Earlier, when I wrote an article “Stop day trading because it is not profitable!”, There was a response. It seems that many people originally misunderstood that “stock investment = day trading”, and it seemed to be quite a shock.
At the same time, I received an inquiry asking, “Then, what should I do if I want to make a profit from short-term trading?” Personally, I don’t recommend short-term trading because it is not profitable and there are issues such as “high stress”, “severe unevenness in investment performance depending on the person”, and “asset formation does not go well”.
However, there still seem to be a certain number of people who want to become a stock trader, so I would like to talk about “Is there a way to make a profit even in short-term trading?”
◆ Trading Tips # 1: Day trading is only “short selling”!
According to a treatise published in the journal of financial economics, the stock market tends to be “hard to rise during the day.” Therefore, as a day trader, it is not realistic to “buy stocks during the day and aim for higher profits”. It’s a pretty disadvantageous technique.
Rather, in the case of the Japanese stock market, the tendency that “stock prices tend to fall during the day!” Has been confirmed. Therefore, if you want to make a profit by day trading, you should learn short selling. Short selling is a type of margin trading, and is a method that leads to profits as the stock price goes down. By using this method, you can expect a reasonable profit even in day trading.
◆ Trading Tips # 2: “Overnight” to buy stocks!
However, short selling is a risky and dangerous deal for beginners. So beginners shouldn’t touch it. Therefore, we recommend the second method called “overnight trading” that we will introduce.
“Overnight trade” is a method of aiming for price increases by carrying over stocks at night. The difference from day trading is the “timing” when aiming for profit. While day trading aims to “make a profit in the daytime”, overnight trading aims to “make a profit at night”.
The effectiveness of overnight trading has been confirmed by economists. According to the previous paper, the tendency that “stock prices tend to rise at night in the stock market!” Is confirmed. This tendency has been confirmed in the Japanese stock market, and even when I personally researched it, I found a tendency that “buying stocks at 15:00 and selling stocks at 9:00 the next morning makes it easier to make a profit!” ..
Therefore, I want to make a profit by short-term trading! For those of you who want to try “short selling by day trading” or “holding shares by overnight trading”.
◆ The basis of asset management is “long-term investment”
Short-term trading can be enjoyed like a game because you can see the results in a short period of time, such as whether you make a profit or not in a day or two. Therefore, I want to enjoy the transaction itself! For those who say, it is a good idea to incorporate it.
However, as I say many times, there are studies that “short-term trading is difficult to make a profit” and “short-term trading causes stress!” The basis of asset management is “long-term investment”, so be careful not to get too caught up in short-term trading.
● References: How do earning stock traders trade? (Https://allabout.co.jp/gm/gc/477556/) Described at the bottom of the article
Sentence = Ryota Nakahara (Money Guide)