Proprietary Day Trading Firms - Which Is The Best For You?

If you are considering day trading stocks with a proprietary trading firm then you need to know some numbers before selecting a firm. Having these figures will help you evaluate what is the best firm for you in the big picture.

Regulatory and exam fees: Will you pay for these? If so, which licenses are required? If you need to acquire additional licenses, factor in how much time you need to spend studying in order to obtain the necessary licenses. Add a value of the amount of trading revenues you will not be able to gain due to studying and having to wait for all of the paperwork to be completed.

Daily minimums: Do you have to make a minimum number of trades per day/month? Or do you have to trade a minimum number of shares per day/month?

Percentage payout: What is the payout that you will get? Is the payout percentage after commissions and fees, or will fees be subtracted after your percentage?

Software fees: Do you have to pay for software fees? Or are your software fees waived with a minimum number of trades/shares per month?

Commissions, ECN fees, and borrowing fees: What is the commission rate you will be charged? Are ECN fees absorbed or charged/rebated? Will you be assessed any borrowing fees for leverage?

With these figures create a spreadsheet listing these values. List the figures for each firm you are considering, and create some hypothetical scenarios for:

• Number of trades for the month
• Average number of shares per trade
• Number of trades/shares per day
• Average gross profit per day

Run the analysis for each firm you are considering. Once you have your hypothetical "take home" amount per month, you have a good idea of which firm will best serve your needs assuming all of the "intangibles" are comparable between the firms.

If you want more free day trading tips, lessons, and articles then you are invited to visit Day Trading Stock Tips And Lessons

Reuters - Auto retailers swung to quarterly losses in the third quarter, beaten down by the decline in U.S. car sales, tight consumer credit, and a weakening U.S. economy as well as hurricane-related damages.

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Research Is The Name Of The Game

I do most of my research after the day's trading has finished. Firstly I look for stocks that have performed well today and add them to my prospect list. This number varies from time to time but the average number can be as high as 50 or so.

The reason for so many prospects is because only a small percentage will eventually match my entry criteria. So because of this I am entering new names continually on a daily basis. There is no restriction to which sector they belong to either. They could be the banking or the mining sector, I try not to have favourites, but I must admit I find this hard to do at times.

I also keep an eye out for positive company announcements and also watch to see who is buying who in the substantial stock movements. Sometimes you can pick up on a takeover about to happen before the general market latches on to what is happening.

I have quite often just jumped on this stock for the ride, made my preset profit percentage and jumped off again. Not forgetting to put a stop loss in place in case the stock retreats as they quite often prone to do.

Another area that I like to keep an eye open for is when Directors are buying their own stock. This is a good indicator that they feel that the stock will be going upwards. I have never heard of a director buying their own stock to make a loss.

Like us they are out there to make a profit. They are a lot closer to the action than we are, sometimes they have knowledge that is weeks ahead of any news or company announcements that are likely to be made. Who else knows better how a company is performing?

I then check out my list of future prospects against my entry criteria. This is a step by step plan that I have devised over time. It works for me, but it is best that you have one that you are comfortable with. Another reason is that my criteria are quite strict and would possibly not suit the average trader.

Basically if any stock does not match up to this criteria then it is put onto the back burner for review later on. (In other words I am keeping a second list of potential stocks for later on. So you always have a list of prospects handy.)

With practice it is surprisingly how quickly you can look at a chart and see if the stock is a candidate or not. This way you can whittle the list down to 2 or 3stocks.How many stocks you invest in course depends on the amount of capital you have currently available for trading. So sometimes you may be restricted to just the one stock.

Quite often my funds are tied up and are not readily available; this is the case at the moment as I have been buying quality stocks at bargain basement prices. Even with these blue chip stocks, once my profit percentage is reached I sell them.

I do have a portfolio of select stocks that are paying healthy dividends. These are for the long term and I do not get concerned over the price fluctuations that are happening lately in the stock market.

When you do your research will ultimately depend on your work commitments or your other time constraints. It is really up to you as there are no hard and fast rules as to when you do your research.

The trick is to do it regularly until it becomes a habit, like riding a bicycle, the more practice you get the more proficient you become.

Chris Strudwick is a keen successful share trader on the Australian Stock Market Visit his weblogs for more free articles and useful information at both http://www.asxnewbie.com and http://www.aussiewealthreview.com - you will glad you took the time.

Reuters - Stocks closed at their lowest levels in 5-1/2 years on Monday, extending a global sell-off as worry about the severity of a global recession and the bleak outlook for profits gripped investors.

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