Can you all please advice on this subject. Could you please tell or shed some light on how to become a day trader. What to do, who to register with and how to go about it. Thanks

You just do it! There is no one to register as you are playing with your own money! Just set up a trading account and trade daily! There are lots of programs to help etc.etc. DYOR

The only thing you have to remember is that you are treated as a self-employed person by the inland revenue and all the profits & losses come under income tax instead of capital gains tax.

DYOR (?) ... "do your own reading" ?

- trading account setup: any tips?
- trading commisions: any guidelines as to how much to pay - does "u get wot u pay for" apply? Or is this regulated?
- trends charting and transaction software: wot's the "best" / "simplist" - which software do most people swear by?

etc., etc.

promethus - I suggest you go to someone like comdirect, as they do a "virtual trading" platform, ie: you play with fake money. Otherwise you could get badly burnt.

Prometheus - DYOR - Do your own research.

Account setup? Depends on how much money you have to play with. Do you know what markets you want to trade? UK Sets stocks, SEAQ stocks, American stocks, commodities, indices? The list is endless.

Charting software will depend on the market you trade.

You need to narrow down your requirements before asking the day-trader question. Its a bit like saying I want to work with computers. Software, or hardware, programmer or maintenance, language?

HTH (Hope this helps)

thank-Q 4 the advice PP
I will do just that - fake sounds 2 good 2 B true (lol)

Do LOTS Of Paper trading.You can download dummy tading platforms from Deal4free/Cityindex/capitalspreads/tradindex etc.Then do it for real.Lose your pot(You will).Start again.Go on Crocs course(WWW.FTSEDOW.COM)Do not repeat previous mistakes:-)
Oh and join the Traders thread and ask lots of questions of the likes Of:Big Al/Ruth/Gausie/Treblewide/hilary/Jules/and many more.They will help.
Sounds flippant i know.But its my honest experience

than-Q Chas - I've downloaded all the FTSE Sector graphs and have grouped them by visually looking at graphic similarities over the past 4 years, ie.

- Tobacco & Personal Care share the same trend (why I know not!)
- Software & Computer Services / It Hardware / Telecomms share the same (bouncing along the bottom) trend
- 3 other groupings, etc.

I'm looking for a "sector" entry point, after which I'll look at the companies that make up that sector. Mt thoughts are, to start, buy cheap (hopefully finding a sector/s that are due 4 a recovery ... mmm) and then ID 9 to 11 companies worth researching.

But I'll try out ComDirect to get a feel for wot a traders life potentially feels like - without the pain of course!

Evening.

I've a couple of things to say based on personal experience.

Firstly, visit all the main BB's, such as this one, and ask questions. Try to learn as much as possible before committing a penny. There are many sources of reference and some excellent books on the subject by people who've traded for years.

Only trade with money you can afford to lose - you will lose it initially. Everybody does. The trick is to keep things small and stay in the game long enough to learn. This may take months or even a year or two.

The upside of trading is that everyone helps each other. I always found this amazing in such an apparently cutthroat environment. The more questions you ask on the BB's, the better IMO (in my opinion). Generally, you'll get quick and informed answers. Sites like this have some very experienced, smart operators contributing. You might like to lurk around the Traders' Thread in the Traders' Room too. Many of us reside there most days and would be happy to help.

Best of luck and take it easy. Trading is not a get rich quick scheme, but very good money can be made if you take the time and trouble to learn.

Al

Thats what i meant Bigal.Except mine came out as Bollocks:-)))

Iain

You started drinking too early! I'm off for mine now! ;-0

Oh, and another thing. We all try to have a larf too! Life's too short (or long).

I started trading part time about 2 years ago. Made a complete hash of it and lost much of my initial trading capital. Sat back and looked at what I was doing wrong. Basically I was too greedy. Now I potter around the markets some days I trade, other days I look at the screen and say , not today. I now have 10,000 in a CFD account and normally take about 1500 of profits out as pocket money each month.

My mistake was not learning my trade. Would a solcitor or accountant be let loose with money without any training? Buy a book on trading(Alexander Elder is excellent) or do as I did a year ago meet Limpy,Bullie and Croc from this site (they do regular training course at Global Market Training- www.glomtc.com). If nothing else they will make sure you know the pitfalls as well as the tricks of the trade,

Deb

Ps Thats a 10 you now owe me glomtc!

Travis.You hold the course!;-)

thanQ Travis

one more thing 4 today ... MoneyAM - which (in u're experience)is the best subscription to take, having just started out?

prometheus: Well of course the most expensive:-)

If you are starting out you will need to have live prices(unlimited) also access to good site tools and also the Traders Room for the traders gossip. That puts the best level as the Active subscription (10 per month + vat). In due course it is worth looking out also for our Free level 2 trials. They are normally for a week and will give you a taster of the professional systems the traders use.

Level 2 is a great tool and at 50+vat a month cheap for what you get, but to get the most benefit from it you will need to be glued to the screen for a few hours a day

mike(Moneyam)

PS travis, usual Wine Rack vouchers do!

Agree with the above.

Forgot to mention that it is well worth going on training courses (wish I had) and attending any or all of the fairly frequent free meetings that take place and are organised by sites such as this. Trading can be an extremely lonely game and to meet people face to face, discuss tactics, have a few beers, etc, etc is very uplifting and very informative, especially for a beginner.

As for subscriptions, move from one level to the next as and when you are ready. Eventually you will need it all, but don't swamp yourself with all the info you can get, which is considerable on the web or you'll just confuse yourself. It's a bit like taking a course. Pass level 1 and move to level 2, etc, etc.

But the most important thing, as I said above, is don't be shy. If you've got a query, ask. Someone will answer. That's what I did, even when I asked questions that seem daft now. When starting out, nothing is daft and the things that generally happen are very confusing when you're learning.

Part 2 done! Now for a bit of research.

Al

I wrote this on another BB, but was asked to post it here:


"Why I'm giving up daytrading.

Well, obviously the simple answer is "Because I'm no good at it". But that begs the question "Why aren't I any good at it"? Well I have thought very long and hard about this, so lets go back to the beginning.

The very first course I ever did was an options course in the LIFFE building when it was still in full use. I was bowled over by the buzz of the building, the traders in their jackets, the atmosphere, the vibrancy and energy. I knew that had I discovered this place at the beginning of my business lfe, then this was where I would have been at home. I just loved it. This sowed the seed of a future in futures.

I discovered Etrade (then ESI) and a year or so later I did a series of ADVFN technical analysis and trading courses with the excellent Limspfield Chartist and Bullshare (courses founded and organised by the inestimable Anthonyjb). I found that technical analysis was a language that spoke clearly to me. Charts came alive and the dry stuff of share dealing was transformed. I discovered a whole new world of interesting people and a possible lifestyle that beckoned seductively.

I first actually traded Index futures daytradiing at an ADVFN realtime training day. In that unreal environment I did very well and thought "This is the life for me". Visions of the Ferrari and the 45ft ketch loomed large. I opened my CMC cfd account and started daytrading from work. (I run my own business) And then the worst possible thing imaginable happened.....my first week was really successful. Like the coke addict, my first hit was sweet as could be. It was obvious to me that daytrading was really simple and re-inforced what I had felt when I was in the LIFFE building - why hadn't I discovered it 20 years earlier.

I discovered a private chatroom of futures and options traders and was allowed to join it - (thanks guys, you know who you are). I was made welcome and, very much the new dumb kid, I asked endless, endless questions (all of which I have seen repeated here and on etrade 1000 times) and all were answered patiently, kindly and with great humour. Wow, not only had I discovered something I really wanted to do more than anything else in the world, but I had found this fantastic private club, filled with these great guys (and sometimes a girl) in which to spend my time while doing it. And not only that, these guys were helping me too! What more could I possibly want.....

Well, needless to say it all went pearshaped. My 3 hour course in technical analysis did not make me an expert and strangely, there was a bit more to daytrading than I thought. The secret of success, apparently so easy to come by for others, was proving a tad elusive for me. Revert to plan B.

Closed CMC account. Pulled up the drawbridge and retreated for the time being. Surely the solution was to become more technically proficient. So I read a lot more books, a LOT more books. Murphy, Edwards and Magee, Achelis, DiNapoli, Nison and Linton on Technical Analysis. Pring, Lefevre, Elder, Sperandeo, Bernstein, Dalton, Farley, Piper, Schwager, Tharp, Slater, Gough, Goldstein-Jackson, Douglas (the best). I went on more courses, weeks of them (Robert Newgrosh, ADVFN, RVTaylor, RobinT etc etc). I got better, faster, realtime charting software, opened a spreadbet account and paper traded for weeks. Results were superb. OK this was it. My technical analysis skills were as good as any city analyst now. My technique was tested and honed in the red hot furnace of paper trading with a spread better. I was ready. I opened an account with a US broker to trade real index contracts, none of this smalltime cfd or spreadbet stuff for me. I was big time!!! Guess what? I lost again. And what was more, my business suffered badly during the 9 months all this took - a double whammy.

Revert to plan C. Talk to successful traders and see what I can learn. A seed of doubt was now sown. A very successful trader who I respect immensely told me I would never be a daytrader because I lacked the discipline required. This stung. Whether she said that to encourage me to try to attain discipline, or whether she really meant it I do not know. I have never been defeated by anything, surely trading was just another skill that can be learned. I was spurred to become more "disciplined", whatever that means.

Back to paper trading with a more disciplined approach. And only trade the US market in the evenings, so the business won't suffer - what a good idea. 6 weeks without a losing day! This was it. I had cracked it.The disciplined approach sure did work. It was obvious that index trading short term with the spreadbetters was impossible, so I opened a real account with a US broker again and started trading the S&P emini online. Guess what? I lost. I could hold intelligent conversations with the very best traders. I knew what I was talking about. I knew all the angles and wrinkles. I knew about risk and reward. I knew about how certain patterns do and don't work on the S&P. I knew about fib ratios. I knew the right and wrong times of day to trade. I knew technical analysis backwards. I talked the talk and walked the walk. But I couldn't trade.

Now the above spanned about 3 years, during which time I constantly watched stock charts for fun, and often wrote technical analysis pieces on this BB, but did not trade shares at all. My analysis was good, but the prospect of actually trading shares over periods of days and weeks seemed so low key and boring after the adrenaline rush of daytrading futures, so I never even considered it. I would persevere with daytrading. I KNEW if I thought hard enough, learned enough, worked hard enough at it, then it MUST come right.

Revert to plan D. Private coaching. An excellent man and very successful trader (you know who you are, and thank you) tried to help me. Without the trading screen in front of me, I learned all the right responses and gave all the right answers. "You CAN do it. I know you can" he said. I tried again and lost. Great respect to you, coach, but you was wrong. I can't do it.

But why can't I? The answer? My psychology is wrong. I am who I am and my particular psychology just isn't suited to the short time frame I was trying to trade in. I work all day and get home tired. I sit in front of the screen with sweating palms and my heart in my mouth whenever I'm in a trade. My critical faculties get shot to hell and I find I'm making trades that, when analysed in the cold light of the following day, had absolutely nothing to recommend them, yet at the time, they looked sure fire winners. Or alternatively, I wait and wait for the pattern to prove itself and enter the trade so late that the move is over and starting to reverse by the time I get in. Half formed patterns look like they must certainly complete just the way I want them to, and they then surprise me when they don't, after I have taken the trade. Why do I do these things when I am so good at analysis and can read charts so well? Fear and greed. We all suffer from these, but we all overcome them in different time frames. I have often noticed that if I'm in an argument on the phone at work, I often fly off the handle and don't get the best result that I could have got because my emotions have got the better of my critical and analytical abilities. However, if I'm in a dispute that is taking place by letter, I nearly always win because the time frame allows me to think deeply, consider all angles and come up with a winning strategy. Why have I not realised this before and considered it in conjunction with my trading? Dunno. But it sure makes sense now.

A well known inhabitant of this BB suggested that trading in a longer time frame might suit me better. I resisted because I loved daytrading and wanted to succeed at it. But for the last few weeks, I have been watching shares in a daily or even weekly timeframe. I chat with a friend on a Sunday morning about the charts. It is relaxed and fun. Prices are checked at the end of each day and adjustments made to stops and guess what? It works. The psychology of it is the same as when I'm paper trading - no stress. More likelihood of good judgements being made.

Last night, I got home and fired up the daytrading software. Sat in front of the screen with sweating palms and thumping heart. Watched the S&P and realised, with a sudden feeling of release, that I had no idea where the price was going so any trade would be a gamble. The bubble had burst. I no longer felt the need to be a daytrader.

The successsful daytraders that I know have certain learned abilities, and also certain psychological traits that enable them to make correct decisions while under extreme pressure. I have realised, after a long time, that no matter how hard I try, I do not have that ability. And that my skill lies in considering charts and weighing probabilities in a calm atmosphere. I am going to stop trying to wrench my mind into a place it will not willingly go, and play to the strengths that I have. This will be less stressful and more fun. So here's to Plan E....

dcb

PS. Just read through the above. Gosh its long! I hope some people find something useful in it."

An afterword:- Since giving up daytrading, I have had 6 consecutive record sales months in my business. Clearly, I am better suited to the kind of daily toil where the harder you work, the more you earn. I suspect that 99% of people will fall in to the same category. It takes a special kind of mindset to be a successful trader, and it's rare.

Litle Woman - you mentioned that any gains from share trading is subject to normal income tax and not capital gains tax. Is this correct? How does one declare this on their annual Tax Return? Does anyone else know anything about this? Cheers.

Not necessarily correct at all, jwsman. My local inspector is perfectly happy with me sticking to CGT rules and not treating my trading gains as income, no matter how frequent my trades. There are threads here and on other BBs that go into much greater detail and where the advice is from tax experts, which I am not. But in my experience the Inland revenue recognize that most traders lose money(!) and they don't want the losers being able to offset those losses against income tax! Your decision on whether to switch to paying income tax rather than CGT will depend on your own and family circumstance.

For proper guidance on all alternatives I reccommend consulting someone like TRIO

jwsman, it is up to the taxman how to view your earnings, but he will generally only view them as income if trading constitutes your main income. Generally speaking it will probably be better for you to wait for the taxman to query your tax forms based on CGT.