What came first...investing or trading?
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What came first...investing or trading?
I day traded for the last 30 calendar days and here are my results.
This famous thought experiment of what came first, the chicken or egg, also applies to investing or trading. Investing is a skill with an understanding that you will net a return in the future (short-term and long-term). Trading is transactional and it is an activity where you give up something to get something back now.
For the last 30 calendar days, I engaged in trading. Other names used are day trading, active trading, or swing trading. I’ve day traded before, however, I never documented each and every trade I made, and the reasoning behind these trades. What follows below are a spreadsheet and a daily journal of all my trades. To make the daily journal as easy as possible to read, I bolded certain areas.
I don’t recommend day trading because it is dangerous, it is emotional, and real money is at stake. However, in documenting the last 30 days, it is my attempt to show you that both investing and trading are viable sources of income. So what came first…investing or trading? For me, it was investing as that laid the groundwork to being disciplined, unemotional, and strategic about trading.
Disclaimer: Trading stocks carries significant risks and the information here is for educational purposes only.
Highlights:
Total profit $3,872.80 (+39.08%)
Total amount of trades: 42 (33 trades for a profit, 9 trades for a loss)
Approximate total cost per trade (or position): ~$10,000
Stocks traded: Tesla (TSLA), Apple (AAPL), Costco (COST), Nvidia (NVDA), Abbvie (ABBV), Airbnb (ABNB), Salesforce.com (CRM), JP Morgan Chase (JPM)
Unknown:
A data point that was not tracked was the amount of time spent each day trading. But for informational purposes, the least amount of time spent was 30 minutes, and the most amount totaled 3 hours (total time represents each minute I was researching news or actively using my trading platform, Fidelity Active Trader Pro).
Miscellaneous:
Over the 30 calendar days, there were 23 trading days or sessions. Breaking down these trading sessions:
12 days the S&P500 (SPX) finished negative, and 11 days the SPX finished positive
10 days the Dow Jones Industrial Average Index (DJI) finished negative, 13 days DJI finished positive
12 days the NASDAQ Composite (NASDAQ) finished negative, 11 days NASDAQ finished positive
2 positions in TSLA and AAPL became short-term positions (hold for more than one day, but less than one year)
On May 20th, SPX dropped -20% year-to-date signaling a bear market. Intraday, I was down -$1,400 on two positions — NVDA and AAPL. Instead of panic selling, I held until the end of the day, and this was a good decision as the market rebounded, and I only lost -$400 (a win in my book!).
View Google Spreadsheet of all trades here.
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Trading Journal
Wednesday, May 4th
Today is Fed Day, where it is expected for the Fed Reserve to announce a 50bp hike in the federal funds rate as a way to soft land a hyper-inflated economy.
Indexes are relatively flat as the press conference for the Fed will come out at 2pm ET.
I will cautiously await the announcement before making any moves, and will be carefully watching indexes and the top 6 stocks to see if there is a good opportunity to jump in.
11:17am PT
It's a big risk to take a position right before Powell's press conference. Market can turn either way, and certainly the bigger the risk, the bigger the reward, and even still, the bigger the loss.
12:19pm PT
Hockey stick increase in the middle of Powell's speech, and now a small sell off. The indexes are really strong DJI +694 SPX +91.97 NASDAQ +307.98. Do not sell. Hold the line and there will be a rebound.
Thurs, May 5
Day after Fed Day.
9:28am
Dow Jones index surpassed -1,000 points, Nasdaq -600 points, S&P -150.
Following my active list. In a day like today, the indexes will stay down and active stocks will see the greatest recovery. But the active stock list is all at enticing prices.
Today is market reaction and not actual business fundamentals of companies. Very simple explanation without having to infer macro-economics. When comparing individual stock prices to the market, the individual prices are down 4%-8%. If the percentage is higher than this, then usually this is an indicator of bad earnings or something unique about a company.
Today may also be the 2-day hold. The 2-day hold infers that with market volatility that is purely based on stock market forces tend to recover faster, than if there was volatility in macro economics such as geopolitics, printing of money, global financial events.
End result: Market took a shit. Though only down $100. Should be able to sell tomorrow intraday trading hours when there will be a spike in purchases. Price target $894.
Mon, May 9
Week opens lower with a global selloff, and more fears of recession.
Picked up 65 shares of ABBV and targeting a 2%-3% return for the day.
Sold off SPOT. Don't see this recovering past $110 in the next 30 days. Will look to get back in if this hits $85.
PLTR reported terrible earnings and a slower growth with global headwinds. May have to offload entire position, take the loss, wait 30 days to reset wash sale, and buy back in at a lower price. But, PLTR is a new IPO stock. No history. Has big gov't contracts, which are safehavens of revenue, but investors may not have the patience to endure the losses and long path to growth.
AAPL is trading in the low $150s and this is a good price to dollar cost average. AAPL is flush with cash and a 1-year position could pay out nicely.
ABNB hits near its all-time lows. But, company has been producing positive earnings results. And the theory of remote work, IMO, still stands and makes this still a good long-term buy.
7:45am
ABBV hits target price of $152.75, and sell limit order triggers, netting a profit of $200 and 2% gain. (Cost basis = $149.69
Done for the day, given the market selloff.
Tues, May 10
4:25am
Pre-market indexes are up -- DJI +193, NASDAQ +131, SPX +26.
7:54am
Indexes have fallen to near even, and am playing $SPY. Bought 25 shares at $400, pre-market, and doesn't seem to be any momentum today given the drop in this ETF over the last couple days.
I did buy NVDA 55 shares at $172 and sold at $181 for 5% gain.
8:50am
Trading volume has normalized, what would seem for the day. After several down days (especially big ones), indexes should finish close to even, maybe slightly to the downside. Could be some bright days coming soon.
8:48pm
SPY sold at $401.50. The market was volatile today taking swings into negative territory, but as stated above, ended the day fairly even…DJI -84, SPX +9, NASDAQ +114. Tomorrow will be another swing day with CPI data coming out. There will definitely be a run, could either be to the upside or downside.
I will play it slow and sit back and be more defensive and responsive. Target ROI is 2%-3%, with two trades.
Wed, May 11
5:37am
CPI index lowers from 8.5% to 8.3%. Bought 55x NVDA at $174.97, and I think I should have waited until the market opens as this may likely take a tumble in the opening hours before recovery. Funny thing about swing trading, you really do want accelerated swings where in a matter of seconds, you buy and sell, and take your profits, and move on to the next day.
Factors or metrics I monitor:
Volume
Indices
Economic data/sentiment (daily)
Company data/sentiment (daily)
Support/Resistance
12:12pm
Eventually, I was going to have a bad day. But's it's a single TSLA trade where I will lose $500 or 5%. Overall, I'm still up from the last X trading days.
I think the initial announcement of the CPI index wasn't realized until later in the trading day, which made the market turn to the downside.
Lesson: On days of economic announcements, need to play it extra safe for the market reactions that may come throughout the entire day.
Thurs, May 12
Indexes opened down, fairly big. Then there was one market reversal which made the indexes approach even. I blinked, and the market turned green for an hour or more. Then around 11am PT, the market flipped back red. Big red!
I bought NVDA again. 60 shares @ $158, sold $162, for a 2.57% gain. I sold quick when the indexes were approaching even. When the market turned green, I could have added another $4 per share to my profit.
There has to be a short run of consecutive positive days. It's just not possible to have so many down days year to date. The end of March was terrible. The end of April was terrible. Let's presume the end of May will be terrible especially with the June FOMC meeting around the corner.
Market has been choppy, and ending to the downside. But everything is so damn cheap. There just has to be a 2-3 day run of stocks coming. When it happens, I will look to offload many of my positions. I will take the loss for tax purposes, and continue day trading to make up as much as I can.
Fri, May 13
4:37am
Indexes are up in pre-market. DJI +235, NASDAQ +198, SPX +43.
Bought 70 shares AAPL @ $144 and looking to get out at $148, for a 2% gain.
Today is looking like a day to achieve over 5% returns, and as such, I will push it today and get in and out of a handful of trades.
This may shape up to be one of those days that if you pick the right stock you may see 6% and over returns. TSLA is already up over 6%, and they will not be alone in this milestone.
Also, barring any new and negative economic or global events, this should be a good trading day.
7:22am
The indexes are holding, and staying well above the pre-market. I plan to hold my positions longer than just a spike, hoping that it will be a rising slope to hit my price targets.
1:00p
While the indexes finished -- DJI +465 NASDAQ + 434 SPX +93 -- I only profited about 2%. I played COST, TSLA, ABNB, AAPL, NVDA. Today I just missed all the buying opportunities. They came right at the beginning, and then a mid-day dip.
I still can't find TSLA's trend.
Also, I can still play extended hours as TSLA is up to $770, and I closed my position at $767.
Mon, May 16
7:00am
Indexes opened slightly negative, and 30 minutes into the trading day, they have now fallen. DJI -193 Nasdaq -122 SPX -29. No negative economic news or global events. Seems like today may be a "trader's day" as there is no fundamental issue with the market for today and as such, traders will look to pump and dump stocks.
Took a position on CRM 60 shares @ $162, and hoping to exit at $166.
8:03am
Mid-day dip is occurring, with indexes turning lower as they were at 7:00am (Around 7:20am, there was a market reversal). With this mid-day dip, the expection should not be as high for a near 5% ROI. The 5% ROI is more achievable at the beginning of the trading day.
Choppy day as usual with most index stocks trading lower. I took a position in TSLA, and admittedly, I cannot find the trend with TSLA yet, as I can with NVDA, CRM, AAPL, SPY, and COST. So I took a $80 loss with TSLA today.
Tues, May 17
TSLA was a 2-day hold. I think that may be the trend. Bought 14 shares @ $731 yesterday, sold today at $752.
Indexes were up during pre-market and at the open. They may fall, along with Active 6, as the day progresses.
WMT reported earnings and the stock is down nearly 9%.
I think I made a mistake and bought too early in the day, based off the indexes being up in pre-market. However, because there was no underlying positive economic news, the indexes being up were simply active trades. LESSON (TBD by end of day): Don't buy at the open with no positive economic news, even though indexes may be up (approx pre-market indices DJI +200, NASDAQ +200, SPX +40
Wed, May 18
8:50am - WIPEOUT WEDNESDAY
Market is down, pretty big. Currently, DJI -740, NASDAQ -361, SPX -110.
I'll stay away today, so let's go outside!
But, since the announcement of the rate hike, there were approximately 8 choppy sessions which has reset all gains. LESSON: Even though all stocks are sliding to the downside, those choppy sessions allow active traders to make up some ground. But these choppy sessions don't last long (~8 days this last cycle) until there is a market selloff, market reset.
Thurs, May 19
6:37a
Yesterday was apparently the worst day since June 2020 wiping off $1.5 trillion off the market.
Pre-market hours, indices were down big. The day after a big selloff is still a day of being tepid.
Made some long-term investments and bought TSLA, GOOG, and AMZN.
7:20a
Indices have somewhat stabilized. DJI -252, NASDAQ +34, SPX -6.
Fri, May 20
6:41a
Pre-market activity was shaping to be a pretty positive day, but opening hours have removed most of those gains. China reduced their borrowing rate, which you would think should have some huge positive effect on the market, but so far, not really.
I detect that this could be a day to ride out the morning activity, and after one hour into the trading session, stocks may start to see a nice upswing and will end the day pretty positive. I estimate DJI +350, NASDAQ +280, SPX +80.
EOD (End of Day):
The indices were down big intraday, especially after the news of WSJ announcing that the SPX has dropped 20% YTD, which indicates a bear market. The fear was strong amongst the trading community as a massive selloff began. Particularly, with NVDA, AAPL, and the rest of the active 6, these stocks dropped in price significantly.
Here are the scenarios that were playing out in my head (Game Theory):
If I sold when the market was down, I would be benefiting (in a limited way) from writing down my annual income.
If I held, then I would still hold short-term until the market recovers. I do have faith and confidence that the market is near the bottom and as such, I'm ok to hold short term. The downside in this approach is this does take away from my daily principal amount for day trading.
ACTUAL. Because I held on throughout the day with the above two conditions in mind, the market rebounded towards the end of the day, and as such, I was able to lose ~$400 between AAPL and NVDA, instead of +$1,000.
So, I didn't make money, but certainly, it was one of those trading days, where I still feel like a winner because I did not panick sell in the middle of the day!
Mon, May 23
6:42a
Indices opened to the upside, and currently sitting at DJI +300, NASDAQ +60, SPX +32.
Bought 60shares of CRM @ $157.24 and targeting as close to $162. Though, the volume is low (755K) relative to NVDA (9.4M). I also missed an opportunity to get in on NVDA as it dropped $4 to $162 right before the opening and shot up to $168.
8:17a
Indices, especially DJI +615, are holding positive. Unless negative economic news, today should be a good rebound. However, tech stocks aren't seeing the type of gains like DJI. JPM is carrying the DJI as it is up +6%.
Tues, May 24
6:55a
Indices pointing to the downside, especially NASDAQ.
Due to a conflict this morning, I haven’t been able to follow the market in real time. As such, I don’t feel like I have a good feel of the market and Active 6. As such, I will more than likely not conduct any trades today.
Indices were down pretty big all day, especially tech. Then towards the end of the trading day, DJI and SPX rebounded the most, while NASDAQ rebounded a little.
Wed, May 25
6:30a
Indices open to the downside -- DJI -120, NASDAQ -28, SPX -10. Seems like it would make for a "normal" active trading day with the first 30-45 minutes to make some money by swing trading.
Active 6 is seeing a sharp turn to the upside in the opening minutes. When it falls, it may be a long ride back up to its daily highs or close to its daily highs.
Because tech stocks were badly beaten yesterday, today could see a good bounce back (as evidence of NVDA, AAPL, and CRM).
Important metrics used in active trading:
Daily support/resistance
Market Sentiment
Volume
Matching individual stock activity to index activity
Pattern/Shape
7:55a
A relatively slow day in the market...which is good! Better stability which means better predictability. It also means that if you didn't buy at the right time, then probably won't get significant gains. So for me, probably just targeting 1% ROI per trade.
12:18
Hit all my targets today for AAPL, NVDA, and COST. Potentially after the FOMC transcript was printed for public viewing that was the reason the market turned to the upside. Currently DJI +275, NASDAQ +224, SPX +50.
Thurs, May 26
6:35a
Markets opened to the upside. DJI +300, NASDAQ +52, SPX +30.
Due to no major economic news yesterday, and with the indices pointing up, I definitely played the market more aggressively. Today seems to mirror yesterday and I will act accordingly.
LESSON: When it comes to day trading, especially when the indices are up, never chase, buy either when there is a dip/sell off or when there is tension in the price. Tension means there is a period of time where the stock price fluctuates within a given price range. For instance, TSLA for 5 minutes fluctuates between $650-$660. There still is a risk that at these moments of tension, that there could be a sell off, but if indices are up then that minimizes the chances of the price dropping exponentially.
Fri, May 27
6:34a
Friday before Memorial Weekend. A lot of activity in opening hours, but expected to die out. Indices opened to the open side -- DJI +76, NASDAQ +152, SPX +35.
NVDA and TSLA are facing early tension in their price. 6 minutes in and it is fluctating in a price range. For instance, NVDA floating between 184-185. Hard to tell where this will go, and it's better to exercise patience and caution until you see the swing.
6:40a
Indices are trending up, so I made a move on NVDA. 55 shares @ $184.
I should have taken my advice and been more patient. Price of NVDA is heading towards $181.
When an individual stock shows a trendline either upside or downside but volume is relatively slow, then when is a good time to buy or sell these shares? This is a question that I'm not sure how to answer and hence when to enter or exit the position. For instance, COST started a downward trend at 7:03a until 7:30a. At 7:30a, that seemed to be the valley and now there is a slight upturn.
12:11a
It's been a slow, BUT upward trending day. I cashed out of my positions earlier than expected as I already hit 4% ROI. However, I could have definitely held my positions in TSLA, NVDA, and CRM longer surpassed 4% and hit closer to 6%. But, when being a disciplined investor...to remove the emotions of investing...you must stick to the plan!
Tues, May 31
End of the Month 6:40a
Indices dropped big at opening bell. DJI -438, NASDAQ -123, SPX -48.
I don’t have a good feel of the market today, and I felt that way at opening. I rushed to get in, and am paying the price. NVDA and TSLA are both down. Will try to ext my positions and minimize loss.
March and April ended terribly, and that may continue for May.
9:40a
I was able to close my positions in NVDA and TSLA with a small, small gain. The indices and NVDA and TSLA have rebounded to the upside. I took in a new position with SPY. It would seem this month will look to close out in the green and so I will try to make another small gain in SPY.
Bought 20 shares at $415 and PT is $419.
Wed, Jun 1
First of the month. New month. Days before Feds raise rates another 50 basis points.
Market started up, now has fallen into negative territory. Strategy for this month will be to continue same plan in May, except make bigger investments. $15K per trade.
Active 6 remains the same, although the focus may be more on GOOG and include AMZN. GOOG’s split date is Jul 15 for shareholders on record as of Jul 1. AMZN will split on Jun 3.
9:03a
Market turned and is down big. DJI -390, NASDAQ -168, SPX -55. Could this be a start of the month sell off in preparation for the rate hike and removing gains over the last week?