One member writes:
So, yesterday I was having issues with “Buying Power” on SureTrader.com. I have $3,500 in the account and my plan was to do 10% of what you do. So when you see a stock that trips your alerts, you go all in with $5,000. I would then go all in with $500. And so forth. At the end of the day, you’d make $4,500 and I’d make $450. I figured that would work out just great. However, with the fees that SureTrader charges (and their commissions), I’m finding it harder to hold up my end. Of course that was just Friday and Monday. (Tough days).
So, I tried a new strategy, I’d just copy what you do (not $5,000…but perhaps 1,000 or 5,000 shares). This worked great for your first call of the day, and the second…but on the third I had no buying power (that happened to be DELT, by the way…which turned out to be a pretty big call). I talked with SureTrader and apparently, I can’t buy stocks under $3 on margin. And since my cash equity was already used up on BLIN (swing) and I believe it was IMNP, PHMD, or one of your earlier calls…I couldn’t jump in. So anyway…sob story aside: I need to be pickier about which alerts to jump into.
My total trading capital is about $3,000 now (thanks to commission and fees…my P/L is actually positive albeit by just a penny :)…better than what I’ve done on my own -$13,000+ in 18 months)
Margin is 6:1…but only on securities trading above $3. I can’t use margin trading pennies trading below $3.
SureTrader charges $4.95 per trade for up to 10,000 shares (and then $0.000495/share thereafter). That’s fine. The killer are the fees. Between $0.001 and $0.004 /share routing fee (on the sell only). That’s what’s been killing me. Here is an example from yesterday:
I bought 10,000 shares of TWER when you alerted at $0.1688. I sold all 10,000 at $0.1818. That netted me $130.63.
Commission -$9.90 ($4.95 a trade up to 10,000 shares)
Routing fee -$60
Misc fee -$1.24
Total profit $59.49
That’s so sad 🙁
So, I know you have a scanner…when you get alerted, what’s alerting you? The volume? I saw your answer to someone on 5 min volume candles. Do you watch the MACD, RSI, Bollinger Bands, VWAP, or any of those fancy things? And once you’re alerted, what would you recommend that someone like me also look for, for further confirmation of the move your seeing?
I’m still very excited about this and hope that I can start making some real money soon. By the way, I did finish green today $103.20. 🙂 Unfortunately, that came with $94.50 in commissions and fees.
My first thought in reading this is how many of you have a similar situation?
My first suggestion is that you need a new trading account broker. Nobody should be paying more than $10 for a trade, sometimes
less if you are an active trader and negotiate with them. Yes, trading fees are negotiable but they must see that you are very active
day in day out. Most of the main brokers like Etrade and TD Ameritrade charge $10 for any buy order and $10 for any sell order,
no matter how many shares you trade. You can’t have success if your broker is eating your profits away with trading fees.
I totally understand what you’re trying to do by following me using 10% of what I do and slowly building your account back up.
That is an excellent idea but in trying to be supportive and not be mean in anyway, with an account size that small, you probably
shouldn’t be day trading. I strongly suggest that you don’t use margin as one bad mishap could wipe you out and margin calls
are never fun. In my opinion, if you’re going to day trade and put even $1000 towards my calls, you will need at least $25k
to become successful. I break that down figuring an average of 8 trades a day (sometimes more or less) and that gives you
the leverage to avoid the 3 day clearance rule, where you will always have cash to trade the following day.
Every day I am finding excellent swing trade opportunities and I would suggest you invest in those until you get your account
back to at least $25k. Just two examples from this week are STEM (+.17) and EPRS (currently +.19). For a $2000 investment
($1000 each trade) you would have been up $825. Before you know it, your account will slowly increase back to the levels
you need to be able to take more risk and then you can throw in a few daily momentum trades. I don’t want to discourage
you in anyway but I see so many traders fizzle out because they don’t have the right tools and are looking for that “big win”
to get their account back to where they once were. As I’ve written many times before, this is a game of averages and you
will most likely win more trades than lose. But in your situation, two losers plus the commissions you are paying and poof,
you’re done and very frustrated. Hopefully my advice will help ease that frustration and get you back on track.
Regarding the scanner question, I have perfected a scanner system after months of paper trading that seems to be working
very well. I do not watch anything like the MACD, RSI, VWAP or BB. It is strictly a feel for when volume and price meet
my parameters, the stock will continue to run. It’s not perfect but I’d say it’s accurate 85% of the time. To validate
the move after my call, you should be looking at a 5 minute chart and watching L2 to watch time/sales and bid/ask levels.
I hope this exchange can help those who might be having similar problems!