Bryan: Hello, everyone. Welcome to our program. I am your host, Bryan Rogers, and it's great to have you with us for Investor Education Month. We've already dedicated most of October to helping you figure out your unique situation and who you are as an investor or a trader. And you're going to level up your knowledge no matter what your current skills. So we have plenty of free education events throughout the month, so be sure to check them out at our calendar of events. You can just visit www.TD.com/am for more details.
Now, we have a fascinating conversation today coming up. That's all about day trading. If you weren't familiar with day trading, it involves the buying and selling of stocks within a single trading day in hopes of earning a quick return. It's a very active approach geared to individuals with a high risk tolerance. Day trading is definitely not for everyone, but it can be highly profitable for those who master it. So we're going to learn all about what it takes to get started with this style and some key lessons to keep in mind along the way. And joining us is Shay, founder of Humbled Trader. She has more than seven years of experience as a day trader, and she shares her approach to day trading on her very successful YouTube channel and with her community of traders. Shay, thanks for taking the time to chat with us today.
Shay: Thank you, Bryan. Hi, everyone. Thanks for joining me today.
Bryan: Yes, I'm really excited to talk to you. Shay, one thing I wanted to mention first, I love the humbled trader name. So, I've watched many of your videos and I know you've even said several times, you mean you see those videos on YouTube or somebody saying, "Yeah, you can get this Lamborghini and then you can also have these exotic vacations and it's super, super easy. Just take your 5 minutes to learn how to be a day trader." And you said it's not like that. It's not that easy. So you were humbled even in the beginning yourself. So, yeah. What made you decide to start the humbled trader community and share your experiences day trading?
Shay: Well, first of all, when I started Humble Trader, it was just to share some fun videos online. When it started, I was doing some trade reviews and kind of what I think the trading stocks are doing in the market, some market sentiment stocks. At the time, I was trading a lot of small cap stocks, so I should just share my thoughts with them, whether there were short squeezes, whether the news is just a pump and dump, or, you know, I'm just trying to share some ideas out there. So I never knew it was going to grow this big. Right now, the channel is running about 900,000 subscribers. And that's, you know, that's beyond my wildest dream. And thank you to everyone who supported me along the way. But I really just want to be out here and show you some ideas and selfishly, it was also just because, you know, I wanted like a creative outlet outside of the market because, you know, it's I'm not saying it's easy to make money in trading, but it's very difficult to keep it. So at a time when I didn't have YouTube, I have all the free time in the world. Market closes at, you know, like 1 p.m. here local time in Vancouver. So I'll trade in the morning, I'll be done around 9:00, and for the rest of the day, I'll just throw money back into the market. It was really stupid. So that's why I wanted to create YouTube, to have a creative outlet and also be a distraction for me from the market. So that was my selfish reason for starting the YouTube channel as a side project, this passion and, you know, and it grew to be like this today. And I'm very proud and very thankful to have everyone supporting me and watching me on the channel.
Bryan: Well, yeah, you've definitely built quite a following and I know I'm a fan for sure. I followed quite a few of your videos and I'm excited to ask you a number of questions. But before we get to that, I just wanted to pull up on the screen and remind our viewers today on how to navigate best navigate this platform for this webinar today. So if you just look down at the bottom, you can see there's a video player controllers, you can see you have those little icons at the bottom. You can look for a number of different resources. You have a viewer slide as well. You're going be able to see slides that we will pull up occasionally. You should see myself and Shay on the screen as well. And if you continue on through through exploring, through the console, you'll be able to see other things such as, you know, tips, how to watch other webinars. We have more webinars available. We also have questions or comments. You can ask those questions or comments. So that's where we're really going to enjoy today because we're going to Shay in the last half hour. We're going to go through some questions, conversation for about a half hour, and then hopefully the last half hour we'll be able to get to all of your questions. We'll get as many as possible. We have this hour long session and then take a look at the upcoming events. Down at the bottom, you can see there's a couple of icons that will show you any of the upcoming events or there's also a survey that we do want you to fill in. So just explore through this this platform. We're trying to pull up some of the slides just to show you the available resources and things like that. So if we have the resources, we can pull up there and we also have a few other things. We've got webinar and masterclass links. So there are other classes if you're interested in technical analysis or if you're interested in options, trading, other things, things that might be mentioned here today, we won't have time to go into detail on some of the things that Shay may mention. She might get into some technical indicators and things like that. Check out our series of webinars and masterclasses that we have available for all those different types of topics. So that being said, let's get back to our conversation Shay. I'm excited to ask these questions and really excited to hear what answers you have for our audience today. So first off, what made you want to start day trading in the first place?
Shay: At the time, I was fresh out of college. I was living in Los Angeles at a time and my job at the time wasn't that stable. I was working in the film and animation industry, so we'll have work sometimes for two or three weeks and have two weeks of break. It's all really short term contract. So I wanted to make some supplemental income on the side to pay rent and to to just be able to live because that is really expensive, right? So that was my entire initial drive to learn day trading. I thought, you know, I'm just like most people. I thought it was going to be very easy. You know, I can make really fast money, make Lamborghini money really fast. But definitely wasn't the case,
But definitely wasn't the case, sadly.
But that was the initial idea, the initial inspiration.
Bryan: Nice things. We all want that Lamborghini money.
Shay: Yes.
Bryan: That's interesting. You're in the film industry. So now maybe one of these days we can look at making a film about the day trading. I know there's lots of really successful movies that way.
Shay: Yeah, that'll be fun.
Bryan: It sounds good.
So how would you describe your day trading style and how does it work? You know, just at a high level.
Shay: Yeah. So I'm mostly a momentum trader, meaning that I trade high volume, high liquidity, high range. So, you know, whenever there's any hype stocks in the market, for example, last year in 2021, we have all the Wall street bets movement or the meme stocks, GameStop, AMC, BBY. Those are the high volume, high range stocks. I love to trade both long and short, so that's kind of like trade. So both on the small cap side and the large cap stocks. Recently this year, I've been trading more, more a lot of the tech stocks, for example, in media and just because they're so volatile up and down. So that's kind of a style I trade.
Bryan: Okay.
Well, what I want to dig into a little bit further with you on that is what are the some of the must haves when it comes to investment knowledge? So we have a lot of viewers and we have, you know, clients that attend classes and things like that. They want to know what are the skills and, you know, what kind of personality and things like that would you need to become a day trader, a really active trader such as yourself?
Shay: So, I think, to become a day trader, I just want to make it clear that day trading and investing are very different things. Investing your kind of buying you, holding for a longer term capital gain for day trading. If you use all the skills you learned in investing, you actually cannot lose a lot. So you kind of have to have to really realize that, okay, when you're day trading, you're not buying clothing for two days, two months, two years. You're literally buying the same day and selling it the same day. So you're taking advantage of the short term volatility within a single day. That's why it's called day trading.
So some some skills and some personalities you need to have. So you need to be very patient as a day trader, need to be patient, wait for your set up. Sometimes you'll be hours where you don't even take a trade. And there are going to be other days where I place a trade right at the open. It's all about patiently waiting for your strategies, envoys, set ups to show up. So that's very, very different from investing. Investing, kind of just buy it and forget about it for the next two, three, five years. So it's very different. And also you need to be very disciplined in terms of day trading. You need to have a set of rules that you need to keep in order to obviously keep your trading capital safe, means to be very detail oriented and do your research.
And I think you most of all, you need a really big appetite for risk.
So for those of you who are not just, you know, lazier or not sure, it's not easy, but you know, this kind of a set it and forget that way to invest and not let your money grow day trading wouldn't be for you because day trading in itself, it's a whole business. It's a career. It's a very, very active job. So that's a really big difference there.
But I would say day trading, you know, you have to be you have to expect that you are going to lose money the first six months to a year as you're learning to get into this profession. Right. It's kind of like going back to school. You had to pay your tuition. So you shouldn't expect to make any money in your first year. But once you get through that, once you have a second set of strategies and you learn all the rules we talked about, you learn strategies. You know how to execute your trades. Then it's time to slowly skill up and eventually make money.
Whereas in investing you kind of just buy the stock and you know, you expect longer term in the five-year horizon.
Hopefully the investment is positive, but it's a much slower growth. But in day trading, you're going to be in the red at the start definitely. But once again, the growth potential is exponential.
Bryan: Yeah, I've heard a lot there about the actual, you're saying discipline and patience and almost seems like there's a little bit of a school of hard knocks there at first too, right? You're learning as you go, is that correct?
Shay: Yeah, because, you know, any high income profession like law, being a lawyer or doctor, you have to go to law school, you have to go to med school. Everyone goes into a lot of debt, six figures in student loans debt to learn those skills. I'm not saying you need to do that with day trading, but you definitely need to pay and like lose some money to learn first. And that's what people need to kind of that's the right kind of expectation. You need to pay your market tuition to learn the skill.
Bryan: Yes, the tuition is definitely necessary.
All right. So we have and that brings me to the question on, you know, some beginners might want to quit their full time job. They're seeing these exotic vacations and Lamborghinis we talked about and dedicate themselves fully to learning how to day trade. Why would you caution against this approach?
Shay: Yeah, please don't do that. The best time to learn to day trade is when you're not worried about money. It's when you're financially stable, hopefully without quitting a job, whether it's part time or full time. When I was learning day trading, I think I was able to keep going at it, even though I was losing money for close to two years. But it's because I still had my job at the time. Even though I hated it, the pay wasn't that great, even though it wasn't stable. But I had that income to pay my bills, pay rent. So that's the reason I can keep on refunding my trading account to make sure that I really give myself the proper chance to learn and give myself the time. If you don't have any income and you just want to quit your job to day trade, I think that's a really, really big mistake. And, you know, a lot of people do that and they fail right away. And that's it. They don't have any money to trade with.
Bryan: Great words of wisdom. And just to that note, too, there's a quick note for our audience. TD Direct Investing. If you're thinking of going through, they're paying that tuition and learning and getting that education. We do have a lot of free education, plenty of webinars, masterclasses on-demand video. So, anybody that's a TD Direct Investing client, you can learn about technical analysis, fundamental analysis, understanding market developments. Check out the resources widget on the left-hand side in this console today for some of the suggestions. And you can also visit our learning center and Webbroker for all those existing TD direct investing clients. And you can browse that library and then you can make that distinction of you know, am I a day trader, do I like long-term investing? But the key is just giving yourself that foundational education for sure.
So in addition to this, Shay, I wanted to know, so what sort of financial preparation do you think is necessary to eventually make the jump into full-time day trading? So what kind of money would you need? I'm sure it's subjective, but what would you suggest? Is there any rules of thumb there?
Shay: Yeah, ideally payoff any bad debt that you have, for example, like credit card debt, car loans, that's technically bad debt mortgage is fine. I would pay off any high-interest debt. And those are I think the most important part is, you know, you save up at least six months worth of living expenses outside of your trading account at the time. For me, I saved up one whole year, but I'm just one person at a time. I was really, really young, like in my early twenties. So I just saved on my whole year of living expenses outside of the trading account. And also those savings are from my employment income. So that's another reason to not quit your job. So say the one year, six months to one year of living expenses and also like, you know, have your finances in order budget making sure that you know exactly what you need to do for the next six months to survive. Make sure you have all the all the basic needs met and then, you know, make sure you actually can finally focus on the training full time. So give yourself that time. And obviously making sure that you have at least one or two strategies that are profitable for you to start going into full time with.
Bryan: Okay. So having that emergency fund and making sure you have enough time to allocate to getting started, is there a, you know, like a starter kit? You know, if somebody were to sell a starter kit, you know, how much would you estimate it costs? Like what are some of the things you would need? And you know, what are those elements you would want to have to get started in terms of maybe like hardware and what you want to have at home. Any suggestions there?
Shay: Yeah. So I know a lot of people ask me that because they see that I have two huge monitors. You don't have that. You don't need that. But I would say at least a PC laptop, minimum PC laptop or desktop, no, you cannot trade on your phone or on your iPad. It doesn't work. You need a proper computer laptop PC not MacBook, nothing runs on MacBook in terms of trading platforms. Okay. So yeah, so one monitor minimal obviously, but I think it would be very helpful if you can no monitors, you can buy like a second-hand use monitor for like 50 bucks now on Facebook Marketplace. So buy an external monitor, it's going to help a lot because you can watch a lot more stocks at the same time. So that will be ideal, if not, that's fine. But yeah, just a laptop, one monitor external if you can, and a desktop broker platform and minimum $5,000, you know, trading account minimum.
Bryan: Right, right. So speaking on the topic of money, I want to try and maybe save some of our viewers a little bit of money. I have a son that's in university right now, and I know that tuition can be expensive.
So going back to what you were referring to on that, you have to pay your tuition, right? You have that as you're learning, and that's to be expected. You're going to have some losses. You know, how were you able to hone your trading knowledge and skills without risking a lot of money when you first started day trading? Was that is or is that actually possible?
Shay: Oh, it's absolutely possible. So this is where, you know, before in the first six months, you need to trade very, very small. So instead of risking 1000, $2,000, I was risking $10, $20. So I lose I lost $20. It sucks, but $20 is very much recoverable. And once again, like I said, we're just taking the first six months to a year as your market tuition, but you're paying that $20 per day or $10 per day to learn how to trade. So you are paying that money to watch the stocks go up, pull back, you know, watch enough what proper execution you're practicing or where's the best place to enter? The goal is never to make money in your first six months with the goal is just to learn the proper ways to set up your charts. Know what stocks relate to each other, know what to do when the stock goes against you. How do you practice, you know, stopping out? How do you practice letting your winners run? That's all you're doing the first year. You're not going to make money. We establish that. But you can pretty much control how much you lose the first year. If you're risking only $10, $20 per day, you're not going to blow up a $5,000 account.
Bryan: I never even thought of that. And controlling the amount you lose. That's. I like that angle. Yeah, sure. So what does your average workday look like for you? Walk us through that process.
Shay: So nowadays I wake up because I'm on the West Coast, so I wake up about 4:30 a.m. my local time. I kind of eat breakfast, stretch, exercise for about 30 minutes. So I have 5 a.m. my local time, which is 8:00 in the morning market time. And that's when I get to my desk, start looking through all the news, look at the charts, look at all my scanners, and pick out stocks that potentially interest me. So usually it starts with a list of ten stocks and I'll narrow it down to 4 to 5 for my watchlist. So from about 8:30 market time, which is my 5:30 to 6:00, that's the time where I actually go live with my community members and I'll go over my plans for the day, go over to all four of the watchlist stocks. I go over the why, right? We need to analyze the news. We want to look at how it's gapping up or gapping down pre-market. We need to talk about the key levels, some of the charts, and the potential setups, whether it's a long or a short. So that's all the preparation is in the first. So I said, Yeah, the one about one hour. So by 6:00, which is nice, 9 a.m. Eastern time, I'm pretty much done prepping for the day, so I have the next 30 minutes. You just kind of observe and I see what else is going on and to get ready to place my trades after market opens.
Bryan: Okay. Yeah. We always hear that all the time. You failed to plan. Then you plan to fail, right? You have a plan every day, it looks like.
Shay: Yeah, every day. It should be good because you want to make it. So most of the decision making happens before you get into the trades. Right. A lot of new traders, they get in the stock first and they worry about what to do after. You need to do the opposite, plan everything - entry, exit, risk management, stops. Do all of that before you enter the stock. You're going to be able to do so much better as a trader if you do that.
Bryan: Well, and I want to dive into that a little bit further. So on the trading plan, so you mentioned this, creating a trading plan for all of your trades. Why is this so important in your view? And what does a good trading plan look like? Are you able to give us a sample or an outline?
Shay: Yeah. So a good trading plan should be something where let's say I'm long biased on the stock. Let's say if I'm long on a daily breakout, let's say the stock is breaking through any resistance. So I think it's a long. So that's your plan, right? Your plan is if the stock breaks through that key resistance, then it's a long. So in reality, after the market opens, you can watch whether the stock actually breaks through that key level you're talking about and pull back, consolidate, hold the, that just hypothetically say $10 level and go higher. If it does do that, then that's a proper setup. Then you can actually go long on that pullback. But if the stock just pops to $10, rejects back to $9.20, then it's probably not as long anymore. Then it's probably a short. So it's important you have essentially you want to know the perfect scenario of what your trade should look like if it goes according to your plan and know what it should not look like, meaning that you need to know when you should bail on the trade or you should flip your bias or leave it alone. So that's what a plan does. Essentially, you need to know the key level, long or short. You should know what the chart should look like. You need to know what it looks like we had successively broken out and what it shouldn't look like. Meaning that if it fails then you shouldn't go long. So half of the battle in trading is knowing where not to place a trade. So that's why, you know, it's important to know that as a trader.
Bryan: Right. Right. Okay. Knowing is always half the battle for sure. Yeah, we definitely know that. Well, speaking of which, I know I've watched some of your videos before and you just made me think of the fact that I think it's something that's really important for viewers as well, especially any of those newer investors you had mentioned in there. You were saying going long a trade or going short a trade. I think we have some slides on there that have some of those definitions, but can you help us on because that's a really key element in day trading on the fact that I think a lot of people think, well, if the markets are down, I can't trade because, you know, how would I make money if the stock's going down all the time? Can you help us elaborate a little bit on that idea of short selling? So you were saying you go long a position and then maybe you can go short so you can go in different directions within a day, is that right?
Shay: Yeah, for sure. And I would say 2022 this year has been really good for short selling because obviously it's selling off. So short selling means that instead of buying a stock by a broker, you're borrowing a stock from a broker to sell it to someone else so I can borrow stock from TD and sell it to Bob. So I'm shorting a stock that I don't own. I'm selling something I don't own, and I can buy it back lower. When the stock drops from, let's say, $10 down to $5, I buy it back in a profit from the difference. So that's short selling. You're essentially betting a stock is going to go lower.
Bryan: Okay. All right. Well, if I kind of go into that a little bit further, do you have a sort of research or preparation? So, you know, if you're looking at, okay, I'm going to go long. You mentioned Nvidia earlier, a stock like Nvidia. I was going to go long in this instance or I might go short today. When you're preparing your plan, what sort of research and preparation do you do to identify potential stocks to trade and the types of trades that might make sense in that particular instance?
Shay: Yeah. So what I do is I usually pick up stocks from like a scanner. So the stocks gapping up or gapping down, but if it's something like a Nvidia, which is a stock that generally just trades with the market, then they all look at what the market sentiment is like that day. For example, this morning everything was really bullish. Nvidia was breaking out and AMV was breaking out. The entire tech, S&P 500 is breaking out. So I follow the market, right. If the market is going up higher and breaking through all the other recent resistance and Nvidia tends to do the same thing. I'll be more long biased if I'm short term, but yeah, like a day like today I'll be like jumping off on the train. So I don't want to do that. So it depends on the stock, but usually for stock which really much follows the market, that's what I would be doing. I'll be seeing what the market's doing and looking to go long on Nvidia.
Bryan: Okay, yeah, that's something I, you know, I definitely would consider the same thing. I like that that idea. So there are times you've said you like to utilize price action versus using, you know, technical analysis too much, but you do use some technical indicators. What would be some of those in terms of what are some technical indicators you most frequently used as, you know, as a beginner to help you execute your trade? So those that are in the audience, what's something that they could use to help identify those trading moves?
Shay: So, in the beginning stages, I tried out a lot of different indicators but I find working, the best for any new traders who want to try and they tried or are interested in day trading volume is one I use volume and I use what is like a volume moving average at the bottom of the charts. Yeah, that's what it looks like on the screen. So at the bottom there's a volume bars. I also use the volume average. I use the 13 day in the actual stock chart. I use up that pink line over there, volume weighted average price. So I use that to gage the trend of the stock and also how strong the stock is because it's taking the consideration, the volume on the day as well as the price. So on the average, the stock RBLX, the VWAP on the day is 42.40 according to the screenshot for that day. So as long as the stock is staying above the up and holding up the higher lows, then the stock is trending. It's really bullish the moment it breaks down and stays beneath the VWAP, that's when I'll get a little bit more short biased because the stock is unable to hold the breakout essentially. So I use I still use VWAP and volume. I don't use the other one as RSI. I don't use that one personally anymore. But it really helped me out a lot when I first started trading. But I think, you know, in the beginning it's fine to use all of these indicators, but eventually you want to focus on just the charts and the volume. If you want to be a day trader, just to look at the price action.
Bryan: Yeah, I believe the secret is to get started on these two, right? Using these and seeing what happens when you're using these different indicators and you know, as you said with RSI, you may not use that any longer, but it's something that you were that was part of your education. And you learned as you're testing that out on the on the system. Is that right?
Shay: Yeah. Yeah. At first you rely on them and then eventually you try to. Okay, what if I, you know, look at it less? And because all the indicators are a little bit lagging, right? Most of the indicators are. And same as VWAP and RSI, but it still helps.
But you don't want to rely too heavily on them.
Bryan: Right, right.
There you have it.
There's there was in 30 minutes or less to teach us everything she knows about day trading.
I don't know if you got to everything.
There's a lot more knowledge there that we didn't get today.
That's why we do have we do have questions from our viewers.
So you're all right to stay and answer as many as possible.
Are you are you ready for that?
Shay: Yeah. Let's go. Let's go.
Bryan: All right.
Let's see what we get.
Okay, so we're going to put up some poll question.
So let's see.
We've got we've got a question that say, which would you like Shay to answer?
So this is because we often sometimes get hundreds and hundreds of questions from our viewers.
We have our people in the background putting together some of the top questions.
So if you guys can vote on those, so anybody if you haven't started voting yet out of our audience, click on take a moment to read those and see what you would want to consider as the most important question you want to ask.
Shay. So as an example, if you're reading down the list, what is your average hold time for a trade? You know, for day trading? Do you look at fundamentals or focus on tactical? What are the best books on tactical analysis and day trade? And I really like that one. How long do you usually wait after opening? After opening before you take a trade? So after the opening bell, they leave what they're asking. And do you consider dividends and dividend stocks when day trading. So we'll wait a moment here for your votes.
So we've got a few coming through and then keep your questions coming through. So as I said, we may not be able to get to all of them. We have about a half hour. I'm sure it's time to to pick your brain on whatever questions you have. And, yeah, we'll get the ones that we can we think the audience is most interested in seeing. Yeah. Putting whatever you where you like and we'll see what we can, we can get to. All right.
So just as we're waiting for some of those polls to come through, I think I'm going to grab another question here as well. Let me see if I can get this. We have a question from Omar, which is what were the most important lessons or tips that your mentor taught you? That's what we need to talk about any mentors. That's a great question. So what are some of the lessons or tips that your mentor taught you that you would have never learned or realized yourself?
Shay: Yeah, I think risk management is the most important thing about the training because in the I think most people did this and I did too. In my first year, all I was focused on was finding a one perfect strategy. Well, finding a strategy that's going to work 100% of the time or 90% of the time when in fact, day trading. I think this is also what my own opinion. I think what matters more in trading it's not your strategy strategies are great. Don't get me wrong, I have a set of different strategies. I trade every day long and short. But it's not what matters the most. What matters the most is risk management, especially this year. I know too many traders who have high win rates, but this year they don't have risk management and they lose everything. So risk management meaning that you control your risk. So something we talked about earlier, which is why I think all the beginner traders just start in the first year, is to focus on the risk management, how to stop out, how to make sure when you lose money you're only losing $10, $20. And when you make money, you will. Gains are two times, three times more than the losses. That's the most important thing to start practicing early on with a small amount of money. Just do it with $10. So when you lose lose $10, we make ideally you let your trades right out to make $20, $30. So I think that's the most important thing. It's not so much about the perfect strategy, the perfect indicator. It's about managing a risk and stopping out.
Bryan: All right. So lessons learned from the mentor, for sure. All right. So we have a really simple question for you now, Shay. It's from Riazad and he's saying, how many stocks do you trade in a day?
Shay: It depends on how many stocks are breaking out or have high volume or have good range on the day. So today I traded probably four different stocks, but there are going to be days where I only trade one. Last year was really busy. There are days where I have 20 positions, so it depends on the day and what the market's like.
Bryan: Depends on if you want to keep your sanity too, right? Yes.
Shay: Yeah. The best I can only go back when I go to sleep but don't want to sleep. Just just have a lot of positions.
Bryan: Yes. You have to be able to sleep at night for sure. Yes. So if you can see on the screen on right now, we've got our poll results and it looks like we've got some winners on the question. I would say there is a tie. I mean, there's a tie for sure. So let's go to the top one. So what is your average hold time for a trade? I like that.
Shay: Average hold time. I think I would say about 20, 30 minutes. Yeah, which is only minutes. Long day traders.
Bryan: Yeah, it's not very long. Absolutely. It goes great. Speaking of which, since we that was a quick answer, which I love that we've got another tie. Let's ask that one as well. So how long do you usually wait after the opening before you take a trade?
Shay: It depends on how the trades are setting up. For example, today there are some I hold 30 minutes, but there days were at the open, there was a trade. So on average I would say I usually wait 15 minutes, but it's the same as the, you know, how many stocks you traded. The question it depends on the day. So today I waited probably 30 minutes.
Bryan: Okay. This is what a question for me. Just a follow up on that is, do you trade in the after hours? You take part in the pre-market or the after session?
Shay: Not so much afterhours pre-market sometimes this year, pre-market volume hasn't been the best. So not a lot of trades pre-market this year, I would say. Last year. Oh, my God. Last year. You know, instead of waiting for 4:30, I'll wake up at 3 a.m. So a lot of up you might get trading last year, a lot of volume, a lot of range this year. Just waking at 4:30 is when.
Bryan: Well, that's another caveat for our viewers on the West Coast. You have to get up early to be a day trader. Yeah, really early. All right. So everyone, more from the poll that I want to take a look at is for day trading. Do you look at fundamentals or do you focus on technical analysis and trends purely?
Shay: I would say for small cap stocks, unfortunately, the fundamentals doesn't matter as much. So small caps are mostly just trade, technical analysis and trends for large cap stocks. This year, the fundamentals does matter a lot. For example, right now, earnings season. So tomorrow I'm going to be looking at Google and Microsoft. I'm going to be reading into the earnings report and know the fundamentals of what they're projecting for next quarter. So that matters a lot if I'm day trading in those specific stocks. But generally speaking, my fundamentals matter less in day trading when compared to investing. Generally speaking, when you - the less time you're holding a stock, the less the fundamentals matter. But in day trading, I would say for large cap stocks at least, I still read into the fundamentals as well as the technicals.
Bryan: Okay. So to dove into that even a little bit further, I've got a question Darman I think may apply to what you were just saying. So if you buy a stock and see the potential for the stock to continue moving higher, do you hold on or do you still close the trade at the end of the day? So does day trading lead to missed opportunities or. No, he's got down here on multi bagger stocks. So I don't know if I've heard that term before, but I like it.
Shay: So like, So is he saying like there's going to be a second breakout potentially?
Bryan: Yeah. I think he's looking at is there are you missing out on opportunities if you do closed during the day? And I think he's also asking, are there instances where you may hold it longer than a day?
Shay: Oh, yeah, yeah, there are so I would say this year it's a bit tougher for swing trading. So what you need to do is yeah, if I I'll close, that's a half a position by end of the day and hold on to the half one next day you either have a huge gap up continuation breakout and so into that but this year it's been 50/50. I've been trying that all this year it's it hasn't worked all the best well by swing stocks I find the success rate of any overnight is less than 50% this year. So I'd rather just close that out because, you know, you can look at it today. The market closed out nice highs, fire highs in after hours after Google and Microsoft earnings. Everything just tanked. So this year is definitely a lot tougher to trade and just hold your swings. So for me to answer that question this year, I'm okay missing out on some potential upside to protect my downside. So this year you have to play safe this year.
Bryan: Right? Yeah, it depends on that environment. I agree. Victor is kind of one of those situations where we mentioned fundamental analysis that you do some of it occasionally. You said you may not all the time look at fundamentals.
He's saying, could you trade without knowing what the stock is? So I'm assuming he's meaning you're going to know the symbol, but knowing, you know, what do they do? What's their fundamentals? And could you just trade off of the chart?
Shay: Yeah, technically you can if the chart is very clear. So that's a lot of stock, for example, is going parabolic. Then there's a trade there. I sometimes don't I don't I usually don't kind of check what the float is, what the what sector is doing. I still really quickly look, but technically speaking, you own some start ups you only need to see the charts to trade the stocks. I wouldn't say do that all the time, but if the chart is very clear, it's clearly a dip by. Yeah. The stock.
Bryan: When you say parabolic, what do you mean there?
Shay: So parabolic is also a price action turn where the stock just goes straight up from a dollar to $2 to 10 to 20 with no pullback. It's parabolic. They can do that for like 30 minutes straight or going up, up up.
Bryan: Oh, okay. All right. How do you identify resistance levels? This is a question from Ivy, which I think ties in really well right here.
Shay: Resistance levels are basically the previous areas on the chart. I usually look at a daily chart that the stock has sold off. So how do you identify it as to zoom out of your chart, go to the daily chart, scroll back maybe two months ago to two years ago to find the previous areas where you have high volume on the selling side. On the peak, let's say a stock broke out to $30 and since then sold off to $20. Then that $30 probably going to be a resistance
Bryan: Ahh, nice! All right. So we want to go jump back to the poll questions. I think we still have some poll questions here that we may be able to get to. So out of our voting, we have these are new set. So we've got our large caps only affected by institutional traders. Now, we didn't get as quite as much vote. So down to the bottom. I have what are four places where to look for stocks to trade?
Shay: What I'm looking. On the spot. Because I don't think I mean before I'll give you three. It could be three I'm sure. Yeah. So so what I do is I have a stock scanner basically you can look at all the stocks is gapping up on the day. So by percentage, it's just sort of by percentage, and I see volume. So for example, this morning I believe what's the stock was gapping up and the GM was gapping up this morning, a shot on the scanner and so did Logitech because they both had really good earnings. So I sit on my scanner, so scanner, that's the first place. Second place is just from the news. So I have a newswire specifically for trading. So that showed all the major headlines. For example so trend stock is flying because they have FDA approval so that's the news headline. I see the stock and look at it hey I can probably trade it so scanner technically the gaffer's news fundamentally the news headlines and third is sometimes I just look at ideas from my trading community. So have a discord community, the Humbled Trader community and we have a lot of traders throwing up ideas there. So I look at it, I know that trader is really good at going long thing I see he has an idea. ABC look at the stock. Oh, maybe I was doing it for like a long on the dips. Same thing I'm sure short selling we have a lot of really good short sellers. I see them mention a penny stock ABC, I look at it. Okay, I really want to short it as well. So those are the three top places to find stocks to trade.
Bryan: All right. We got three. That's good enough for me. So we have we have the scanners. And then you had news or like a streaming news portal. Like we have those within our Thinkorswim platform, for example, in the scans as well, and Webbroker and Thinkorswim. And then lastly, you're seeing any kind of community as well. You can get some ideas from from your community personally. Right? Yes. All right. So we also have let's look at one other question in the poll here. So what is the average percentage to make in a day? If you're going to be end up working from home as a day trader
Shay: doing homework? Or does it just mean working from home?
Bryan: Yeah, I don't think they mean doing any homework like schoolwork or anything like that. I believe they're saying, yeah, to get yourself home as a day traders. What my interpretation was, what kind of percentage would you need to be able to I guess go to that earlier question to be able to quit your job and and make it as a day trader?
Shay: So percentage is tough to say because I can say it's good to risk only 1% per day. So 1% of your entire account, that's your risk for the day. How about how much money you can make? Depends on what the market gives you, right? Some days you risk 1%, you can make 2% or 3%. Some days it sucks. You risk 1% and you really do lose 1%. So there it depends on what the market gives you and percentage is different, right? I can be trading a six figure accounts. 1% is $1,000 loss. That's fine for me, but somebody else can be trading a $10,000 account and the 1% is $100. So it really depends on what kind of capital you're working. But I would say if you want to add this for me, why I started making a full time income. I was trading with a $20,000 account, $20,000 U.S. But again, you don't start having a $20,000 account. You start with $5000. Slowly build it up. You may lose some, but eventually you want to work towards having that $20,000 or $30,000 account to trade with.
Bryan: Right. Right. So what it comes down to income. I know we were asking that question in terms of percentage, but did you have a time when you were as a day trader that you looked at, okay, I need to get this amount of money maybe just to replace your your daily income or your weekly income. Did you have any scenarios like that at one point?
Shay: Yeah. I was making around two times my income from work, but I wasn't making that much money from work. So this. Yeah. So when I was starting to make two times amount of what usually make at work, then that's the time to start prepping for me at the time I was in that allows consistency doing this now it's the time to start saving up that one year of living expense. And once I saved up then I'm still doing well as a trader part time. Then I was ready to quit to become full time trading.
Bryan: Okay, so all those transactions so Jenny has a question that relates pretty well to this is is it with one stock do you focus on or do you trade multiple stocks? Like how many would you typically venture towards in a day?
Shay: So for example, today I traded four or five stocks. So there are some stocks of scale into one, some stock closed, one entry, one entry out. Yeah, but the days were so low that I would just trade one ticker and and one entry in one entry go and that's it.
Bryan: Do you follow your... This is another question, Victor, that I just noticed. Do you look at your profit and loss while trading or do you just make sure you execute well?
Shay: So I think it's a good idea to hide your p&l window at the beginning. I think it's a good idea. That's a really good idea. And I did that too. But after a while it just makes more sense for me to know exactly, because you have to understand. Like, if well, if you're trading a larger account size, at some point you need to care about how much and we always do it. So nowadays I do look, but I do love just to know that I need to take care of my risk, how much money I'm about to lose or make. I need to take care of that. So I do keep it there. But not to. But right now I keep it there because it's not going to I'm not going to make any irrational decisions just from seeing, let's say, $1,000 unrealized. And all of that is for me to start realizing, okay, I need to have to scale out what add into my position. So nowadays I do keep my p&l up, but in the beginning I would avoid it because they used to make me really emotional. Now it's not about the emotional side. It's about what I need to do to to reduce the risk, to scale up or size down.
Bryan: Right. Right. I know I would never ask this question to my wife, but Michael's asking me to ask you this question. How often are you wrong?
Shay: Every day. You're not, it's impossible for anyone to be right 100% of the time. All the time. So that's why I said it's about, it's okay to be wrong. But when you're wrong, I want to lose very little so I can be wrong. I lose only $100. But when I'm right, I want to make 300, $500, so it's fine. Like today I was wrong on other stocks and that's why I took it for a loss. I was able to make make the trades work for the ones that I'm right and capitalize on that. So in trading, it's not about never lose money. It's about making sure you only lose a small amount when you lose, let's say $10, like we said earlier. But when you are when you're agreeing, when you're right, you make $30, $40. That's what trading is about. It's not about being right all the time, because my win rate is only 60%, 60% win rate. That means on the 60% all the time I make money. The gains are two times, three times more than 40% of the time where I'm wrong.
Bryan: Yeah. And making those mistakes is part of that tuition we talked about earlier. Right. You definitely learn from your mistakes.
Shay: Yeah. You have to.
Bryan: Anybody out there like sports analogies, if you're a baseball fan, you know, like a Hall of Famer is somebody that can hit the ball, hit a homerun three out of ten times, right? So if you're only right a few times, that definitely helps.
All right. So we have another set of poll polls coming up here. So some results that we're showing on the screen now. So let's take a look at the most popular one there. So what is your stop loss strategy? So if you can explain to the group too what that is, what is your stop loss strategy manual or trailing?
Shay: Yeah. So usually I do manual only specific. So that's why I let them trail. So most of the trend winning setups long or short, I'll let them trail. But if it's a longer momentum strategies, I like to be there to either stop out or to take profit. So it depends on the set up. I would say most of the time it's manual unless I'm letting a have to step away either have a market stop to stop out of my positions.
Bryan: Okay. So you're using a stop market. So either you're either there doing the trade yourself or you're going to just close it out like I've seen you do that on some of your videos. Close it it manually is what you're saying. Or you might use just like a stop market order if you didn't have that time to be sitting there manually and you were worried about a drop, is that correct?
Shay: Mm hmm. Yeah.
Bryan: Okay. All right. So what's your opinion on options trading? Oh, I think it's fine. It's not. I know it's not for me, but I think my opinion of options is I think you need to all the best options. Traders I know came from stock trading, so at least they know how to read the stock charts. They at least they know how to you know how to steer when a chart is bullish. That's that's the best options traders I know the options trade I know where they don't even learn about charts. They just jump straight into options. And unfortunately, last year became really popular with the Wall Street bets "YOLO", YOLO (You only live once) calls they call it unfortunately. You know, last year it probably worked really well, but most of those people this year, they blew up. I think options it's I think it's fun like if you knowledge trader traded but I would say it's riskier than trading stock.
Bryan: Yeah it takes a lot of knowledge on the options and you should learn I think you're right learn that foundation of stock trading, then move on to options. But yeah, that's that was a great question on should I get a coach or find a system online? That's the next kind of most popular one on the pole. Or should I just try random set ups to start?
Shay: So I think, I think it's okay to just try it out in the beginning. But I think what you're going to find is that nowadays it's not the lack of information online. You go along any YouTube video, you can find someone else's strategy or you can find, like you say, a random set up to start. But what matters; But why trading is so hard nowadays is because you don't have a structure. It's hard to find a structure. To go step by step from a strategy can be teaching you. Let's say I teach you a parabolic short. How are you going to know what a parabolic short is if you don't know how to read charts so no one out there is going to give you the system step, step unless you're in an actual program. So I would say, you know, trial the random stock stuff online. I have a lot of free YouTube videos for you to start, but I have a playlist in order, I think people should start. You can start with that if that's what you like. But I would say, you know, in the beginning stages, a lot of people, they get lost because it's there's just too much information. You don't know how to go from point A, B, C, instead, you can be starting from ETF Z. So that's why it's hard in training. It's there's too much information out there. And, you know, I'm not saying my videos are going to be the answer, but I would like to think that, okay, I think I have a lot of beginner friendly videos in a structured way.
Bryan: So that would be under is it humbled trader if you just looked on YouTube, typed in Humbled Trader Is that where you would find that list?
Shay: Yeah. So if you go to my my YouTube channel and go to playlist this day, Trading for Beginners playlist and then it should be in the order that I think people should watch.
Bryan: All right. So going back to Reddit and Wall Street bets, I'm kind of glad you mentioned that because this fits in with a question from Sheila saying, have you ever shorted a stock that went the opposite direction? So a lot of people that if you don't know, there's that Wall Street bet situation with GME, GameStop where, you know, it went the opposite direction. It went way up when a lot of the market was trying to short that stock. Is that ever happened to you? Have you ever had that situation before?
Shay: Yeah. A short squeeze. Yes, it has happened.
Bryan: All right. Can you elaborate on that? Just so those that may not know what is what is the short squeeze, what happens in that situation?
Shay: So a short squeeze is so for example, short selling, I'm shorting a stock at 100 that's thinking it's going down to 90. So if that's the case, then the stock does go down to 90. Their profit, the $10 difference. Right. So if I'm short $1,000, I make 10,000. If I'm short $1,000, I make $10,000. So I had to do a math. Yeah. So but was a stock instead of going down from 100 to 90, it goes to 200. Let's say it does that and that's a for some reason I don't have risk management. I don't stop out, then I lose $100,000 on that short. So that's why short selling is risky because technically your risk is infinite, right? When you buy a stock at 100, the lowest it can go is zero. The worst you can lose is $100 on one share of a stock, but average stock short squeezes and go to a 100 to 500 to a thousand. My risk is technically infinite, so that's why it's risky. That's why if you want to short sell a stock, you need to be really good at managing your risk and stuff out of your trades.
Bryan: Yeah, that risk management comes up a lot. It is definitely a really important thing. That brings me to our last question. I think we're going to be able to squeeze in here within the time you've been so great. Shay, I really appreciate all this. What is your top advice for a beginner? And this is a question for Muhammad.
Shay: My top advice. Okay, not advice. My opinion for beginners. My main opinion for you is if you if you're really serious about this, I mean, first of all, I think everyone I'd say everyone here is interested in trading. I will try out all the free resources you can. So sign up for a free paper trading account. I know TD offers it and other brokers offer it. Sign up for a free paper trading account. Watch the free videos on my YouTube channel. You're not going to lose any money that way. Watch a free YouTube videos, try it out on simulated trading. That's paper trading. So you are trading fake money essentially and see if it's really for you. Try it out first and divide up process. I guarantee you 90% of the people here will be thinking all this. Too much work. Not for me. And that's fine. You're not losing any money. You're just losing time and that's fine. So I won't do that first. Like making sure this is actually something you want to do before you commit to paying any money market tuition or signing up for brokers or anything else. So let's a first step and then once you have those paper trading account, then you'll try out some strategies online. Pick one or two strategies you either find online or you can consider joining a community like my community, for example, if that's what you're interested, because then you can trade among other professionals and you can learn how to create your trading plan and to eventually make your own decisions. That's why I would recommend I would be very careful about people who livestream online, I do livestream for that reason, whether it's a free online stream or paid streams, I'll be very cautious upon those. I got sucked into those in the beginning. I lost a lot of money, essentially buying and following alerts. I'll be very wary of that. But they trading is trial by fire. You're going to learn what works for you and and what not to do, hopefully.
Bryan: All right, there you have it. So you can you can try a paper money account. So paper trading those if you don't know what it is, is that where you can do some fake investing? So you're using the actual real market, but you're just doing it on a paper basis, right? You're just doing practice trades. We do have that available with Thinkorswim Canada. So if you type in Thinkorswim Canada and Google, you'll get the link right away. It should come up on the top and you can download the Thinkorswim paper trading platform as well to do what you just mentioned there. So I definitely encourage you to take a look at that. Yeah, there we have the link for that platform available for you. And then as she was mentioning, you'll check out those videos, check out she's Humbled Trader videos. Do your research, check out the Learn Center in Webbroker. And there's some a lot of great technical analysis webinars that you can watch that we have available and all kinds of masterclass, live content and other webinars like this that we just did today. So thank you so much today. Just a reminder to everyone as well that there is a survey that we have. I don't know if we have a link that we can pull up here. We do have a survey link. There it is. You can see down at the bottom quick that icon for the survey link in the middle, it looks I believe it looks like just a little clip board. We want to get your opinion what we did. Well, today. I hope you really enjoyed Shay's answering of all these great questions. And we really appreciate your time. Shay, thank you so much. Hopefully have a good trades over the next the remainder of the week. And anything in closing from you? Shay: No, thank you, everyone, for joining. If I missed your questions, you can make a comment in my YouTube comments section in my videos and I'll try to do my best to answer your questions. Bryan: Excellent. Well, thanks so much, Shay. It's been a pleasure. I'll definitely be checking out some of those those YouTube videos and I'll put some questions in there for you, too. Shay: Okay. Bryan: All right. Thanks so much, everybody. Have a great day. We'll see you next time. Take care!
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