Friday, April 17, 2009

Do people really make a living day trading?

I've been curious to see if the average person without much knowledge of the stock market could actually make a living doing day trading, so I decided to do a little experiment. I've given myself $10,000 to start off and every morning I'm going to "buy" shares in whatever was the previous day's top performer on the Toronto Stock Exchange. I'll hold those shares for an hour or two, waiting for them to rise a little bit (or selling them if they drop 5%), and start again on the next trading day with a new stock. I'll let you guys know how my picks are doing on this blog. Yesterday was the first day doing it and the stock I picked went from $1.22 to $1.31 in a few short hours, so my portfolio went from $10,000 to $10,737! That's not bad for a day's "work" :) Today's pick went from $4.25 to $5.00 in the first hour, so my portfolio is now $12,631! I sure wish I had $10,000 to play with right now! :) Obviously if one were to play the market like this for real there would be a lot of down days too, so you'd obviously have to be prepared for that too. I think I would probably do things on the safe side, and try not to get too greedy and hang onto a stock too long once it's rising, that's probably where a lot of people get into trouble. They are trying to make a million dollars in one year, where I'd just be happy making $60,000 to $70,000 a year.

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