Duane
Jan 16 2000, 10:24 PM
I am displeased with my current Roth custodian and plan to move my account. I've heard that it is possible to use a Roth account for day trading. Is this true? If so, what are the necessary procedures for doing so?
John G
Jan 17 2000, 02:44 AM
Simple answer: sure you can, just find a broker that supports IRAs (virtually all), has low fees (Brown, Ameritrade, Etrade, etc) and good executions (in my experience not many excel here). You will need a datafeed for continous real time quotes such as $200+ per month for NASDAQ level II. Real time snap quotes are not adequate. Paperwork requirements when day trading an IRA are substantially less than in a taxable account because loss/gain is not tracked for Sched D.
Better answer: Somewhere between 80 to 90% of all daytraders lose money. A successful day trader spends the entire day watching markets (it becomes your entire life). Casual day traders have a tendancy to deceive themselves into thinking they are doing better than they are (with your psych background, you probably see a parallel with gambling behavior). You can not short a stock in an IRA, nor can you margin your holdings. These are two important strategies for day traders. I would NOT recommend day trading with an IRA.