Recessions, recessions, recessions. Even after a green day in the markets on Monday due to better than expected results from JP Morgan, recessions are on everyone’s mind. Last week marked the 7th consecutive week of losses for major indices, the worst losing streak since the Dot Com Bust.
With major assets from bitcoin to SPY in or a near a bear market or worse, the question for economists and investors: Is a recession on the horizon? Are we already in one? While Q1 US GDP numbers were negative, most are not predicting a negative Q2 print.
Nevertheless, the odds of a recession in the next 12 to 24 months are certainly elevated, not least due to the war in Ukraine, a lockdown in China, supply pressures worldwide, and continued global inflation.
In this week’s DDIntel
, we take a look at recessions and beyond, how to factor in inflation into your investment decisions, NFTs for dummies, the Metaverse and more. But first, we start with some tips for day trading babies, since some of you will inevitably gamble on the stock market during this volatile time.
What is a day trading baby, you ask? Anyone new to day trading. Even if you’ve tried day trading for a year or two, you are probably still a day trading baby. In fact, our first tip is don’t day trade. Why? Because only 5–10% of day traders are consistently profitable over a given year. But if you insist, here are 4 more tips:
- Understand the Macro
- Understand the Micro
- Understand the Fundamentals
- Understand the Technicals
It almost seems like you need to understand everything before day trading because to be profitable and beat the market, if it is even possible, requires understanding the big and small picture, the technical and fundamental, growth and value, macro and micro, and so on.
Much could be written about each of these points, but we will be brief here. You don’t have to be the next Keynes, but you should have a basic understanding of how macroeconomics works. A good starting point is Investing.com’s economic calendar and Fed Rate Monitor tool.
Watch how the market reacts to changing data to get a feel for how the macro affects aggregate stock prices. To be great stock picker, however, you also need a good understanding of microeconomics to see which companies have a competitive edge. Learn the fundamentals of trading, while learning fundamental investing principles.
Finally, of course any day trader must familiarize themselves with technical indicators. Many dispute the efficacy of technical trading, since according to the efficient market hypothesis it is impossible to predict future stock prices on the basis of past prices. Nevertheless, there is some theoretical support for technical trading, such as George Soros’ theory of reflexivity.
Don’t worry if you are feeling a bit lost at this point. That is why we at DataDrivenInvestor
, a marketplace for expertise where you can connect with experts on topics ranging from economics, finance, and investing, to machine learning, entrepreneurship, and blockchain development.
So buckle up, grab a cup of coffee, and check out what the DDI community has generated in the past week. Be sure to subscribe
, forward this to others
who might like it, and check out
our previous issues. You may also want to learn about how to work with us here