Day trading,
it's been all over the news recently.
There's been a surge
in overall retail trading activity.
Individual investors accounted for almost 20%
of the trading volume in 2020.
But if I were to give it a try,
it's not like I could actually make any money, right?
Even if it looks like there might be potential day to day
to make a quick buck, the stock market
over the past year has looked something more like this.
All right!
Now, while I've started many things
without learning how to do them first,
I think this time I'm gonna do some research.
What is retail investing
and how does it differ from traditional investing?
Retail investing essentially just means
that an everyday person is investing
rather than an institutional investor,
for example, a hedge fund, a pension plan,
anyone who is a professional investor.
When did this sort of boom in retail investing begin?
Robinhood came to the market
and offered free trading, called commission-free trading.
I just bought some stock, zero commission.
So you can trade,
and you don't have to pay a fee to do so.
So what happened in 2019, was some
of the more traditional brokerages like Charles Schwab, took
on that model as well and were forced to do so,
and it really just rippled through the industry,
so all of a sudden you were trading for free.
So that was the backdrop, and that was the setup.
Fast forward into March of 2020,
you had this historic crash in the stock market.
So all of a sudden you have free trading combined
with a historic market opportunity to start investing
with all of these stocks at low prices,
and really this retail boom was born.
What happened with WallStreetBets and retail trading?
So WallStreetBets is a very now famous,
you could say, subreddit on Reddit,
and it's exactly what it sounds like, Wall Street and bets.
They're not talking about long-term investing;
they're focusing on quick trades to really make a buck.
And really what made them so famous
these days was the GameStop trade.
GameStop was a very heavily shorted stock
by some hedge funds.
And essentially what they thought was that
if everyone started piling into GameStop
at the same time, buying call options,
so betting that the price would rise,
then they could force a short squeeze by these hedge funds,
and that really is exactly what happens.
The question of whether or not
this is going to be normal these days,
if the market is forever changed,
as some market structure experts have put it to me,
if you think of the stock market now
and you think of, you say GameStop
and what happened there as gambling, gambling is free
in the stock market.
And if you believe that stocks only go up as they have
for quite a while now, then you've got pretty good odds.
Compare that to betting in a casino
or betting on a sports match;
well, you've got to pay a fee still,
you have a bookie,
so the sense right now is that technically
you've got free commissions, free trading;
it's a pretty good deal compared
to going to a casino or placing a sports bet, for example.
All right, so I've got some context
for this current moment.
I should probably talk to somebody who actually does this.
Well, not only does Trey Neal
at Squirrel Trading day trade,
he also streams all of his trades successful or not
on YouTube for everyone to see.
My name's Trey Neal.
I've been day trading for just a little over five years now,
so I graduated college in 2015.
I started right like when I started my first job.
And I've just always really had a desire to get
into a kind of job that is,
you get paid for how good you are at it,
if that makes sense?
And that's kind of what drew me
to the idea of the stock market.
And it's kind of this, the more you know
about it, and the better you execute
every single day, depends how much you make and or loose.
Here we go.
I got really, just deep dived into it,
and from there, it's just been something
I've been extremely passionate about.
What was the biggest lesson you learned when
you first started day trading?
When you first start, you think you know
everything right away.
Like in the first, like, week or two of you starting
to learn something new, you're like, "Oh, yeah, I got this.
I know everything."
'Cause you're just getting the top-level stuff.
So much of the day trading community that
you're gonna see and read about online, are those people;
they're very loud,
because, like, they think they know everything.
Maybe they found a little bit of success.
They've started to make a little bit
of money day trading, that's great.
You think you know everything,
and then it kind of starts to come down.
You're like, "I'm not really sure if I know everything,"
before it kind of starts to curl back up.
Remember you are just getting into it,
and it's a much deeper rabbit hole
than you can probably even imagine
when you first get started into it.
This land of understanding; the understanding
how to be a consistently profitable day trader.
You've done some videos on, kind of, trading gurus,
and what differentiates what you do
from what they do, I suppose?
What gurus do, and why I will start calling
somebody a guru is if they are telling people,
if they're, like, sending out alerts to people
where to buy a stock.
That is what a bad guru is to me,
'cause what they're doing is they're buying these stocks,
they're buying these penny stocks on low volume,
they're loading up shares,
and then they are telling people
that they're already charging to be on their watch list,
they're already making probably 20 bucks a month
from all these people,
and then they're going out and they're telling them,
"Hey, go buy this penny stock,"
'cause they know that an influx
of buying pressure will cause them to rise rapidly.
So these gurus, they're buying low,
they're telling all their people,
and then they're selling to their people at a higher price,
and that is the negative guru connotation,
more so than just selling the course.
I mean, go out and get your hustle,
if you wanna sell a course,
you wanna sell a course, get your hustle, make your money;
I don't really mind.
People are choosing to pay for that, right?
The whole con-man part of it is, kind of,
what I described formerly, so.
So if I'm going to really get into this,
how do I get good at it?
Well, the first step is to go ahead
and open up a brokerage,
and there's plenty of different ways you can go about it.
TD Ameritrade has one of the better ones with thinkorswim,
and we don't need to get too much into specifics,
but just go ahead and open up a brokerage.
Just about all of them will offer paper trading,
and paper trading is the ability to trade the stock market
without real money, right?
Without actually having to put any kind
of your hard earned money on the line.
And then start educating yourself,
in, I guess, whatever media
that you find the most palpable, right?
I make YouTube videos, go to Squirrel Trading, watch
my videos, I can show myself.
But there's all kinds of free content on YouTube.
There's all kinds of books.
You just Google anything you want to Google.
Investopedia is a great online website.
There's plenty of books around the mindset of a trader,
which I think is something very, very important
that you should focus on.
Try to stay away from trying to learn too many strategies.
You can kind of get yourself in analysis paralysis.
Go out there, maybe find one quick strategy.
If you YouTube search: day trading strategies for beginners,
you're gonna get an influx.
Make sure before you start trading with real money,
I mean, just make sure
you have a real, sustainable, profitable strategy
and outlook on the market.
Say, just go a month or two
in which you have made money in paper,
and then you can start to put real money in,
because it's very different
when you start to put real money in;
any trader out there will tell you that.
Paper trading is a lot easier than real-money trading
just 'cause of the emotions involved.
So just be safe when you get into it at first.
Please, please paper trade first.
And then just don't think you're gonna go into it,
it's not a get rich quick scheme.
It's something that's gonna take you a long time
to build up the processes and education on.
All right, so Trey's probably right.
I should open a paper trading account,
so I don't have to start by committing anything real.
I think I'll buy $1 million worth of Henry Co.
What a great name, it must be a really great company.
While I cannot stress enough
that we do not endorse day trading,
it has become a hobby for a lot of people.
So before you get started, do some research,
start a paper trading account,
and always be aware of what you could lose.
Now let's check in on those shares of Henry Co.
Oh. Oh, no.