I have recently quit my job (thus this post;I have free time now, amazing) to try my hand in the world of stock trading. I began with a paltry sum on $5000 US on a Monday last month (August. 22, 05). I opened a Scottrade account and began my venture. I grew tired of working for someone else, busting my balls to buy the boss a boat. I saved my pennies for a few months, and took a big risk (much to the dismay of my boss, my mother, and my girlfriend. They all said I was crazy). Between working for the man, going to school, and driving all over these damn Southern California freeways, I had little to no spare time. My only availiable time was on weekends, but then there was always home maintenance, reparing automobiles, and other busy work. This was no way to live, and I was fed up, so I made a change.

Before I proceed, I must clarify an issue. There are two general methods of stock brokering: investing, and trading. Investing involves placing large amounts of money in a company, and waiting for it to grow. This is relatively secure, but with a low immediate yield. Investors do this when they want to have money for retirement or are interested in long-term security. They invest over many years, and yield exponentially as time passes. Little to no active trading is done, unless the investor wishes to cash out after a large gain (or loss).

On the other hand is trading. Trading has little concern for the long haul. Traders buy and sell several times, daily. Traders are more concerned buying and seeling quickly for a fast turnaround. Where investors await large change, traders are nickel-and-dimers. This is where I fall in. I may buy a share for a dollar. If I see it has raised to a dollar fifteen, I sell immediately. Bad investing, good trading. I just made a ten percent return. If had bought, say, 1000 shares at a buck a piece, I spent $1021 (after trading commissions). However, I sold at $1150, bringing me a profit of $129. Nothing spectacular by any means, but when done two or three times a day, it becomes quite a nice size of spending money.

Ok, now back to my story. I started trading $5000. This morning, I made three trades and cashed out. I have just checked my account balance, and was pleased to find a $425 dollar profit for today only. Over the past week, I have been averaging about a $300 daily profit. This means, that in addition to the $5000 already there, each day I add another $300 to the total sum. I've cashed out about one third of that profit each day for living expenses, meaning I put $100 in my pocket and $200 back into the trading pool, allowing for greater profit in the very near future.

So, my daily income is $100 a day, for about an hour and a half of work. Now, this work involves sitting on my posterior, clicking refresh and trade buttons, and typing in a few characters every few minutes. This is, quite easily, the smartest move I have ever made.

In my previous job, I would work 8 hours, walking the warehouse floor in the heat and dust to make $120 a day. However, after adding in gasoline, automotive wear, lunch, and the like, I was bringing home about $100 a day, for 8 hours (ten really, after lunch and driving). I make the same from my desk in two hours, then go outside and ride my motorcycle, go to the beach, take my time at school, and just have a good time in general.

Unfortunately, there really is no point to the story, other than to inform the Massassians that there is money to be made, and you don't have to make the same way everyone else does. Consider it a free economics lesson (I graduate with a B.S. in Economics this coming June, in other news).

Please inform the rest of us what you do to earn your income (if any), and why you do it.

[Upon re-reading the post, I would like to clarify something. I am by no means and expert in this fields, and am very new at it. I cannot claim the the results I have encountered are typical. All those I have talked before getting into the exchange (my "mentors") have told me this is slightly above average. My advice is this: if you want to try it, keep your day job. Although, it's hard to trade actively when one is at work, so that may not work. Ah well, just a disclaimer.]

Cool!
I've always been wanting to do something like that..

If it really was that easy, everybody would be doing it. Methinks you're going to find out why they're not very soon.

ive always been curious if anyone could simply make a day trading software that automatically buys stocks that are rising and sells them immiately when they stop rising

It's not as simple as that, Freelancer. The majority of people cannot simply quit their job and throw $5000 into the wind like I did. Most people have families, mortgages, car payments. I have none of that, and have saved up a fair sum as a contigency (in addition to the $5000). One cannot work during the day as well as trade actively, and as you pointed out, things can very rapidly change. However, if one is willing to take the risk, it can be quite profitable.

I don't make a whole lot of money anyway. $150 a day won't feed a family or pay the house payment, but it covers education and transportation costs for me quite nicely, with time to spare, and that's all I really care about.

Uh, yeah it will. 150 bucks a day is more than 50 grand a year. If you can't feed a family and pay house payments with that (and you don't live in California), you have problems.

Edit: haha, just realized that you do live in CA. Uhm.. well, move. Seriously. The cost of living in CA is ****ing ridiculous. Move anywhere else and 50k/yr is an exremely livable income.

Sounds like you should be looking for a job in a brokerage firm once you complete your studies.

No, it's only $36,000 a year. $150 a day X 5 days a week (markets closed on weekends) X 4 weeks a month x 12 months). And yes, I do live in California. Southern California. It's really not that much.

I considered that, Spork, but that would take me back to my quandry at my other job - it's a job, and it's making money for someone else. I've ran some numbers, and I can save $25,000 for active trading in the next few years (until graduatio from the post-graduate program), I should be set to retire by 40 years olf, if conditions remain as they are (that's the risky part -- no pension plan).

the markets are closed on weekends? well damn.

Hey...

Wanna be my broker?

You also have to consider what you want. Do you find what you do fulfilling? It seems like unless you have a job you're not really contributing to society. Maybe that's just me.

Sounds like it's working well for you. Congratulations! Hopefully, you don't get stuck in some downfall.

i'm sure that $150 a day is more important to him than helping people with their fries or selling some carpet.

That is one of my concerns, Freelancer.

A job doesn't necessarily equate to social value (my warehouse job didn't do society any good), but I still feel I need to do something. I feel I have a moral implication to do some good for people, now that I have time and some freed up resources. I already put in many hours a week at the church I attend (we give food and clothing to the needy families in the area), as well as working in their more technological areas. Yet now that I have time, I think I will try to do more. I need to do some homework and see what else I can do.

My only idea so far is to help people do what I do (not to the same extreme that I took, of course), but to help people become more financially aware of what their options are. Instead of putting money into their company's 401(k), they might consider investing in a long term mutual or buying a Tax Lien (which can run up 16%). I've done a lot of reading and studying about the financial options availiable, and I have determined that the leading problem is financial ignorance. Most people just don't know what their options are, and schools and textbooks don't give that sort of information. Maybe, after I get up and running, and become more personally knowledgeable, I can give assistence in that area.

It sounds great and I'm glad it's working out for you, but someone like me who knows absolutely nothing about economics would be taking a big chance doing something like that. Maybe I should change my major...

I'm currently doing technical support for a broadband company, AKA getting cursed for a living. I'm looking into getting something more hands-on, and I have an interview tomorrow, but the jobs requires extensive travel.

Congrats!

I plan on doing the same thing as Hellequin soon, only with real estate.

Page: IRS Code 1031(a) is your friend. Ask your tax man about it. Also, corporate. I'm in the process now.

Good luck, dude. Just remeber that day trading can be a lot like gambling. You're not always going to win. The more you know about what you're doing though, the better of you'll be.

So the market just closed. After tallying up the day's transactions, it seems I net'ed $490 bucks! Holy mother of kak! That's the largest to date (and probably will be for a long time to come). I took a hit early this morning and had to sell for a loss, so I made a few more trades, and when I checked it again after lunch, one certain share had gone up a whole freaking quarter. It banked me $250. Drinks are on me.

So how exactly does it work? Once you sell some shares, how long is it until you actually have spendable cash in your hand?

A 1500% annual return ($300 per weekday on a $5000 investment) is "slightly above average" much in the same way a 24-foot-long penis is.

It's kind of like paypal, where I send them money, and they send it to others.

I send money to the broker from bank account (wired, or drop off a check at the office). Then, they deposit that money into my trade account, where I use it to trade. It's my money, but it's not readily accessible like in a bank where I can use an ATm card or go to a teller. If I want my money out of my trade account, I send the request and they wire it back to the bank or send me a check. Wiring costs $10, but a check takes two weeks, and then the bank has to clear it.

As far as the high return, you have to bear in mind that I have been depositing most of my earnings back into the trade account. It is a high return, but there are days when I lose money (like last Thursday, I was out 80 bucks). It's also very, very risky, but I am willing to take that risk.

Someone gave me some very good advice one time.

"If you're to be ruined, do it before you're thirty years old."

I must know: did you actually do the math to make sure that 24/0.7 ~ 1500/(some reasonable return) ??

Assuming a penis length of 0.7 feet, you'd have a return of 35%. :p I just don't know if that's a slightly above average return for a stock trader or not. (Come to think of it, I don't know if that's slightly above average for a penis or not )

thanks for the advice. As soon as the market drops, I'm going to jump into the Real Estate market. Right now, i'm just biding my time. (If i were to jump in now, I would end up overpaying and it would suck a few years fdown the line to owe $800K on a property that is worth about 500-600K at that time) My plan is to buy and hold (and gain income from rents) , not flip, so it doesn't matter too much if the market goes down after I buy.

I definitely plan to incorporate, if just for liability protection (if all of my most valuable assets are owned by my corporation, and some a**hole sues me, they sure aren't getting very much b/c me and my corp. are seperate legal entities. If their case is against me, then they can't touch my corporate holdings) I'm looking at an S-corp, b/c that variety would probably suit my needs. I plan to incorporate in Nevada.

I've always been interested in trading, just never knew anything about. Maybe I just liked the idea of sitting on my computer all day and making money at the same time. Well, good luck, I hope your good furtune does not run out.

I don't fully understand the stock market, maybe you could clarify. What influences the prices? Is it the companies success/failure or just the constant trading of stocks...or is it both?

People buy stock because they believe the company is doing (or about to do) well. As people buy more, the stock is considered to be worth more. And visversa.

$150 a day, and you're just sitting at your computer?! I pull stuff off trucks and move it to the shelves, and I don't even make $150 a week! Screw this job! I must learn to do what you are doing.

Sounds like a pretty good deal to me. I'll be looking for you and your 'system' on the late-night informercials.

Seriously though, what percentage of your income goes towards brokerage and associated fees? Also, how is this income reported to the IRS? It's not just a standard 1040 is it?

Hellequin: How do you pick your stocks, and what companies do you own right now?

I REALLY need to brush up on stock trading knowledge and tactics, I have learned huge amounts of info on Real estate investing, but I know very little about stocks.

A lot of people buy only after the stock has been going up, but the people that get in early really clean up since they buy the stock while its still low. I really should learn how to do that...

I only buy stocks that are less that $3/share. If I see it has gone up a nickel or a dime, I sell and buy another one. I own the stock for maybe a few hours, never more than a few days. I tend to pick stocks somewhat at random, but I find that more and more my TV is tuned to CNBC, I wath Lou Dobbs, and I pick up the copy of The Wall Street Journal when I am waiting to get my haircut or be seen by the dentist.

At this very moment, I own only one. I kept it because at market closing it was down a nickel and I am hoping it will pop up again in the morning so I don't lose my money. Usually, however, I sell them all off before market close (I am told this not a wise practice, however, and am considering how to stop this habit)

I see, so you're pretty much a day trader. About how many shares do you work with usually? At $3/share it's pretty low stakes, so I might check this out. I don't have that much money right now, so this sounds like a good way to pick up some cash on the side to help pay my debts.

The tactic that i'm most likely to use when i seriously get into the market is to buy IPOs, hold it for a few weeks, and then dump it when the price goes up enough. I wish I'd done that with Google.

.7ft is bigger than the average penis, which is around .5feet.

How much porn did you have to sift through to find that out? :p

How much money would one need to get started in such a venture, and who do you do your trading through? I'm unemployed as of yesterday, and while I have an interview with another company in less than two hours, I'm always open to the idea of making more money. At this moment, I have about $500 that I can play with, safely.

You're also making another (common but fatal) error that most people make. You are forgetting to set aside money for taxes. Being single with no dependants, you should be setting aside 25% of everything you earn in a day to cover the cost of tax the IRS is going to hit you with at the end of the year when you report your gross income and realize that you haven't been "with-holding" any of it for tax (like your employer did).

Single largest mistake that investors make is that they don't treat what they do like a buisness. And yes, it's a good idea to go as far as getting a buisness license and thus effectively "creating" a new company...YOUR company. With this, you'll get tax breaks and such. The only big difference is that you'll pay yourself a flat salary (which you can change over time as your "company" does better buisness). Again, just remember to with-hold out of your salary enough to cover your taxes at the end of the year.

Awesome stuff. Good luck ]-[.

Most people don't day trade because it is normal to find security in a stable job. The stock market is too volatile, and people don't know enough to feel confident in active day trading.

...not to mention if no one worked, there wouldn't be any stocks...

Bah, I'm out $40 today.

I'm all covered on the tax end. I've thoroughly researched the legal and taxable implications of this venture. I'm waiting on the feds to get my tax number. (I'm already done with the Sectretary of State. That way all my expenses can go on the company account.

It only takes $500 to open a Scottrade account. It's kinda risky, but it's very, very fun, and very interesting. You'll learn a lot, and maybe make some pocket change in the process, but keep your day job.

tl;dr

Hello *******.