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I was thinking about doing a small investment test and was thinking of using one of those cheap day trade sites.
The charge of $7 a trade sounds good, but not for small trades.
But the ability to just do it when and how I want without a 'pro' talking me out of something or waiting for them to respond seems worth it.
so do any of you use them, do you like them? Any serious issues? Favorites?
Things to look out for?
It does not seem to allow you to trade currencies or other commodoties, which is a bummer.
First off, you can't "pattern day trade" with any broker unless you have $50K in the account. If you day trade more than 3 times (5 times?) a month they can hit you with a margin call requiring you to put that money down; the first time they'll give you a reprieve, second time they'll probably shut down your account and hit you with penalties.
Second, you can trade certain futures with these brokers, but commodities are represented mainly through exchange-traded funds (ETF). For example, GLD, which has substantial gold holdings and is intended to mimic the performance of "paper gold." If you want to actually own the commodity, then just buy gold bullion or whatever and rent a safe deposit box. It'll be less expensive than ETrade's nasty quarterly fees.
The best option for someone who just wants to dabble is a stock-exchange game like the VSE. The commission rates are too high to justify speculating with small money - take it from someone who fell into that trap and had to dedicate way too much time to reversing all the damage he did to his little retirement account.
I use ING Sharebuilder, which is NOT for daytraders, but I love it. I do my own research and buy my own picks, and automatic weekly trades at $4 a trade are cheap enough for me. It's a great site, and I urge you to check it out even if it isn't really suited to your needs. Good luck!
I use Scottrade and love it. Trades are $7.00 and executed instantly, and I've never had any issues. Also, they will allow you to day-trade with a $25,000 minimum.
First off, you can't "pattern day trade" with any broker unless you have $50K in the account. If you day trade more than 3 times (5 times?) a month they can hit you with a margin call requiring you to put that money down;
This is incorrect. $25k is the minimum required for daytrading, and you get flagged a pattern daytrader for daytrading more than 3 times in a 5-business day period. (This just applies to DAYTRADES--you can trade as often as you like if they're overnight trades.)
Anyhoo, Thatguywho, it sounds like from your description that you may really just be looking for a discount broker as opposed to a full-service broker and not necessarily the best platform for daytrading. If you DO want a cheap daytrading platform and the ability to trade futures, forex, etc., Interactive Brokers is a popular one, but it's not for newbies. Better to start with a virtual trading site (like sonnarat suggested) or something like Scottrade first, IMHO.
I do not really want to sit and play the stock market everyday, just buy stocks now and then. Buying less than 3 different companies a week could be hard and I am not gonna go all 'pattern for 25,000 alex' on it...
I imagine I can buy a whole bunch of different stocks at once and have it only count as one trade, we'll see.
I did decide on scottrade though due to I am only going to be buying 100 bucks of stocks here and there. Nothing big.
Seems like the right way to stay out of trouble to me.
I do not really want to sit and play the stock market everyday, just buy stocks now and then. Buying less than 3 different companies a week could be hard and I am not gonna go all 'pattern for 25,000 alex' on it...
I imagine I can buy a whole bunch of different stocks at once and have it only count as one trade, we'll see.
Nope, they'll all count as different trades..
Quote:
I did decide on scottrade though due to I am only going to be buying 100 bucks of stocks here and there. Nothing big.
Seems like the right way to stay out of trouble to me.
If it's only $100 at a time then you might as well make a trip to Vegas, at least you get free booze.
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