Stock Advice

Gigastrength
Gigastrength

I've been building a stock market predicting program for about a year now, using a yahoo api to collect prices. Basically, it finds about 20 or so stocks which are likely to have a higher price tomorrow than they do today. Based on my simulations of the 2015 year in trading, with just the price of stocks, I would have seen a return of just over 150%. But I know nothing about the cost of trading, like brokers and taxes and such.

I was wondering what the best course of action would be if I wanted to sell off all of my shares and buy a new set of stocks daily. How much do I expect to pay for a broker/online service? Where is the best place to do this trading? and where do I start?

Most importantly, since the stock prediction is entirely automated, if I could also automate the trading that would be ideal. Recommendations?

SniperWish
SniperWish

A few things to consider (all of these things assume you're in the US):

If you are regularly day trading, FINRA requires you to have a minimum equity balance of $25,000. Google "pattern day trader" for the specifics.

Most discount brokers charge less than $10 per trade, so if you're trading decently large blocks of stock, this isn't that significant of a cost. A lot of people here recommend Robinhood, which has no trading commissions. I've never used it, so I can't say if its any good or not.

Any time you sell a stock that you've held for less than one year, you'll pay capital gains taxes at your marginal income tax rate. Any capital losses you realize can be used to offset capital gains.

StrangeWizard
StrangeWizard

That's very helpful. I've been reading about the day trading rules for a while already, but I'm wondering if you hold a security at the end of one trading day, and sell it the next, do these rules still apply?

I'm a broke as shit medical student. I wrote this as a pet project. I don't have $25,000 to invest so that could be an issue. I definitely won't be making enough from the project (at least right now) to be subject to capital gains tax.

I'll look into Robinhood.

Supergrass
Supergrass

robinhood is retarded for day trading, yeah no fees but they fuck you otherways.. i'd try to save up 25k then go for it...15% returns is like ponzi scheme shit lol.. i got 8% returns on my index funds this year soooo... if you could actually predict stocks and had a program like that you could start a hedge fund and invest for rich ass niggas..

Need_TLC
Need_TLC

I don't have $25,000 to invest so that could be an issue
From what I've read that only applies if you're trading from a margin account, not a cash account.

Garbage Can Lid
Garbage Can Lid

I don't want to shit in OP's scheme, but what are the chances of him hitting upon a magic stock formula? Probably not good.

Soft_member
Soft_member

OP here, I know what the chances of that are. It's just a neat little pet project that has showed more promise than I had expected. But I do think it can work.

Really not that interested in trying to do that, especially since I've got another 8 years of being relatively poor. Also my scheme assumes that my investments wont impact the price, which I think will break down the more money I dump in.

takes2long
takes2long

You can't really day trade with a cash account though because you'll violate Regulation T (i.e. you can't sell a security until it is settled, which takes three days). I don't know the exact laws, but if you do this more than a few times, you'll have your account frozen for a free-ride violation.

if you hold a security at the end of one trading day, and sell it the next, do these rules still apply?
If you have a margin account (which only requires a $2,000 minimum, balance), I think you are okay doing this but you'd want to check with your broker to be sure.

SniperWish
SniperWish

You can't really day trade with a cash account though because you'll violate Regulation T
Most brokers automatically prevent you from free-riding. That's just FINRA trying to scare off retail investors.

Harmless_Venom
Harmless_Venom

If you have a margin account they will, but if you just have a cash account, the broker will probably give you a warning the first couple of times and eventually freeze your account if you keep doing it.

happy_sad
happy_sad

Or you can just keep an eye on your settled funds and not exceed them.
You can buy and sell as rapidly as you like as long as you segregate settled and unsettled funds. Which my broker does for me.

Techpill
Techpill

True. If you're only day trading a portion of your portfolio, you can make it work.

Supergrass
Supergrass

Yeah. Again Reg T is for margin accounts too. Isn't it?

Garbage Can Lid
Garbage Can Lid

Sorry op but this must be completly bullshit. There is no way u just found a pattern in stock prices which everyone in the financial world just missed. Do yourself a favor and dont automate it. Use ur progran to do manual trades if u actually think u found arbitrage

5mileys
5mileys

the only cons of robinhood is that if you aren't using gold (premium) you have to wait a while for your money to clear to your robinhood account. This can be a game breaker for people who need to day trade but want to not have premium paid service.

For everyone else who doesn't care about investing speed, Robinhood is a great choice.

Techpill
Techpill

What does your program use as input? Just previous stock prices or more?

What kind of predictor is it? Is it a popular data mining/AI technique or something you created?

PackManBrainlure
PackManBrainlure

It applies to cash accounts in the sense that it sets out which activities can ONLY take place in a margin account.

Stark_Naked
Stark_Naked

Can you please give us an example of what exactly are settled and unsettled funds or the whole process in a trade. Appreciate it.

Firespawn
Firespawn

Just Google "T+3 settlement" and you'll find a lot better information than what 99% of the posters here will give you.

Evilember
Evilember

Dude, you ran a one simulation and goal 150%...
ONE SIMULATION
I bet you that if you run 10 or 100 you're going to be come out losing money.

TalkBomber
TalkBomber

Quantopian.com

There is no way you have, in your spare time, figured out something firms full of phd's have missed.

Please back test on something like Quantopian.com, and good luck.

StonedTime
StonedTime

Zero percent

He's just another role playing shitposter

He'd be able to scale it up if it was legit. His bullshit can't even make him $100

FastChef
FastChef

not OP, but I developed something similar with an advaned excel sheet

Its basically stock prices of last 2 years of 30 stocks, and it caculates the probability that the stock will go up the following day, based on old data. If its >80% (usually 2-3 of the 30 stocks) I will buy.
Started with this 6 months ago and turns out that it works. Turned 10k into 14k so far and never big losses

havent found a way to automate it, so it takes me about 15 min per day

PackManBrainlure
PackManBrainlure

so you kids figured out how to code montecarlo in excel, great. how long did it took you 30min?

Flameblow
Flameblow

If you did this in a practice account be warned that these are rigged. They give you slightly better stock values so you think you are superman and put in real money.

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