Returning from an extended lunch in the 1980s, the boast from the sharpest City lads used to be "I d...
Returning from an extended lunch in the 1980s, the boast from the sharpest City lads used to be "I drunk 15 Grolsch and I'm still standing." In the early 90s, it was "I lifted 50kg 20 times and I'm still smiling." By 2000, it will be "I made £1,500 in my lunch hour and I'm still trading
Day trading has arrived in the UK with a vengeance. An estimated 5,000 punters are online every day already, many of them trading from their offices
The volume of share dealing over the internet in the UK is doubling every three months. By the first quarter of next year 15% of all share deals will have been completed online and by 2003 that will be 30%. The advantages are clear for anyone who has sat at the end of a phone line for 25 minutes while the broker muddles through a deal and then finds he didn't quite hit the price. Online trading is fast; there is direct access, with prices on the screen in front of you and it is cheap, if not free, to deal
For anyone who fancies themselves as a winner-picker, the temptation to dabble is enormous. The online brokers like Charles Schwab, Stocktrade and Xest come with a package of news and chart gizmos to play with. Among the 100 brokers in the US many also offer an online psychotherapist for the traumatised. And just in case you can't bear to be parted from your portfolio for even a few moments, new top of the range mobile phones allow dealing on the handset as well
Currently, it takes at least two weeks to set up for day trading, what with arranging nominee accounts and passwords and harnessing the appropriate computing power. There are limits you can't deal when the market is closed. Some UK brokers don't deal in foreign stocks. But once you are in, the house will even lend to spend Š at a price
It is all very exciting. as long as it doesn't end in tears. Unfortunately, not everyone on the field realises that the point is not whether you win or lose but the fun of playing the game. Mark Barton, the chemist who went on a killing spree in Atlanta after losing £105,000 on Amazon.bomb, took vengeance on his hapless community. The thing about day trading is that it looks like a game for Everyman but in reality it is only another hobby for specialists. Like an untrained civilian on a battlefield, if your own incompetence doesn't get you, the opposition will
The remarks last week by Financial Services Authority chairman Howard Davies hit just the right note for a modern regulator. He is not out to curb day trading or internet dealing and has pledged not to discriminate against it in favour of more traditional broking. But he points out that 70% of day traders in the US lose more money than they make. Ask any IFA: it comes as a big surprise to many retail investors that profit is not simply the difference between the price they buy at and what they get when they sell. There are costs involved. With funds, as with shares, transparency of charges leave a lot to be desired
And on the subject of information, a sojourn in an internet chat room for investors should be required reading for any aspiring day trader. Not for what it offers but as an indication of the complete rubbish that passes for tips or analysis. Share ramping, share dumping, scurrilous rumour, half truths and inaccuracies peppered with the un-funniest jokes you ever heard Š all of life is here. Everyone understands the warning Caveat Emptor. What's the Latin for "surfer
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