There is more energy around day trading than I have seen in years. Maybe it’s because of quarantine boredom. Maybe it’s because tech stocks have been soaring and FOMO (fear of missing out). Maybe marketing genius Dave Portnoy is responsible for all of this. I don’t know! Before you login to your Robinhood account, here are some friendly tips for anyone compelled to venture into stock picking.

For the day trader who intends to treat it like a business and build wealth.

• This is going to take a lot of time, so consider if you should spend that time on your highest value talents in some other realm.
• The odds are stacked against you. Many have tried and most have failed. No strategy works well every year. This is really hard!
• If you still want to do this, articulate your strategy out loud. How persuasive is your pitch? Find a thoughtful friend to ask you questions.
• Build a system to execute your strategy with rules for buying and selling. If your strategy is to go with your gut instinct, skip this step.
  • Day trader with no system: “Tesla just went up 200%… I can’t sell now!”
  • Day trader with a system: “I own no more than 10% in any one stock, so I sold Tesla to get back to 10%”
• Decide in advance how long you are willing to under-perform before changing your strategy. Recently outperforming strategies have previously lagged for 10+ years. Remember the ‘lost decade’ of 2000 – 2009? The S&P 500 had a negative compound annual return.
• Measure your results relative to the most compelling boring strategy. (Nobody actually does this. It is kind of hard to do.)