Sunday, October 13, 2019

I am not a "Day Trader"

     This post is a continuation of the $50 a month stock challenge I started October 14, 2019.  Click on, "No Commission Stock Trades", on the right side of the page to read from the start. 

     The $50 a month challenge is not about being a day trader but is about making 2% a month and compounding it.

     A "day trader" has certain rules and requirements but that does mean I can do a "day trade" (in/out or out/in in any one stock in the same day) as long as I don't accede 3 day trades in a rolling 5 day period (open market days only). Stocks held overnight are just normal trades.

     To achieve 2% a month does not mean I have to make one trade that nets 2%, it just means I need to profit 2% from in total from all my trades for the month.

     Starting tomorrow, October 14, 2019 with $50 dollars, I will need to make $1 (2%) in the first month.

     $1 is rather uneventful but 2% a month (about 25% a year when compounded) sounds  much better and is scalable to any amount.

     I need to have as much of the $50 invested as possible. If I only invest $40 dollars then I would need 2.5% to make $1. With no commissions the $10 can still be invested.  Only invested money makes money, so in realty I will need slightly more than 2% total for the month.

     I will use one or more stocks to keep near 100% invested. As the account gets larger from profits and our $50 a month contributions, it will get easier to stay closer to 100% invested.

     Disclaimer, I am not a professional




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