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  • Writer's pictureScott Richter

Fewer stocks = better odds

Diversification is key, right? WRONG. At least if you want to be a big Money Maker. On my YouTube channel, as you can see, I trade very few stocks at the same time. And really, if you want to see the same returns that I’ve generally been seeing, by doing the exact same trades that I’ve been doing (which, really, you should take with a grain of salt, since I’m not actually a financial advisor), then you might consider doing the same. And there’s more than one good reason: From treating it like sports betting, to not ‘playing it safe,’ to saving yourself the headache of having to learn too much at once, let’s discuss them all:

Have you ever done any sports betting? Do you usually bet on 20 different games in a weekend? I wouldn’t recommend it. No matter how well you know sports (and assuming you’ve done extensive research into every team for every game), you’re not going to get all 20 right. More likely, you’ll get somewhere in the neighborhood of 10 right, and somewhere in the ballpark of 10 wrong. So, it’s a wash. And, in my opinion, the same principle holds true for stock trading… Are you really going to be able to pick 20 winners? Probably not. And if you’re just breaking even from getting half right and half wrong – sure, it’s “safer” – but then what did you really accomplish? You’re not a Money “Maker.” You’re more like a Money “Break Even-er.”

Speaking of playing it safe, if that’s you’re goal here, why are you even day trading at all? If you’re really trying to make serious money here, you need to be willing to (and be able to afford to) lose it all. This is not a game for the faint of heart. I mean, I just lost ONE MILLION DOLLARS in a SINGLE DAY. Can you handle the stress from that kind of downturn? Truly, if you want the safer route, there are better options than trading 20 stocks per day. A mutual fund expert is going to be able to make better long-term predictions than you and me. So, if that’s what you want, then there’s no shame in it – but then day trading isn’t for you.

And really, if you have other full-time work (which I strongly suggest, since day trading is not guaranteed, reliable, consistent income), do you even have the time to learn about 20 companies – and their up-to-the-minute business decisions – every single day? I certainly don’t! This is why you’ll usually see me trade only one, two, or three different stocks in a given time period. Just like anything else in life, don’t bite off more than you can chew. I can only chew on researching up to three companies per day. What about you?

I mean, the easy way out here – where you don’t have to do any research at all – is to just pay the monthly premium, join my Patreon group, and then make all of the exact same trades that I make, exactly when I make them. But just because my picks have served me (and my Patrons) well so far, doesn’t mean they always will. So, if you plan to take your destiny in your own hands with day trading, treat it like you would treat sports betting, take the risk on just a few stocks, and save yourself the time of researching too many companies – that’s what I’ll keep doing, and while I’m not certain it will keep making me millions, as it has so far, I have a fair amount of confidence in this strategy, or else you wouldn’t see me doing it at all.

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