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Wednesday, August 11, 1999 Published at 09:55 GMT 10:55 UK

Business: Your Money

Day trading - Your experiences

Trading on line is a way of life, problem is that too many people see the prizes but do not understand how the markets work. My advice would be if you do not understand learn but do not learn the hard way and lose all your hard earned money. Investing in the UK is so very much different and I guess in one way is very far behind in the practices of investing. Good luck to all and remember if in any doubt DO NOT INVEST WHAT YOU CAN'T AFFORD TO LOSE.
Joff, Canada

After paper trading on the currency market for three months, using an Internet based company, I made huge gains and so I decided to open a real account with real money. I opened the account with the same company I used for paper trading. I now know that it was a costly mistake. What I did not know when paper trading was that all my transactions were going through a computer broker. This meant that my orders where immediately executed with no delay and at the price I ordered. This was essential to the technique I was using for trading. Also, my stop loss and limit were always carried out exactly at my set price.
The moment I started trading with real money and a real human broker, every thing changed. First of all, half the time I could not open a trade at the price I ordered. The price I was quoted went against me most of the time. Secondly, the stop-loss I placed on my trade was hardly ever carried out at my set price, again resulting in a larger loss then I anticipated. I now know that this is how the real market works.
I just wish that the simulation, which I used for paper trading, were more realistic and that I was more informed about its shortcoming before I opened the real account. This mistake cost me $15,000. One more piece of advice, unless you have a VERY RELIABLE AND FAST INTERNET ACCESS, do not day trade on the Internet.
Maz, UK

I am working at the new firm which is going to provide a new electronic trading system to the Osaka Stock Exchange. This system called OptiMark and has already in practice in PCX in U.S.A. and also going to start working in NASDAQ in the next month.
This system has been developed because to protect the customers from being exploited by the brokers/dealers under current market structure, which means that brokers/dealers, or specialists take advantage of their incentives, being able to trade in the market shut up against the investors. OptiMark is the fair trading system and of course is open to everyone.
So, at least there is a system to adjust such unfairness and unhealthiness of the existing systems. Day trading is not the bad thing. It's a part of the economic development for all human beings. For only a few years ago, that kind of thing was totally impossible for the ordinary people like me. The most important thing is, to educate people, and let them aware of the dark side. It is essential for every one who would like to participate in trading to learn about more and not to lose common sense.
Junko Togari, Japan

I have had 3 years experience on on-line trading. I have been with discoverbrokerage for that period of time. My experience with day trading stocks has been very bad. I would put a (market order) in and not get information on it being filled for 10 or more minutes. This would end up in a loss with no control. Or a market order would be what they wanted it to be depending on a buy or sell. Not to my advantage. A limit order to my advantage would not get filled, even though the stock was at that price. There is much dishonesty with brokers and the market people.
I could fill a book, on upgrades and downgrades, that were changed the next day after people sold or bought. I am doing options now and enjoying a nice profit. These options are purchased months out. Oils are the money maker for me now. Day traders can not win, with the crooks behind the scenes. Some can as is obvious. Majority like the man in Atlanta get took. I can understand his feelings, but not his actions! He should have stopped trading after his losses became evident. It becomes a Las Vegas scenario.
Dave Hall, USA

I participated in day trading during the first four months of 1999. Made quite a bit of money on a few option trades but lost most all of it on option trades which went sour when the high tech market took a turn in the spring. If you ask me how my long term investing has fared versus the short term day trading, I will tell you that there is no comparison. Invest for the long term and pick good companies with sound fundamentals. Too many of these stocks which day traders attack are internet start-ups which are poorly funded, poorly performing. They have a huge trading base because of frontier traders manipulating the price by moving high volumes per day based on chat room conversations which take place all over the net. I now concentrate on working a sales job where the upside potential is promising. Sitting in front of a computer screen for hours on end, placing bets on stocks is no way to live or earn a living. It is pretty pathetic and I'm glad I got wise early before I gambled away huge sums.
Brett Nicoletti, USA

Possibly the best method of trading is through covered call options - even if the stock price goes down, you can still sell options on it and make money. There are plenty of internet sites about this.
Peter, US

Luckily I started out small and invested in a promising internet stock. After only 7 weeks I have lost 45% of the investment plus the commission.
Daniel Thiessen, USA

I traded for a number of months with great success. It's a matter of riding the tide, not second guessing. I did stop however when I determined it was taking too much time from my core business activities.
Roger Beery, USA

I rarely do day trade, but I am very careful about it. I am well aware of the risks, and keep it to the minimum. The last time I day traded was about a month back and I gained about 10 percent of what I invested the day earlier. I think about my trades, cutting loss to the minimum. Until now I have been lucky with my few day trades, but sooner or later, I am bound to make a mistake and get burned, but the rush to do things is always a nice feeling.
Manjul Bose, USA

I day trade S&P500 futures. I have made money, and I have lost money. But, all in all, I am way ahead. But I, unlike stock day traders, only have one position open at a time. I can not imagine trying to monitor several positions and do it well. Day trading can be very lucrative IF you keep it simple.
Lauren, USA

I day traded currency futures for a little over a month having paper traded for some six months. On paper, I made profits of $9,000.00 per week - when I started trading for real - I lost $17,000.00 over the month - and pulled out. It looks easy but don't be fooled - too many people think they can do it and can't. Did you know only 3 in 10 make money - Not good odds. It sounds wonderful to be able to work from home making untold riches in the markets - but the old saying "if its too good to be true it probably is" has a resounding truth to it. There is no such thing as a quick buck day trading.
Simon Dodkins, Cayman Islands

Yep! I got burned when I first opened my account. It was just like gambling and I was SURE I'd make a killing. Now, I've learned to settle down, do the homework, pay attention to the experts and invest for the long haul. I still like online trading, but only to save the broker commission and to get the research material/business news. On a side note: a lot of people want to dump their brokers because they are arrogant, rude and always trying to push a stock.
Wendy, USA

Day trading should be treated like any other form of investment into the stock or other markets. Investments can go up as well as down. Firms offering margin trading (credit) could be accused of encouraging a gambling mentality and allowing individuals to get in over their heads.
Only invest what you can afford to lose, do your research and try a few smaller deals or ghost trade until you have made some mistakes and learnt a lot. And use a firm that offer a secure, reliable and cost effective service - like E*TRADE.
Edward Cardozo,

Fingers burned almost all the time but never lost money yet because of a few long term holds.
Rajan, USA

Wrong? I have been trading with Datek Online and I have never had any problem. Margin requirements were respected and commission free if my trade was not executed within 60 seconds. Day trading is great experience and I will recommend it to everyone
Pierre Pruvost, UK

A fool and his money are soon parted. What business is it of the government whether or not I decide to engage in day trading, as long as I pay tax on my earnings. As for the comment made by Mr Hildreth '...Few Speculators can correctly determine the short term movement...' No kidding, if everyone could do it, it wouldn't pay!!
Jack-O, USA

Yes I did, following Charles Schwab no-commission dealing offer, overall I did not get burned. I went down and am still down on some positions I went up and profited on others (I took Freeserve but avoided eXchange for example). It is imperative that people understand what they are doing, which means research in advance.
One of the dangers is that the on-line trading firms encourage you to speculate over the odds by allowing you to invest by 50% more than the value of your portfolio. This is not dissimilar to saying to someone who has a credit card up to the limit that they haven't paid the bill on for 3 months, "hey you're having a hard time, we'll up your credit limit for you"
Individual investors do not have the resources and research readily available for independent day trading. On the other hand if an individual is taking "the longer view", such as a self invested ISA for example then it can be a sublime system, the individual however must have the determination to avoid "chasing" the market.
Alan Drew, England

I have been ghost trading (trading with pretend money) for 6 months or so. Over this time I have lost thousands of pretend pounds. This is a great way of learning how to trade without any financial risk. I one big thing it has taught me is that I would be a fool to use my own money at this point in time as I would probably lose it. Hopefully with more practice, I can correct this.
Sean Will, England

I made many trades (up to 3 or 4 a day) during the recent month (July) of commission free Internet trading with Charles Schwab. The final result was dismal. I made money at the beginning, selling already held shares, then slowly but surely built up a portfolio of losses, until my available cash (about £25K) ran out. Fortunately I don't need the money invested any time soon (golden rule #1!), so will not sell anything until it shows a reasonable gain, no matter how long it takes.
I know that in the medium term (1-3 years) I'll be a winner. But as for day trading (or even week trading), forget it, this cannot work unless you have a very large sum of money, or inside information, or if you happen to trade during a period when the market shoots up. I will continue to trade actively over the Internet, but will not expect to do well in the short term. I'll also go where the commissions are lowest, and will not hesitate to leave Charles Schwab if someone else does a cheaper service.
Chris Stuart, UK

It's much easier (and a hell of a lot cheaper) to invest in US companies than it is to invest in local UK companies. Which is a shame for UK businesses really.
Marcus Curran, UK

It is extremely difficult to make money out of the stock market in the short term. Usually you have to tie up your capital for a period of years to achieve a worthwhile return. The only short-term success I've ever had was courtesy of Freeserve last week. Fortunately for me, I sold at a large profit shortly before the market flooded with like-minded investors looking to make a quick killing.
Matthew Daniels, England

Have you tried your luck at trading on the Web? Was it a prosperous experience or did you get your fingers burned?

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