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Day trading large caps is far superior than small cap momentum stocks + “direct access” commissioned brokers are a scam

When I started day trading, I focused on the fast moving momentum stocks with 20%+ moves a day. I thought to myself that’s where the money’s at. But I was wrong and trading large caps is far superior for several reasons:

  1. Liquidity: You will rarely get bad fills in large caps, and the added liquidity makes paying for IBKR PRO or Lightspeed completely unnecessary. Thinkorswim is great for these types of stocks.
  2. Large caps adhere to technical analysis FAR BETTER than microcap momentum stocks. Microcap momentum stocks are often too difficult to predict because of this. My results with large caps are for more consistent and reliable, which means they’re far better for professional traders seeking consistent profits.
  3. You can often use leverage on large caps. I can trade NVDA at 4X leverage, but I can’t do that with APDN (nor would I want to).
  4. Large caps are also better than geared 3X funds like TQQQ. I can use 4X leverage on NVDA, but I can’t do that on TQQQ. NVDA will also often move 3% vs. a 1% move on QQQ, which makes it much more volatile than the average QQQ stock. That added volatility coupled with 4X leverage means that I can get far bigger moves on NVDA than TQQQ alone. For example, if QQQ goes up 1%, TQQQ will go up 3%, but I can’t use a lot of leverage on TQQQ. But if on average NVDA can move 3% on its own, and I can use leverage on it, the moves I can consistently get on NVDA are larger.

I think I found my sweet spot in large caps like NVDA. They don’t move as fast as crazy stocks like APDN, but they’re far more volatile than QQQ alone and offer many excellent set ups.

Finally, paying for “direct access” is a scam. It’s completely unnecessary for large caps, nor do I even think it’s necessary for small caps. I had a long conversation with a high level broker at TD Ameritrade about this, and I’ve come to the conclusion that their fills are equally as good as other brokers like IBKR PRO or Lightspeed (I’ve used all three). Anyone who tells you otherwise is using voodoo logic. Those commissions add up QUICKLY for high volume traders and will eat your profits. It’s not worth it.

My plays for today: Long RBLX at open. Rode that up. I then shorted RBLX at 53.5 and rode it down. Nice profit of over $3,000 today.

submitted by /u/Zen_Trading
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