Call me crazy, but after being laid off for more than two months now, I've been trying to come up with unorthodox ideas for how to earn a living, and my latest cockamamie idea is that maybe I could try my hand at day trading?
I've been playing around with my own fake portfolio for the past few weeks with pretty decent success so far, although in the real world I realize things probably wouldn't work out quite so easily. (it's always easier to play with fake money than your own real money!)
I'd especially like to know what the rules are in Canada, as I know in the US you cannot day trade unless you've got an account with $25,000 in it. I've searched to see if such rules exist in Canada and haven't found anything so far.
So if I did end up doing it, my plan would be to open an account with BMO Investorline (their rates are $29.95 per trade at first, but once you get to the frequent trader status it goes down to $9.95 per trade) and I would do all of my trades based on a $10,000 investment. I figure if I can average even $200 a day in profit I can make a living doing this, at least for a little while. I think one of the things I'd have going for me right now is that the stock markets are pretty much close to the bottom and in the next few years the trend will be upwards. So it'll be a lot easier to pick "winners" with this type of atmosphere.
The trickiest thing is learning how to pick the right stocks! So far my pattern has been to look at the top performers of that day or the day before, as they tend to continue to go up slightly from what I've seen. I see a lot of the top performers that go up 20 to 30% in one day, there was one here on the Toronto Stock Exchange yesterday that almost doubled in value! (imagine if I had invested $10k in that, and made almost $10k in one day!) In my practice account I simply buy one stock at a time and hold onto it for a half hour or an hour, and once it goes up a few cents then I sell. I like to pick stuff that's priced in the $1 to $5 range as I find they move quicker than stuff that's priced much higher. I also haven't been sitting in front of the computer the entire day, I tend to just play around for a couple of hours in the morning and then once I've made a couple of hundred I stop for the day. That's how I would do it in real life too. The last thing I'd want is to be glued to a computer screen for an entire day (that's what I did for 17 years, doing color correction and retouching in Photoshop!)
Am I completely nuts for thinking this might just be a new career for me? I like the idea of making my own hours, especially if I only have to work one or two hours a day from home! I don't even need to make as much money as I did in my previous job, as I save a lot of money right now by not having to pay for daycare for my son (he's in school a full day but we paid $300 a month for before/after school care) and also save a lot of money in gas by not having to drive to work as well. So I figured even if I made only $40 or $45k a year doing this, I could survive quite easily.
If I did decide to do it, I would set myself a rule that my initial $10,000 is all the money I'm going to use, and I wouldn't do anything foolish like buying on margin or borrowing more money to make trades. A lot of people go into day trading because they want to try to make a million bucks in a year, and that makes them more risky and they probably do more foolish things. If I did get into it, I'd be a lot more cautious, and would be happy just making a few hundred bucks a day. I would also set aside some of my earnings into more stable investments as well, so eventually I'd have other cash to draw from to pay the bills if I went on a long losing streak.
At this point I'd have to say it's highly unlikely I would end up choosing this as a career but it's very tempting and I'd at least like to research it for a while and see if it could possibly work. I'm definitely planning on playing around with my practice account for a little while to see what I can learn first. I'd never even dream of jumping into this without a lot more knowledge.
I've been playing around with my own fake portfolio for the past few weeks with pretty decent success so far, although in the real world I realize things probably wouldn't work out quite so easily. (it's always easier to play with fake money than your own real money!)
I'd especially like to know what the rules are in Canada, as I know in the US you cannot day trade unless you've got an account with $25,000 in it. I've searched to see if such rules exist in Canada and haven't found anything so far.
So if I did end up doing it, my plan would be to open an account with BMO Investorline (their rates are $29.95 per trade at first, but once you get to the frequent trader status it goes down to $9.95 per trade) and I would do all of my trades based on a $10,000 investment. I figure if I can average even $200 a day in profit I can make a living doing this, at least for a little while. I think one of the things I'd have going for me right now is that the stock markets are pretty much close to the bottom and in the next few years the trend will be upwards. So it'll be a lot easier to pick "winners" with this type of atmosphere.
The trickiest thing is learning how to pick the right stocks! So far my pattern has been to look at the top performers of that day or the day before, as they tend to continue to go up slightly from what I've seen. I see a lot of the top performers that go up 20 to 30% in one day, there was one here on the Toronto Stock Exchange yesterday that almost doubled in value! (imagine if I had invested $10k in that, and made almost $10k in one day!) In my practice account I simply buy one stock at a time and hold onto it for a half hour or an hour, and once it goes up a few cents then I sell. I like to pick stuff that's priced in the $1 to $5 range as I find they move quicker than stuff that's priced much higher. I also haven't been sitting in front of the computer the entire day, I tend to just play around for a couple of hours in the morning and then once I've made a couple of hundred I stop for the day. That's how I would do it in real life too. The last thing I'd want is to be glued to a computer screen for an entire day (that's what I did for 17 years, doing color correction and retouching in Photoshop!)
Am I completely nuts for thinking this might just be a new career for me? I like the idea of making my own hours, especially if I only have to work one or two hours a day from home! I don't even need to make as much money as I did in my previous job, as I save a lot of money right now by not having to pay for daycare for my son (he's in school a full day but we paid $300 a month for before/after school care) and also save a lot of money in gas by not having to drive to work as well. So I figured even if I made only $40 or $45k a year doing this, I could survive quite easily.
If I did decide to do it, I would set myself a rule that my initial $10,000 is all the money I'm going to use, and I wouldn't do anything foolish like buying on margin or borrowing more money to make trades. A lot of people go into day trading because they want to try to make a million bucks in a year, and that makes them more risky and they probably do more foolish things. If I did get into it, I'd be a lot more cautious, and would be happy just making a few hundred bucks a day. I would also set aside some of my earnings into more stable investments as well, so eventually I'd have other cash to draw from to pay the bills if I went on a long losing streak.
At this point I'd have to say it's highly unlikely I would end up choosing this as a career but it's very tempting and I'd at least like to research it for a while and see if it could possibly work. I'm definitely planning on playing around with my practice account for a little while to see what I can learn first. I'd never even dream of jumping into this without a lot more knowledge.
