At 6:30 a.m., most CHS students can be found groggily awaking from their slumber or mulling over the day ahead, but for senior Matt O’Grady, it’s time to begin another morning of day trading.
In the world of investing, day trading is the practice of using calculated risks and probabilities to achieve a quick monetary gain through equities. One of the most important factors in day trading is stock price volatility because a day trader makes financial gains through exploiting rapid price changes in the stock market.
This high-risk, high-reward aspect was the attribute that attracted O’Grady to becoming a day trader.
“My interest in day trading was inspired by the ability to trade small cap stocks that run over 100 percent a day and the thought of being able to double your money within a couple of minutes due to the sporadic runs of penny stocks.”
Before O’Grady could become involved in the competitive, complex world of day trading, he first had to learn the basics of long-term investing.
O’Grady analyzes the stock chart, looking for noteworthy gaps and trends in the data.
“I opened my first Scottrade account at 13 for long-term investing, and after about a year-and-a-half I realized it was too slow-paced and my account would only move about five percent a year. There was a more efficient way to compound money.”
While O’Grady had accumulated experience and knowledge through his forays with long-term investing, he still understood that he would need to study heavily before he could become a viable day trader. At 16, O’Grady began researching stock trading and momentum trading through reading numerous books and watching lots of videos and DVDs that provided valuable insight into the idiosyncrasies that underlie trading.
One year later, armed with $3,000 and a solid base of knowledge, O’Grady was finally ready to make his dream of day trading a reality.
Like any new endeavor, O’Grady experienced adversity at first despite his diligent preparations.
“At the beginning, I lost 40 percent of my account’s net worth in a week,” he recalls. “For the first two months I was extremely discouraged because I would always be up really big on a trade and wouldn’t want to take my profits and end up taking it as a loss.”
O’Grady persevered through his early struggles, fundamentally understanding that if he were willing to study and put in the hard work he could break the probability of not winning considering that nine out of ten stock traders lose money.
Since he began trading seven months ago, O’Grady says he has made around 150 trades on 50 different stocks and brought in a 183-percent return on his initial investment.
Looking into the future, O’Grady will look to find continued success in day trading through adhering to a few key fundamentals.
“Risk management is the most important thing, but I have also learned to not take too big of position sizes and respect the fact that I could lose all the money that I have and owe thousands of dollars to the stock broker.”
As O’Grady continues to develop his skills, the one constant will be his schedule: creating a watchlist of stocks before he goes to bed, waking up at 5:20 a.m. to see any news has happened over night or if any stocks are gapping up, starting to watch stocks about 6:00 a.m. to see if he wants to get into the market early and usually finishing with trading by 7:30 a.m.
While O’Grady has found individual success in day trading, he has also found a desire to aid others in gaining basic stock market literacy through the Investment Club.
CHS senior Trevor Bianchi, the co-founder of the Investment Club, has taken notice of O’Grady’s dedication.
“Matt’s focus and skills as a young trader inspired me to learn more about various techniques,” Bianchi notes. “He has made countless slideshows for the members of our club, showing them coherently the dense language of investing and helping them to better their skills as well.”
As the owner of a 4.34 weighted high school GPA, O’Grady looks to continue to day trade in his college career, wherever that may be.
“Ideally, I would like to concentrate on finance at either New York University or the University of Southern California”
Though trading may not be for everyone, O’Grady serves as a testament to the fact that if you are willing to put in the work, you can find success.
-Zac File
