Comment by smileysteve 5 days ago
Stock "trading" is statistically against the odds. "A Random Walk Down Wall Street" was published nearly 50 years ago and remains generally true. No YouTuber or perfect instruction following would make you 100% likely to be profitable.
The most profitable (and effort efficient way) is to routinely invest in a broad basket of stocks over a long period. Ie Voo and Hold.
Yes generally speaking, statistically most people will not beat the index.
Does it follow then that no-one is beating the index consistently?
Of course there are people who are not a statistic. Maybe not everyone is made for it, but that doesn't mean noone is out there beating the market.
Maybe its hard if you're a hedge fund, but I'm talking about individuals with relatively small accounts.
I've seen people on tiktok that exclusively trade options. It's not something I've looked into but my take after 6 months is that you basically find an approach that works for you, whether that be trading stocks, commodities, options etc and the time-scale that you trade.
Personally I like to do primarily tech stocks and mix it up doing swing trading (holding multiple days) with a bit of scalping as well (buy / sells over minutes).
At first I lost a lot of money scalping but now I seem to have a much higher success rate - you start to notice certain patterns in the way stocks move if you watch the charts long enough, and I've been learning to have more conviction in my positions.
Yes, I might consider doing this but need to consistently feel confident doing it manually first. I did set up a docker instance to connect to my broker, so perhaps a goal for this year!
The EMH is provably false.
Moreover if you can get an edge that is even 2-3% over a coin flip all you need is risk management to make money.
Not understanding this is how you go broke. I traded for a number of years and did well. It was not hard to regularly beat the market, especially in futures and options.