Hey Eddy,
Ha! The markets are a cruel best. With most capital amounts people are usually playing with, I am gonna suggest something very non sexy:
Buy the market ETF each month. Rinse and repeat until you are rich.
You got 2 big issues you are fighting against, transactions costs being a big % of your capital.
Bid-ask spreads being super wide on small stocks, and to a certain extent liquidity too, where unless you order manages to execute at the open or close, the market is very thin.
For most people who are trading figures in the thousands of dollars, the above is especially true.
Factor based strategies where you are longing and shorting 20-30 stocks each side, means you have to make 60 trades initially. This is just not feasible for a non-professional investor. How do you cut $2k 60 ways?
In terms of more advanced strategies which involve vol, you COULD go down the option path, and see what is over/under valued. A bit of fun for sure, and the bigger names and indexes should be pretty liquid.
For real, diversified strategies, you need to be operating in the $100m+ reals to even start, which for the vast majority of home traders, is not realistic.
Sorry I don’t have a magic bullet, but that’s the reality of it. I think that’s probably why crypto has been so successful with the home investor, or should that be speculator. The daily vol is abosolutely insane, so even with all the vast t-costs, you could either be dining on champagne by the end of the day and those costs are insignificant, you you lost so much, what’s an extra 2%.
So yeah, if you want a bit of excitement look into thematic ETFs, that have a basket of tech stocks, possible even leveraged, cannabis, nano tech, space tourism, you name it!
Hope that was somewhat informative.
Cheers,
Tino
