Navigating The Markets in 2022
Both 2020 and 2021 brought roaring bull markets. It seemed like all a day trader had to do was log into their online brokerage account, click buy and HODL for big profits. Well, 2022 has been very different. A quick look on any given day at the most active stocks page on Yahoo Finance will typically confirm this as a sea of red is the norm more often than not. This year has brought a very bearish environment as the World battles a post pandemic recession. Many traders are struggling. It is important in this environment that day traders learn to adjust. Short selling has become more popular and an ability to take profits quickly has paid well. The HODL days are over, my friends.
Zero commission trading is more relevant than ever in this bear market. Aside from the obvious saving of money from zero commissions, as stated above, profits need to be taken quickly. Probably the most effective execution strategy in this market is to scale in and out of positions. When the market is uncertain and choppy, scaling in gradually into a position helps to control a trade. Likewise with taking profits, scaling out gradually as the move goes in the chosen direction ensures profits are locked in and the trade is well controlled. The problem with all of this scaling in and out is that it involves a lot of executions and executions mean commissions. We all know that this can get very expensive very quickly. Zero commission trading negates this problem.
Below we take a look at some chart examples from the TradeZero trading software ZeroPro.
The strategy in question involves short selling and scaling in and out of positions gradually. The red arrows indicate the execution of a short position entry and the green arrows indicate the execution of a short position exit. The stock in question is the meme stock $BBBY on August 30. Rather than just one entry and one exit, this particular strategy involves efficient navigation of the current choppy environment with a scalping type strategy that effectively keeps the trader in control of their trade.
(ZeroPro Charts : 30/08/2022)
As can be seen there are over 40 execution arrows on this chart. This means that without zero commission trading, the day trader in question may pay in excess of $100 on commissions depending on rates. With zero commission trading this $100 can be saved to take more trades with.
Below is another example from the same day from the stock $NERV. Again we see approximately 40 execution arrows. This particular day trader has now potentially saved over $200 on these 2 trades alone due to zero commission trading.
TradeZero Terms For Zero Commission Trading
TradeZero offers an outstanding package for zero commission trading. The specifics of this will depend on a day trader's country of residence. For TradeZero customers:
- In the USA who trade with TradeZero America all limit and market orders are commission free. The security in question must trade at $1 or greater and also must trade on the NYSE, AMEX or NASDAQ. Keep in mind U.S. pattern day trading (PDT) rules require day trading accounts to maintain at least $25,000 in equity in their account in order to be able to trade.
- Who are Canadian residents: all limit orders are commission free. The symbol in question must trade at $1 or greater, must trade on the NYSE, AMEX or NASDAQ and the limit order must not create an immediate match. The order must also be for 100 shares or more. The minimum amount to trade is $500 and the PDT rule does not apply to Canadian residents. For full terms and conditions of serviceclick here
- Who trade with TradeZero International, all limit orders are commission free. The symbol in question must trade at $1 or greater, must trade on the NYSE, AMEX or NASDAQ and the limit order must not create an immediate match. The order must also be for 200 shares or more. The minimum amount to trade is $500 and the PDT rule does not apply to International residents. For full terms and conditions of service click here.
Opening an account with the correct online stock broker is especially important for day traders trying to navigate the turbulent and choppy bear market of 2022. I have found that some of the best ways to successfully trade this 2022 bear market are short selling and scaling in and out of positions gradually. This helps to protect day traders against losses while quickly locking in profits. While very effective, this style of trading involves a lot of executions and this is why zero commission trading is a must in 2022 for day traders wishing to save money on every trade while optimizing their strategy. I’ve found that TradeZero offers an exceptional package for zero commission trading. The exact terms of zero commission trading with TradeZero will differ depending on one's country of residence and so it is important to be clear on the specific terms that apply to you.
Sources
TradeZero - Homepage (August 29th, 2022)
https://us.tradezero.co/
TradeZero US Pricing (August 29th, 2022)
https://us.tradezero.co/pricing
TradeZero Canada Pricing (August 29th, 2022)
https://www.tradezero.ca/pricing
TradeZero International Pricing (August 29th, 2022)
https://www.tradezero.co/pricing
Disclaimer
This content (“Content”) is produced by John Maher. The Content represents only the views and opinions of Mr. John Maher. Mr. Maher’s trading experiences and accomplishments are unique, and your trading results may vary substantially. TradeZero does not endorse the Content and makes no representations or warranties with respect to the accuracy of the Content or information available through any linked third party sites. The Content has been made available for informational and educational purposes only and should not be considered trading or investment advice or a recommendation as to any security. Trading securities can involve high risk and potential loss of funds. Mr. Maher is compensated by TradeZero for producing the Content and may also receive compensation for customers he introduces to TradeZero.
TradeZero provides self-directed brokerage accounts to customers through its operating affiliates: TradeZero America, Inc., a registered broker-dealer and a member of FINRA and SIPC; TradeZero Inc., a dealer registered with the Securities Commission of the Bahamas; and TradeZero Canada Securities ULC, an IIROC member firm and member of CIPF.