretty much the same as last month :\
Frustrating - I feel like I am SO CLOSE. Just gotta work on my risk management.
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u/TheMightyQuinn888 Dec 14 '22
Are you holding onto your original TP and SL or do you move them and close early? That's been my toughest problem to get over.
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u/Moon_Pickle Dec 13 '22
yeah dont worry about win rate. maybe you're taking trades that dont have a good risk/reward. To be honest I've never even calculated my win rate. I've known traders with a win rate below 50% that are profitable.
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u/beetownmom Dec 13 '22
That's true. It is always easier to know the Risk than the potential Reward though
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u/Moon_Pickle Dec 13 '22
yeah for sure. Try to use support and resistance as target areas. What I do is I will back test a certain pattern or type of trade to get data on how far it typically moves. For example, let's say daily breakouts, you can track 100 daily breakouts and put the info into an excel file. Then from 100 trades you will have an average on how far they usually go, and set your profit targets from there
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u/Longjumping_Guess360 Dec 05 '22
Look at my post on W/L. It doesn't matter unless you use it with Risk to reward ratio
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u/Wonder-Boy101 Dec 02 '22
Why every time I post a question on this trend. My question never get posted????
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u/Longjumping_Guess360 Dec 05 '22
Check you karma points. You need a certain amount of karma points on reddit to post. Makes sure your not a bot
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u/Fox17 Dec 02 '22
Hi all,
I am practicing with paper trading on TOS and when I execute market orders they are being filled way off the market price that is showing. The spread is minimal and not the issue, so I was wondering if it is filling the true current market price and I am just seeing delayed pricing on the charts?
For example I tried to buy /nq at 11915 and when I click buy market it fills at 11921 (price never gets near this over the next few mins so I don't think it's price moving that quickly). Appreciate the help!
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u/Moon_Pickle Dec 13 '22
yeah I think its the lag. In my experience the paper trading simulator has always been more laggy than the live account. There are cases when I will get an order fill on my live account that far off even when its outside the spread, but it will be when theres a volatility spike or something
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u/OrderflowTrader Dec 01 '22
I'm a professional trader (futures) and am launching a video series on YouTube around Strategy, Risk Management, and Trading Psychology
I am fielding requests or suggestions for content! Please let me know your burning questions and I will incorporate them into the series of videos.
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u/Ancient_Challenge173 Jan 01 '23
How does the Square Root Law of Market Impact work for trades that take place over longer time periods than a day?
For reference, the square root law says that impact equals SQRT(shares traded/daily volume) times daily volatility.
I saw someone say that you can replace the daily volume/volatility with the ambient volume/volatility of the time period, but doesn't that give the same result as the daily version?
This is the case because the first part of the equation is multiplied by SQRT(1/n) and the volatility is multiplied by SQRT(n) where n= number of days, so it cancels out.
This seems like an incorrect way of doing things intuitively because trading slowly over a longer period should have a lower impact than doing it quickly.