Is Day Trading The Way To Make Money In The Stock Market?

Call your broker and tell that you want to day trade- long (to the upside) and short(to the downside): putting the account to cash at the end of the day.

What will be the answer?

We often heard it: “Oh you want to take on some indefinite or infinite risk?”

Is that true?

Not at all. You take on the same or even less calculated risk than owning a stock. Socks can go to Zero: Check how many stocks actually traded to zero on May 6, 2010. Please check out what CNBC had to day:

 http://www.youtube.com/watch?v=AwlQ5PjITJ8&feature=related

One thing is for certain: “most people never been educated in how to trade the financial markets to offset a potential risk by applying an appropriate investment strategy. “A hammer in the hand of a little child can lead to unwanted bruises or damage, in the hand of an educated craftsman to outstanding results.” The difference in-between is education and practice.

Our days only about 2% of the population is educated to care about their own money. Most people believe they are better on leaving their financial future relying on a third person. A key argument we get told:”if your car needs to be fixed, what do you do? You bring it to a car repair service, specialized to get the job done for you.”

On the side of your money, if you doubled what you invested in the last 7 years then you are at a rate of 7% annual return. If your account does not show a doubling over 7 years you need to think what is going wrong and how you can benefit on your own within trading the markets and making constant income if the market goes up, down or sideways.

NeverLossTrading.com is a premier institution to teach small groups of people (up to 15) to manage after 3 days their financial future.

Depending on the individual focus they target returns of 2-3% a day, week, month and give you easy to follow trade setups, indicators and a trading plans that helps to strive for the specific set goals.

Key to their education is that they commit that after 3 days you are ready to trade. Not only that you gone be ready to trade, you will leave, knowing how to leverage and hedge your assets. In addition they offer a member ship program where you can continuously, once a week get market feedback and all questions answered you still might have.

They offer small group classes only and rather call it a workshop than a class. When you leave you will have your computer setup with your trading platform ready to trade.

In our interview they said, lately they have more people coming with an interest in day trading. Surly NeverLossTrading has a specially designed program for day traders. The key obstacle for people to learn how to day trade is their inner voice, that is constantly telling: “day trading more risky.”

Why is this concern so dominant? We got taught that way through generations and now we believe this is true. The answer of NeverLossTrading is: “every trade carries a risk, but we want to bring it to a calculated risk reward, where people get taught where to enter, take profits and put their stops in case the trade reverses.

Everybody who goes through their classes feels confident and prepared for the financial markets after.

If you still think that day trading is dangerous, you might want to read the following article originally published by Bloomberg on Goldman Sachs, who made record wins in the year where Bear Sterns and Leman Brother went out of business – and where did those profits come from: “day trading.” Hence, there must be something about day trading, which people our days shall learn to care about their financial future. Please check the following link for the original article.

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=am7Ds.JhNxvw


Goldman Sachs $100 Million Trading Days Reach Record (Update3)

By Christine Harper - August 5, 2009 12:13 EDT

Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc. made more than $100 million in trading revenue on a record 46 separate days during the second quarter, or 71 percent of the time, breaking the previous high of 34 days in the prior three months.

Trading losses occurred on two days during April, May and June, down from eight in the first quarter, the New York-based bank said today in a filing with the U.S. Securities and Exchange Commission. The company made at least $50 million on 58 of the 65 trading days in the period, or 89 percent of the time.

Goldman Sachs, which was the biggest U.S. securities firm before converting to a bank last year, posted the biggest profit in its history during the second quarter as revenue from trading and equity underwriting reached all-time highs. The company, which has returned $10 billion to the U.S. Treasury and paid $1.42 billion in dividends and to cancel warrants, also made its largest market bets during the period.

“It’s very counterintuitive to think that they’d be able to generate this much profit and this much revenue in the middle of an ongoing recession,” said William Cohan, a former banker at JPMorgan Chase & Co. and Lazard Ltd. and author of “House of Cards” about the collapse of Bear Stearns Cos. “But the fact that so many of their competitors are out of business or severely wounded has put them in a very strong position.”

Trading Days

In fiscal year 2008, the firm had 90 days in which traders made more than $100 million, compared with 88 in 2007. In fiscal 2006, the figure was 49 days, up from 18 in 2005 and 14 in 2004. Goldman Sachs changed its fiscal year in 2009 to end in December instead of November.

Goldman Sachs’s trading results reflected the firm’s willingness to take on more risk during the period. Value-at- risk, an estimate of how much the firm could lose in any given day, rose to an average of $245 million in the second quarter from $240 million in the first quarter and $184 million in the second quarter of 2008. Most of the increase in the second quarter came from bets on equities, the company said.

“They take risks for their clients and for themselves and they’ve figured out a way in this market, with less competition bidding for these things, to make money,” Cohan said.

Trading and principal investments accounted for 78 percent of the bank’s revenue in the second quarter of 2009, up from 59 percent in the second quarter of 2008. Net interest income, the difference between the interest the firm pays and what it charges, climbed 60 percent from the second quarter of 2008 as the company’s interest expense dropped 83 percent.

FDIC Backing

Banks such as Goldman Sachs are benefiting from lower borrowing costs after the Federal Deposit Insurance Corp. in October started guaranteeing bank debt issues that mature within three years. Goldman Sachs said in today’s filing it had $25.1 billion of debt guaranteed by the FDIC under the agency’s Temporary Liquidity Guarantee Program. The bank sold about $30 billion of the FDIC-backed securities between November and March, according to company filings.

Today’s filing showed the weighted average interest rate paid by Goldman Sachs on its unsecured short-term borrowings dropped to 1.70 percent in June from 2.14 percent in March and from 3.37 percent in November.

Goldman Sachs is cooperating with government agencies and regulators making inquiries into its compensation practices, according to the filing. The board is reviewing letters from shareholders demanding an investigation of pay practices and recovery of any “excessive compensation,” the filing showed.

The company said it received inquiries from regulators about credit derivative instruments, and is cooperating. Goldman Sachs settled a lawsuit related to Enron Corp. on Aug. 3 and is waiting court approval. The filing didn’t provide details on the case or identify any of the regulators.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.