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12-14-20 Weekly Update

Posts / By CJ

Kind of a ho hum week. Covid cases continue to rise. Vaccines are still an unknown for a few reasons – who will be getting them first? — will they work? How long before someone is immune after taking? Will there be a limit on supplies? If there are shortages who has priorities over others?

All 3 indexes (Dow Jones, S&P and Nasdaq) attempted to move higher hitting new highs on Wed but by the end of the day all 3 also closed lower.

For the week the Nasdaq had gained 3 of the 5 days but in the end fell .7% which ended a 3 week win streak. The S&P fell on 4 of the 5 days and lost 1% overall and the Dow fell .6% for the week.

The S&P and Nasdaq added a distribution day per the IBD standards. S&P has had 4 distribution days in the past few weeks and the Nasdaq has 2. However with these distribution days there is no real sell off.

All three looked to go lower on Thursday and Friday but all reversed by the end of the day.

The Markets are still in a …

This weeks Updates and Latest Ideas Below

TradingTheSetup-Newsletter 12-14-20

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Available research data suggests that most day traders are NOT profitable.

In a research paper published in 2014 titled “Do Day Traders Rationally Learn About Their Ability?”, professors from the University of California studied 3.7 billion trades from the Taiwan Stock Exchange between 1992-2006 and found that only 9.81% of day trading volume was generated by predictably profitable traders and that these predictably profitable traders constitute less than 3% of all day traders on an average day.

In a 2005 article published in the Journal of Applied Finance titled “The Profitability of Active Stock Traders” professors at the University of Oxford and the University College Dublin found that out of 1,146 brokerage accounts day trading the U.S. markets between March 8, 2000 and June 13, 2000, only 50% were profitable with an average net profit of $16,619.

In a 2003 article published in the Financial Analysts Journal titled “The Profitability of Day Traders”, professors at the University of Texas found that out of 334 brokerage accounts day trading the U.S. markets between February 1998 and October 1999, only 35% were profitable and only 14% generated profits in excess of than $10,000.

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