INTERVIEW
There is not one time when I am in a trade that I don’t know exactly how much I am up or down. I don’t let a system do that for me.
Being In Tune With Your Stocks
Josh DiPietro And
The Reality Of Daytrading
For every would-be trader who’s wanted to succeed instantly, there’s someone like Josh DiPietro. DiPietro, who is the author of The Truth About Day Trading Stocks, has been daytrading stocks for 12 years. DiPietro also operates a website, www.daytraderjosh.com, and provides training programs for aspiring daytraders. His strategy is succeeding little by little, day after day — do you have the patience? To find out, Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber spoke with Josh DiPietro of DayTraderJosh.com via telephone on April 7, 2010.
Josh, how did you get interested in trading?
Back in my first semester in college, I took an accounting class and we did a small portfolio management project. It hit me then that you could actually buy a company, own a part of it — and not have to be a billionaire to do it. Then about four years after that, I opened my first online daytrading account. That was when the lightbulb went off. I realized I could sit in my shorts in sunny San Diego and buy a stock and make money on it without leaving my house. That was when everything started. I was one of the first to open up an account online and start buying and selling independently. I believe the term was independent online daytrader.
But it boiled down to when, in 1998, I figured out I had the capability to buy and sell stocks. That’s what grabbed me. That’s when I realized you could make a living this way.
You were pretty young in 1998.
I was definitely young. Basically, anyone who got online and was interested in the market pretty much had an E*Trade account back then.
What motivated you to do something like that, considering it’s risky and requires capital?
When I first started, I thought I knew everything. I was one of the idiots who would take all the money they had and just throw it out there. Why not? I made a couple of good trades. The first time I opened my account with E*Trade it was with the minimum of $1,000. It wasn’t like a lot of money. But I did make some good money off of that. I got lucky, because remember, the market was skyrocketing. You could have thrown a dart blindfolded anywhere at the Nasdaq and made money. I got caught up in that hype and then everything came crashing down on me. I got lucky. That was the recipe for becoming a daytrader, when you were an amateur back in 1998.
What are some memorable experiences you’ve had in your trading career?
I’ve got three good examples. The first would be the first trade I ever made, which was Microsoft. It was 200 shares. It went up $0.50 in just under an hour, so I made a quick $100. But after commissions I netted only $80. I couldn’t believe I actually made $100 just sitting there and in not even an hour!
One of my bad experiences and it’s the biggest experience to date was with Enron in 2001. I was one of many who when Enron hit $1.00, even though the books were saying it was worth $8, I bought. I had $80,000 and bought the stock with every egg in my basket, and lo and behold, that day it almost went down to $0.20. I held it overnight and the next day it went down to be worth less than a penny. So within one day I lost $80,000. That was my wakeup call, that I needed to learn more. I didn’t know anything about daytrading!