Day Trading - An Example of How Much Money You Can Make

For some reason some people have a very hard timehappen if you are working with penny stocks. Of
understanding how people make a huge amount ofcourse the key is known which stocks to pick. John
money by buying and trading stocks every day.is now at $10,228!
You've probably seen that commercial where theyDay 10: Down 25%. If you are dealing with risky
are making fun of day traders by showing the guystocks, some days you may have a big loss. But
buying a painting and then selling it right away. That'swhat you'll see from this example is that big losses
a dumb commercial and this example will show youdon't effect things the same way that a big win
why.does. Even after this 25% loss John is still at $7671.
I will keep this example very simple to make it easyDay 11: No movement. Some days you pick a stock
to understand. In this example someone simply buysand it doesn't move up or down significantly. See Day
a stock at the beginning of each trading day and2!
then sell it at the end of the trading day. I won't getDay 12: Up 30%. John is now at $9972.
into how they pick the stock or any of that. I justDay 13: Up 100%. Another big day and like I said
want to show you how the money can ramp upthese really do happen when you are dealing with
from buying and selling stocks in this way. In mypenny stocks. They are the most volatile stocks on
example I will not consider the fees because theythe stock market (both with gains and losses.) John
should be pretty insignificant in comparison to theis now at $19,944.
earnings.Day 14: Up 50%. John is now up to $29,916! Do you
Let's say that John starts off with $1000 and hassee how quickly the money can grow once the
decided to go 20 business days (four weeks) using allamount you are investing gets bigger?
of his money to buy one single stock and then sellDay 15: No movement.
that stock at the end of the day (I wouldn't adviseDay 16: Up 300%. Another absolutely huge day! And
this strategy, it's just to make the example easier tothis time John had a lot more invested so he's all the
understand.)way up to $119,664!!!
Day 1: The stock he buys at the beginning of theDay 17: Down 10%. John is now at $107,697.
day goes up 10% by the end of the day when heDay 18: Up 3%. John is at $110,927.
sells it. He now has $1100. He now has an extra $100Day 19: Up 10%. John is at $122,020.
to invest the next day.Day 20: Up 5%. John finished with $128,121.
Day 2: The stock he picks on this day doesn't go upIn just four weeks John grew his $1000 into $128,121
at all, but it also doesn't go down. He still has $1100.in this example and that's despite 3 days where
Never every stock pick will be a winner.there was no movement and 3 days where his stock
Day 3: Up 25%! This is a big winner. His $1100 is nowpicks went down!
$1375 after a gain of $275.In comparison let's imagine that John just bought one
Day 4: Up 50%! Huge winner. His $1375 is now $2062.stock on Day 1 and kept it the whole month. Now
Day 5: Down 10%. Like I said not every stock is alet's imagine that one stock went up 100% (as
winner. John is now at $1856.unlikely as that may be.) In that case (where he
Day 6: Up 20%. He's now at $2227. Are you startingkeeps the one stock for the full month) he's only at
to see how these winning days start to really "ramp$2000! Buying and selling (and buying and selling again
up" over time?and again) got him up to $128,121 but buying and
Day 7: Up 5%. Now at $2338.holding (even when the stock went up big time) only
Day 8: Up 10%. John is now at 2572.got him to $2000.
Day 9: Up 300%. Yes, days like this can actually