I tried daytrading
checkout the article: here
I’ve been investing in the stock market with a minor account since I was 14. Every cent from running a lemonade stand, umpiring baseball games, and teaching at summer camps has been invested into an index following the 7-year rule.
Shortly after the COVID-19 pandemic started, I made a trade in Netflix that made me around $300, which got me really excited. I felt like Dave Portnoy. With summer coming up, I started googling about life as a daily stock trader. That’s when I fell into the trap. Lamborghini’s, nice cars, models, screenshots of amazing profits, and advertisements on courses flooded my feed on Instagram, Facebook, and youtube. I had probably watched a 100 hours worth of videos on day trading in just a couple weeks. I was hooked.
So, just like the other thousands of people, I opened an account with TD Ameritrade and put about $1500 into it.
Online brokers see spike in new accounts during coronavirus
On May 25, 2020, I rolled out of bed at 6:00 a.m. PST and plopped myself into my chair, getting ready for an exciting day of making money! On the first day, I made $17. Not too bad right? About a 1.13% growth on the day. So I thought to myself, “I was pretty conservative, and I haven’t lost any money, so I should just be more aggressive.” That was the only day of the week I made money.
I ended my account today with the value of $1538. Over three weeks in the market, I made $38. But at what cost? In actual trading hours, I spent about 30 hours. In research, probably around 100 hours. This means that if I had decided to instead work at McDonald's, I could have made $330, nearly 10x of what I earned day trading.
One of the trades I made was on Hertz. A lot of you probably just vomited internally, considering that Hertz has filed for bankruptcy, but surprisingly, it was one of the trades I made money on. I saw a bunch of people in a discord chat server talking about buying Hertz stock, so I followed suit and made $60 on just that trade. This is a pure example of how day traders have taken over the stock market. A bankrupt company, that is literally worthless, is being bought out by pattern traders who see signs from their indicators that the stock is oversold.
Day trading is not the same as stock market investing. Day traders use patterns, indicators, and other analytical methods to determine whether the price will go up or down based on trends. Investors use financial and other data to determine if the value of a company will go up. So honestly, daytraders are just guessing most of the time. And it’s a psychological shit-show. You could be making a ton of money one second, and lose it all the next.
So, would I recommend day trading to anyone reading this? Simple answer: no. While you can surely make money doing it, even the successful daytraders like Ricky Gutierrez have other ventures that they focus on, because daily trading the stock market has no income security. You are far better off spending your time working a job and investing that money into an index that will let you double your money every 7 years. Personally, my passion is engineering. Analyzing financial markets is my hobby. If you are young and considering spending your time on a get rich quick scheme like dropshipping or day trading, I strongly advise you to re-evaluate how you want to spend your time.