Author Topic: Daytrading my IRA  (Read 2014 times)

fairfaxbiker

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Daytrading my IRA
« on: February 02, 2016, 04:02:40 PM »
I was wondering if anyone else is doing this?  Here is how I do it:
-I believe in the simple Three Fund Portfolio of 60% VTI, 25% VXUS and 15% AGG
-I get 100 free trades a month at Merrill Edge (but Fidelity offers me limited margin on my IRA so I use that some)
-Keep some dry powder for the really ugly days on the market
-Trade within my 60/25/15 percentage asset allocation and try to not go above these percentages
-If I get burned (like I did in August) then my game is over and I wait until that particular trade is positive before I sell and re-buy lower (which turned around pretty quickly)
-Try and never sell at a loss because I believe in the long term success of the plan

According to portfoliovisualizer.com, my return would have been negative .76% in the year 2015.  My day trading game has netted me 5% return including dividends and taking into account trading fees in my non-taxable accounts for the same time period.

Poke some holes in this, I know deep in my heart that the ONLY CORRECT thing to do is to buy and hold and ride it out.  But this volatility has me playing the game.  If the market went up 15% last year, I would have certainly missed the boat as I was rarely ever fully invested.
« Last Edit: February 02, 2016, 04:32:00 PM by fairfaxbiker »

GrowingTheGreen

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Re: Daytrading my IRA
« Reply #1 on: February 02, 2016, 07:14:26 PM »
People who do this for a LIVING still can't reliably beat the S&P.

You're no special exception :)

AdrianC

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Re: Daytrading my IRA
« Reply #2 on: February 02, 2016, 08:17:27 PM »
How do you determine when to trade?

fairfaxbiker

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Re: Daytrading my IRA
« Reply #3 on: February 02, 2016, 08:38:34 PM »
I agree and it's been debated many times that you can't beat the market.  My decisions have been based on the belief that you can't beat the market so I buy the dips and and sell the rally.  Each time I get burned I just go do something fun and forget about it (but keep an alert set to let me know when it comes back up) and sell after I have made some money.  The big difference with my strategy is that I only buy what I believe to be my exact long term allocation.  This year, I am sitting on a chunk of cash just itching to play.  I made some $50,000 and $200,000 trades last year and scared the crap out of myself but it turned out ok.  Now I am contemplating straight up 3 fund/Betterment or Personal Capital to take the pressure off of the trading stress/fun.

tyir

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Re: Daytrading my IRA
« Reply #4 on: February 02, 2016, 08:47:33 PM »
They also say you can't time the market.

AdrianC

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Re: Daytrading my IRA
« Reply #5 on: February 03, 2016, 04:59:34 AM »
How do you decide when to trade? It can't be "buy the dips and sell the rally" and "sell after I have made some money".

You need a strategy that keeps you invested in bull markets and keeps you out of bears.

I do a bit of trading in my funny-money account, just for fun. I find it really difficult to sell.