Sure, you don’t want to be invested overnight (usually? - I’m really not very learned on day trading specifics). You may sell earlier, though. Call that a backstop. It’s the cumulation of buying at the same time and selling at the same time that I find odd.
What I’m trying to say is: there are legitimate arguments against day trading but making up false examples isn’t convincing and does a disservice to the general argument against day trading.
I’m sure there are arguments for day trading too. I’ve personnally not been convinced by what I’ve seen in this thread so far (and I wouldn’t target stocks that go up 50%-100% and buy them for a day. I would want to recognise patterns and/or investors’ psychology and trade both the ups and the downs of a stock or use a statistical approach).
Ok I agree about the disservice but somehow it started a insightful exchange.
It would have been a more insightful post if I revealed how I picked the stocks.
Ross is not really a “scammy” salesman (imho) - his software are just trackers, one could build that on his own with some claude and a live market data API - furthermore, you can also just use sites like Yahoo for that.
And he reguarly does small account “challenges” where he trades himself up and posts that on social media/youtube - sometimes with more, sometimes with less success. He does provide a 3rd party audit for his trades on his website (which is where the 500$ to 1M or so comes from) and personally says his courses aren’t necesarry/he also did it without a course. Sure this is part of the sales tactic I guess, but he doesn’t really benefit from not selling you stuff in that case… YT views aren’t gonna pay his bills and he’s also not affiliated with any brokerage for example.
Out of all the trading youtubers, he puts almost all he has out for free (except the tooling) - his results clearly aren’t typical (as well established by the fact that most traders lose money), but calling him a scammer is a bit far fetched, especially considering that I’ve not only taken his words at face value, but asked other traders (people here in Switzerland) about him as well.
Unless they’re all in bed with each other, I don’t see the problem with Ross. Sure, he’s a youtuber with clickbaity titles and stuff, but as long as I don’t buy anything from him, watching a few videos of him won’t make me poor
I mean there are stocks doing 50%+ every day - you just need to capture a very small fraction of that movement to make some bank - easier said than done ofc, which is why you’d test this (like any other day trading idea/strategy) in a simulator.
Had a look out of curiosity, these microcaps hinge on news, ie you need to crystal ball it and place multiple bets to hope >50% will succeed. And then how much money do you put to make it meaningful.
Eg Cuprina - making maggots for wound clearance (a treatment modality known from antiquity, but still highly effective even if a bit gross) - getting FDA clearance sent the stock up >100%, but look at it long term, are you confident that you’ll catch the green circle? And even if you did, had you invested at launch you’d still be -75% under water.
I think this is a misunderstanding? What I am talking about is day trading, so meaning you trade the stock on an upward (or downward) trend for a few seconds/minutes. The same stocks making 50% today can do -80% the next day - a day trader generally doesn’t keep an overnight position (at least not the ones I spoke to/watched).
The whole point of day trading is to completely detach oneself from the actual fundamentals of the company and to only trade the technical side/momentum.
Absolutely, small/micro caps and trading on news is what I think most people that do momentum trading do.
This is true as well, but as said above, the goal is not to stock pick companies that outperform the market, it’s trading stocks on a news catalist with certain criteria to capture maybe 1-2’ on a 30’ upward trend and not hold the stock for more than a few minutes.
There are a few stocks doing 50%+ every day (just in the US, not to mention global markets). Then there are cracy days where a few stocks do like 200% or 500% or so. Even larger companies can see +/- 20% in a single day.
There are a few “philosophies” on how to trade in such an environment and you can have scanners to notify you, when a stock surges. You also don’t need to capture the whole 50% or so - if you can just get 5% out of it, you can make a very decent profit in just a few minutes of holding the stock. Once the momentum is exhausted, it’s time to go as a small trader, because without volatility, you can’t really make the needed profits - and agian, you’re not holding or caring about the underlying company, just about the catalist of the momentum and the technical analysis of the chart.
I think the assertion is that on any given day, there are several stocks going up 50% - 100%+. The stocks that go up on any given day are different, hence, day trading. You trade different stocks every day, trying to capture part of the big hikes while avoiding the big falls.
It’s important to get out of the long term investing mindset to understand the thesis. Company fundamentals don’t matter and the behavior of the stock on any timeframe longer than a few hours doesn’t either.
You grab your expected winner, you hold for a very short time, you sell it and try to get another expected winner.
I think retail investors are ill equipped to compete on that field but at the same time, microcap stocks don’t allow for bigger stakes and bigger profits, making them probably inattractive to the bigger fishes who would have to spend too much resources for too little nominal gains.
I can get behind the concept but:
it isn’t passive at all and requires a lot of time. One should look at it as a second job in my opinion.
If using leverage, losses can become uncapped. One big looser can erase all the gains or take you further down than that. Proper risk management, if at all possible, is paramount.
If you end up making actual profits out of it, this is typically a situation where being classified a professional investor by the tax office would make a lot of sense and you risk being taxed on your capital gains.
I meant on most days, there are stocks that do 50% a day in isolation - they might all give it away tomorrow and then you have different stocks doing 50% a day, etc. no single stock is doing 124% two days in a row, that was not what I meant.
Maybe my wording on this is bad in English, sorry.
How will you find these few stocks (which change each day) considering the world is inundated with (fake) news and by the time you identify a trend somewhere out of thousands of stocks, more sophisticated players will have already captured the value?
It would be different if you would say “I’m targeting my strategy on Swiss small-caps” - but if you’re scanning the entire world, good luck!
Trading on news means catching the stock the moment the news hit. And because they’re news it’s unpredictable. Are you envisioning trawling news for specific stocks/sectors, then identifying news that can impact said stocks/sectors, then following minute-level intraday momentum, and trading that? I don’t know, just trying to visualise how it could be done, but my immediate reaction is that the guy below has this all programmed in their platform and does it 10000X better than I could:
Yes, if you want to capture 50% of a 50% move or even 45% or so, that’s very tough - but you might “only” capture 10% or even 5% and may be happy with that. the most relevant thing from all people on day trading you’ll hear has less to do with making profit (50% chance you do lol) but with not losing every penny, because you’re 100% sure this stock will go up and you go in with 6x leverage or some bs.
Wolverine basically says it here, one bad decision and you could erase weeks or months of disciplined progress. Hence why risk management is the most important skill - at least that’s what I take out of this.
Also @Wolverine while this may be the case, we’re talking you need to make 6 figures or so a year + the moment I start to be as profitable that this would be a risk, I’d just incorporate. This is only a “risk” or rather a priviledge for the most profitable of traders.
You’d presumably be doing this in the evening thus when the US market is open.
By the time you (for example) wake up to the opportunity, large firms with massive systems and a small army of PhD’s will have already beaten you to it. Does that sound reasonable to you? If not, what’s your edge?
We’re talking about firms who invest serious money to be 200meters closer to the stock exchange building with their servers so they can capture a millisecond of faster information. How do you compete with that while sitting in your Swiss flat, eating doritos, behind your 1500 CHF Dell laptop, with your wife watching a soap opera in the background?
Yes, they will capture more of the growth - or less, in the end, they also are just market participants and there is a lot of volume from varioius sources. Trading the US market is quite easy (time wise), it opens from 15:30, that’s doble in the comfort of my home office
Such moves are fast, but not instantanious, a sequence of a couple thousand or even million smaller trades ralley the stock price, relative volume is also immense for those stocks, as people all try to do the same thing.
And even given the 500ms advantage they have, you can swimm on the wave their volume causes, you’re not trying to be more profitable than them.
I’d argue the 50%+ moves you are referring to typically happen with stocks where the free float is small and thus low volume can/will drive prices up (and down) more so than high volume. Once the news hits, you’re (almost always) going to be too late.
I disagree here, as mentioned up thread it’s too small for the big firms, they don’t play on low liquidity/microcap. You’ll be competing with other small fishes.
(And yes there is uncaptured alpha IMO, but risk management is paramount)
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