I know it has been a while since I have written a post but rest assured, I am back with content which I think will be worth the read! This article is not a jab at day trading but more of a different point of view for those that have been struggling with day trading, or those that cannot be available for the market during the best day trading hours.
Day trading has become so mainstream that many turn to it in a short time period after being interested in the market. That is great, but I can tell you from experience there are other ways to invest your money, and in most cases better ways to build your capital. Day Trading, though appears easy, it is not actually an easy route to success. In fact, most people fail miserably and some that tout success actually hide their terrible trades and display only their successful ones. That is not to say that it is not possible, but there are better ways to approach the stock market without trying to sell people a get rich quick mentality.
The image below is a prime example of what I will be discussing in this article. The stock in the image is of Equifax, the credit reporting agency. A few years ago this company had some terrible news regarding a data breach. Millions of people’s information had been compromised and was quickly blasted all over the news and social media. The stock price responded to this news by crashing and ended up loosing almost 50% of its value in just a matter of a few months. Now, if we were to think about this, would we be led to believe that Equifax would close its doors after this incident. Probably not!!! (it didn’t) Is there a good chance that the stock price will recover? There is a good chance right?? (it did). At this point you should see where I am going with this.
Looking at this chart, we can see the data breach taking this stock price from about $145 per share all the way down to about $88 per share. Granted this is a longer term trade, and maybe even outside of the scope of a swing trade but the gain for the account is still worth noting.
There is also other markets that are not fairing well in part due to the Corona-virus outbreak. Keep in mind I am not a financial advisor but am sharing opinions based on the market, but, you are the one who has to do additional research in order to make independent investment decisions.
Now, the most simple or traditional form of investing/trading, is to wait for tragedy! Just like Equifax (EFX) during that data breach. We wait for moments like these where there is opportunity on a company that will not shutter it’s doors during a terrible event. Let’s look at current examples that may have similar opportunity.
Carnival Corp the cruise line company has not been fairing well with this corona virus. You can see a very close correlation to their loss of share price and the onset of the Corona virus “pandemic”. Will Carnival Cruise Lines close up shop……….I’ll let you decide!! So far the share price was around $50 dollars per share, the current price is $15. The most recent low was $7 dollars per share. Just something to think about.
These instances in my opinion are much easier to spot, and less likely to create the fast paced trading anxiety that occurs when day trading. Day trading is flashy, but does that correlate into making money for most people…….well not really.
I hope you enjoyed the article, and it puts your approach to the Stock Market in perspective. Even in day trading the goal is to have steady account growth. With this in mind what is described in this article provides the same.
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