I started off with mid-tier and blue chips...their daily volatility moves of 1-2% (100-200bps) are simply too small to day trade....
Kept stats and did a feasibility study...
Factor in commissions of different brokers...
Brief conclusion below if anyone's interested:
Say you get 1 killer trade of making 150bps on a blue chip (basically traded the high and low of the day)...
But you had a few scratch trades...say 3 at 0bps
And then maybe one loser...a small one since you're a master of risk...only 30bps
You're up 120bps, cheapest commission broker I found was Interactive Brokers at 5bps per side/trade, that's 10bps for round turn (open close), you got 5 trades, that's 50 bps commission.
You're up 70bps on your money. Which sounds great, that assumed you caught a monster trade which will rarely ever happen...
Realistically you might get a winner that makes 70bps leaving you only 20bps profit...you may not even get a winner and be down...
Hence, small caps, micro caps I went, volatility anything from 300bps to 10-20% (2000bps! 10bps commission now looks almost irrelevant)...and once I adjusted how to manage the higher risk, positive expectancy started developing immediately...
Obviously the problem is, many small caps don't have the liquidity or depth to support large value trades, which I will worry about if I ever start moving the markets of small caps alone...
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