FormerCurrent Day Traders help

Former/Current Day Traders help?

I've been paper day trading amounts I would be investing in real-time for several months now and am extremely successful at it. I'm worried im not getting the full picture of restrictions and limits on day trading however I already know of the pattern day trader rule and the $7 or so fee for each trade. Say I keep $25,000 in my account and actively use $75,000 or more in trades and come out with a few thousand dollars (before taxes and the $7 for each trade) everyday is there other fees associated with that? It just seems like too much easy money can be made and with hearing that 80% of day traders lose money I feel like im missing out on something. If you make your bid/ask price the same as the stock's current price how quick is it usually to buy/sell in the most common of traded stocks like citigroup?

Other Answers:

In terms of profit loss the 80% sounds correct. Using your example with trades costing $7, and you make one round trip per business day (a buy and a sell.) That would be 250 round trips in a year or 500 trades. The commission cost for 500 trades would be $3,500. So you would at a minimum have to make 3.5k just to break even. This is where the odds start to work against you. If you did two round trips a day then your commission jumps to $7,000. which would be 28% of your initial funds used for daytrading. There is also a SEC fee with every trade but that amount is negligible.

Even with heavily traded stocks, your trade will not always execute at the posted prices.

But the real reason day traders lose money is market movement.

I looked at a three month chart for Citibank. It has gone from about 4 to about 4, with some ups and downs in between. You could have bought on the downs and sold on the ups and made money. But if the stock gets bad news while you're holding it and slides to 3 instead of jumping back up to 4, you just took a big loss that will wipe out the gains you made trading the small movements in the past few months. This is how day traders lose money.

The other way they lose money is by leveraging their bets, and a small movement against them will wipe them out.