How much time would I have to spend trading to turn a profit?
Don't go for the 'fast buck'. There's no such thing. There are two types of people that make money on the stock market: Investors and Speculators. Investors are people that pick a stock that's relatively low, relatively secure, and buy the stock for the long run, 5, 10 years or more. Warren Buffet said his ideal period for investing is forever. Basically, a well run company should always be a good investment. Speculators go for the fluctuations in stock prices. Day traders, Options, etc. It's risky business and you'll be able to lose a lot of money in a short term. There's always a risk when you invest your money, so go with MrChrister's advise to start with a simulator. Have fun. Sounds like you are a candidate for stock trading simulators.  Or just pick stocks and use Yahoo! or Google finance tools to track and see how you do. I wouldn't suggest you put real money into it.  You need to learn about research and timing and a bunch of other topics you can learn about here. I personally just stick to life cycle funds that are managed products that offer me a cruise control setting for investing. Probably several years at least.  Maybe more like ten years. You need to watch a market for a substantial period of time to make money consistently. If you hit it big before then, you beat the odds that were against you. "What determines your profitability is not your time, but your TRADES. It is probably a mistake to go into the market and say, I hope to make X% today/this month/this year. As a practical matter, you can make a lot of money in a short period of time, or lose a lot over a long period of time (the latter is more likely). You're better off looking at potential trades and saying ""I like this trade"" (be sure to know why) and ""I dislike that trade."" If you're right about your chosen trade, you'll make money. Probably not on your original timetable, because markets react more slowly than individual people do. Then make ONLY those trades that you genuinely like and understand. IF you get into a ""rhythm,"" (rather few people do), your experience might tell you that you are likely to make, say, X% per month or year. But that's ONLY if the market continues to accommodate YOUR style of trading. If the markets change, YOU must change (or get lost in the shuffle). Trading is a risky, if sometimes rewarding business. The operative motto here is: ""You pay your money and you take your chances,"" NOT ""You put in your time and eventually rewards will come.""" Very subjective question. some may do it in the first year, some lose money all their life. Some make a fortune and then lose it. Investing time is only a small part of it. some people can never do it just because investing is not for everyone. Just like any other business. or you can invest into t-bill and CDs, you'll be profitable from day one. "The high frequency trading you reference has no adverse impact on individual investors - at least not in the ""going to take advantage of you"" way that many articles imply. If anything, high-frequency trading is generally more helpful than harmful, adding liquidity to the system, although it can cause some volatility and ""noise"" in volume and other data, and the sudden entrance or exit of this type of trading can drive some abnormal market movements. As to research and time needed for trading, most data suggests that the less you try to ""beat the market"", the better you'll do.   Trade activity tends to be inversely related to returns, particularly for individuals.   Your best bet is likely to learn enough about investment risks to ensure you're comfortable with them, and invest in broadly diversified asset classes, regions, and sectors, and then mostly leave them alone, or rebalance annually.   You'll almost surely do a lot better that way than you will if you spend countless hours researching the ""right"" stocks to buy." Making a profit in trading is not a function of time, it's a function of information, speed, and consistency. Regardless of how much time you spend learning about trading, there is no guarantee that you will ever become profitable because you will always be competing against a counter-party who is either better- or more poorly-informed than you are.  Since trading is a zero-sum game, someone is always a winner and someone else is always a loser. So you need to be either better informed than your counter-party, or you need to be as well informed as them but beat them to the punch. You also need to be able to be consistent, or else eventually you will get wiped out when the unexpected happens or you make a mistake. This is why resources such as full-time professional analysts, high-speed trading terminals/platforms, and sophisticated algorithms can provide significant advantages. Personally, I think that people with talent and those kinds of resources would take all my lunch money, so I don't trade and stick to passive investing. One funny story, I once knew a trader who was in the money on a particular trade and went out to have a drink to celebrate. The next day, she remembered that she had forgotten to exercise the options. Luckily, they had expired while in the money, and by rule had been exercised automatically as a result. It depends on how you define trading.  If you're looking at day-trading, where you're probably going to be in a highly-leveraged position for minutes or hours, the automated traders are probably going to kill you.  But, if you have a handful (less than a dozen) equities, and spend about an hour or so every week conducting research, you have a good chance of doing pretty well. You need to understand the market, listen to the earnings calls, and understand the factors that contribute to the bottom line of your investments.  You should not be trading for the sake of trading, you're trading to try to achieve the best returns. Beware of dogmatists and people selling products that align with their dogma. Warren Buffet invests in companies for an extremely long investment window. Mr. Buffet also expends significant resources to gain a deep understanding of the fundamentals of the businesses that he invests in and the factors affecting those fundamentals. Buffet does not buy an S&P 500 index fund and whistle dixie. I suppose it depends on your goals and expectations, but I'd argue its not easy. Regardless of the chosen sub discipline of trading or investing you pursue there will be some theoretical and research work to do, some learning of the mechanics of the market, and some 'ropes' to learn upfront. After that the time frame you are working in, the complexity and time requirements of your methodology dictate how much time you need. I personally spend enough time on it to be considered equivalent to a part time job, but I enjoy continually learning and researching. If I weren't constantly trying to improve and research I would say the mechanics might take a half hour a day. However, I would gladly do it full time if I were able. I believe that is important, if you simply want to make lots of money but hate the process you will likely fail. As mentioned earlier if you are new to this the majority of your time will be spent initially learning whats out there, trying various things out, and finding what works for you. There are a lot of different ways to approach the market and a number of markets to approach. For me it took two years to find my niche and become profitable. Learn to loose small and keep your itchy fingers in check during that learning curve. Yeah, too subjective of a question I shorted BP last year during the deep water crisis, using a leveraged account 20 times larger than the amount of cash I actually had, instantly profitable. I was long Freddie Mac in March 2009 and that took several months to turn to move and turned a 100% gain I've flipped penny stocks trading at .0001 cents, bought a few million shares and sold them at .0002 cents. Sometimes instantly, sometimes over several months because they were illiquid I'm primarily a derivatives trader right now, which I did not know about or understand less than a year ago. Dont have crazy targets, that how you will blow up your account. Have meticulously calculated plans. Also you need to determine what kind of trader you are.
Agreed, most artist would *love* to get paid for their hobby. but that doesn't entitle them to profit. here's how I think of it - when the car was mass produced, railroads probably saw a huge drop in profits. the marketplace changed, and where once it was possible to turn a huge profit, now it was only possible to turn a portion of that profit. What if, in attempts to regain their profits, railroads pushed for regulations of the road so that only certain sized vehicles could drive on it? (Loose analogy, i know) The point is that the marketplace changes and NO ONE is *entitled* to profits for their work. Entertainment supply has skyrocketed with the internet and therefore it's value has diminished. But even still, hollywood and record labels make huge profits, look at how overpaid actors are. the industry can't expect to keep raking in these insanely inflated profits.  Other industries have to deal with similar problems, e.g. shoplifting. They chalk it up as a cost of doing business, and come up with creative ways to deter it. They could easily do this successfully with piracy (steam being the role model).  All in all, yeah, i think a sharing economy is a very healthy alternative. And maybe in the future films and such will be funded through crowdfunding methods such as kickstarter. But in the meantime we cannot allow these industries to influence legislation and introduce dangerous laws that infringe on the freedom of our internet. they seem to think that they have the RIGHT to maintain their already huge profits, and we need to put them back in their place. "They already do, it is just sneaky how it is done.  They have created a system with healthcare where we pay up to three times more per capita than any other western country.  They do this by setting up particular legislation and shutting down public options (and anything else that might cut out administration and executive profits).  They don't need to directly tax us in order to keep an unreasonable amount of money flowing to corporate executives and wealthy share holders.  That is without even getting into pharmaceutics and prohibition legislation.  One way they could easily keep money flowing to Hollywood, would be an additional tax refund that applies to ""legitimate"" entertainment costs.  Or perhaps doing as Canada does and adding taxes to storage media.  They can also continue to cut web freedom, options and bandwidth.  Every bit of legislation I see come down the pipe (with only a couple of notable exceptions, such as dadt) has been about protecting profits for the top of the economic pile, at the expense of everyone else.  EDIT:  I would also like to mention that our taxes already fund healthcare, and in fact, we pay so much that we could have a universal system already just with the money we spend via taxes.  It is so hyper-inflated because of the vast amount of profit built into the system at all levels.  http://www.kff.org/insurance/snapshot/OECD042111.cfm http://www.cbpp.org/cms/index.cfm?fa=view&amp;id=1258  We have to cut out admin and profits to the hyper-wealthy if we wish to have a reasonable healthcare system.  This chart in particular shows the problem.  http://www.kff.org/insurance/snapshot/images/OECDChart3_1.gif  This was just in 2008, costs have increased since then at the accelerated rate.  So yes, the oligarchy has ways of making us pay without introducing specific new taxation." The company's value (which should be reflected in the share price) is not how much money it has in the bank, but something along the lines of 'how much money will it make between now and the end of times' (adjusted for time value of money and risk). So when you purchase a share of a company that has, say, little money in the bank, but expects to make 1M$ profit this year, 2M$ for the following 3 years, and say, nothing after, you are going to pay your fraction of 7M$ (minus some discount because of the risk involved). If now they announce that their profits were only 750k$, then people may think that the 2M$ are more likely to be 1.5M$, so the company's value would go to ~ 5M$. And with that, the market may perceive the company as more risky, because its profits deviated from what was expected, which in turn may reduce the company's value even further. In short, thanks to the answers and comments posted so far.  No actual money is magically disappeared when the stock price goes down but the value is lost. The value changes of a stock is similar to the value changes of a house. The following is the long answer I came up with based on the previous answers and comments alone with my own understandings. Any experts who find any of the following is 200% out of place and wrong, feel free to edit it or make comments. Everything below only applies if the following are true: The stock price is only decreasing since the IPO because the company has been spending the money but not making profits after the IPO. The devaluation of the stock is not the result of any bad news related to the company but a direct translation of the money the company has lost by spending on whatever the company is doing. The actual money don’t just disappear into the thin air when the stock price goes down. All the money involved in trading this stock has already distributed to the sellers of this stock before the price went down.  There is no actual money that is literally disappeared, it was shifted from one hand to another, but again this already happened before the price went down.   For example, I bought some stocks for $100, then the price went down to $80. The $100 has already shifted from my hand to the seller before the price went down. I got the stock with less value, but the actual money $100 did not just go down to $80, it’s in the hand of the seller who sold the stock to me.  Now if I sell the stock to the same seller who sold the stock to me, then I lost $20, where did the $20 go? it went to the seller who sold the stock to me and then bought it back at a lower price. The seller ended up with the same amount of the stocks and the $20 from me. Did the seller made $20? Yes, but did the seller’s total assets increased? No, it’s still $100, $80 from the stocks, and $20 in cash. Did anyone made an extra $20? No. Although I did lost $20, but the total cash involved is still there, I have the $80 , the seller who sold the stock to me and then bought it back has the $20. The total cash value is still $100. Directly, I did lost $20 to the guy who sold me the stock when the stock has higher value and then bought it back at a lower price. But that guy did not increased his total assets by $20. The value of the stock is decreased, the total money $100 did not disappear, it ended up from one person holding it to 2 people holding it. I lost $20 and nobody gained $20, how is that possible? Assume the company of the stock never made any profit since it’s IPO, the company just keeps spending the money, to really track down where the $20 I lost is going, it is the company has indirectly spent that money. So who got that $20 I lost? It could be the company spent $20 for a birthday cake, the $20 went to the cake maker. The company never did anything to make that $20 back, so that $20 is lost. Again, assume the stock price only goes down after  its IPO, then buying this stock is similar to the buying a sport car example from JoeTaxpayer (in one of the answers), and buying an apple example from BrenBarn(in one of the comments from JoeTaxpayer’s answer).  Go back to the question, does the money disappears into the thin air when the value of the stock goes down? No, the money did not disappear, it switched hands. It went from the buyer of the stock to the company, and the company has spent that money. Then what happens when the stock price goes down because bad news about the company? I believe the actual money still did not just disappear. If the bad news turn out to be true that the company had indeed lost this much money, the money did not disappear, it’s been spent/lost by the company. If the bad news turn out to be false, the stock price will eventually go up again, the money is still in the hand of the company. As a summary, the money itself did not disappear no matter what happens, it just went from one wallet to another wallet in many different ways through the things people created that has a value. If you plan to take profit at $1.00 then your profit will be $40. Then, if you set your stop at $0.88 then your loss if you get stopped will be $20.  So your Reward : Risk = 2:1.  Note, that this does not take into account brokerage in and out and any slippage from the price gapping past your stop loss. Don't sell. Ever.  Well almost. A number of studies have shown that buying equal amounts of shares randomly will beat the market long term, and certainly won't do badly.  Starting from this premise then perhaps you can add a tiny bit extra with your skill... maybe, but who knows, you might suck.  Point is when buying you have the wind behind you - a monkey would make money. Selling is a different matter. You have the cost of trading out and back in to something else, only to have changed from one monkey portfolio to the other. If you have skill that covers this cost then yes you should do this - but how confident are you? A few studies have been done on anonymised retail broker accounts and they show the same story.  Retail investors on average lose money on their switches. Even if you believe you have a real edge on the market,  you're strategy still should not just say sell when it drops out of your criteria.  Your criteria are positive indicators. Lack of positive is not a negative indicator.  Sell when you would happily go short the stock.   That is you are really confident it is going down. Otherwise leave it. I made upwards of 3M from 200K by trading stocks, which I made from a business that I invested 20K in.  HOWEVER, DO NOT use trading stocks as a source of income, you're gambling with your precious cash. There are safer alternatives. "I would change that statement to ""very few people can CONSISTENTLY beat the market "". Successful strategies will get piled into and reduce returns. Markets will pick up inefficiencies, but at the same time they do exists. Tons of interesting reading especially in regards to value. Is there a risk premium that we don't know for value? Or is it a market behavior thing?"