Lose Money Fast! Day Trade!

                     by Craig Bicknell

                     There are lots of sure ways to lose
                     money in this treacherous world, and a
                     new report suggests that day trading on
                     the stock market may be one of the

                     No kidding, says at least one day trader
                     who promises to continue to day-trade,
                     despite the report released Monday by
                     securities regulators.

                     The most damning finding? "Seventy
                     percent of public [day] traders will not
                     only lose, but will almost certainly lose
                     everything they invest," wrote Ronald L.
                     Johnson, an independent consultant who
                     analyzed a sample of day-trading
                     accounts for the North American
                     Securities Administrators Association.

                     Only about 1 in 10 day traders actually
                     makes a profit, the report concludes.

                     Those nasty numbers are fueled by
                     misleading marketing, poor guidance, and
                     dubious loan schemes at many
                     day-trading firms, the study said.

                     Day-traders typically buy and sell shares
                     several times a day, trying to capitalize
                     on small fluctuations in stock prices.
                     Dozens of brokerages have set up
                     day-trading shops around the country,
                     wooing novice investors with the lure of
                     heady returns assured by sophisticated
                     software and computer networks that tap
                     straight into the markets.

                     "Day trading appeals to ... anyone who
                     recognizes the unlimited earnings
                     potential and quality of life which an
                     Electronic Day Trader may achieve,"
                     reads a promo tag for All-Tech
                     Investments. "Trading allows people to
                     work a 6-1/2-hour trading day, to take
                     vacations on demand and to leave for the
                     day on a whim."

                     Problem is, regulators say day trading
                     ain't investing, it's gambling.

                     "Day trading is analogous to guessing the
                     outcome of a coin toss," says the NASAA
                     study. "However, the odds with day
                     trading stocks are actually worse than
                     this, akin to guessing the results of
                     tossing a coin that sometimes lands on its

                     The damning report comes just two
                     weeks after day-trader Mark Barton went
                     on a killing spree in two Atlanta
                     day-trading offices. According to
                     published reports, Barton had lost more
                     than US$500,000 in less than a year at
                     the two firms.

                     While the doom and gloom report may be
                     bad PR for the day-trading shops, at
                     least one day trader thinks it won't do
                     much to deter new traders from jumping
                     into the fray.

                     "It's like telling someone who's going to
                     Hollywood to be an actor that only 1 in
                     20 succeed," said Joey Anuff, a San
                     Francisco day trader and author of a
                     forthcoming book on the subject. "The
                     fact that day trading is risky and most
                     people lose money is common knowledge.
                     This study simply confirms the
                     conventional wisdom."

                     Yup, said Michael Harral, a day trader in
                     Austin, Texas, who dove into full-time
                     day trading last year despite being
                     warned in advance that 95 percent of his
                     predecessors had failed.

                     "I'm a hard-headed individual, and I
                     always pictured that I wouldn't be part of
                     that 95 percent."