 Good morning everyone and welcome. My name is Melissa Armell and today I thought it would answer a question from a student. He emailed me It's able he said hi. Melissa. This is a very random question, but just emailing you about something that has been bothering me as a new trader able to do the class I think in June I Was researching about institutional returns the top hedge fund managers returns is usually at or near 20% or less a year 2016 for an example and then he had a link Isn't that terrible? Are they taking extremely low risk stocks ETFs, etc. Because I for example, I'm currently averaging about 30% plus a week He's trading with me in the trading room, by the way Why do you think is their return so low or do they not report their actual returns fully? I really have hard time believing the top professionals at Wall Street is this low if I'm returning a much higher number Am I missing something? Thanks the best able. Okay. All right, so let's answer able is one question there Do they not report their actual returns fully? I doubt it. Obviously, I'm not their accountant But I highly doubt that that funds do not report their earnings Fully, I believe that they probably do they are under a lot of restrictions Have some of the top professional accountants and CPAs in the world handling their books. I'm sure that they return Report their returns in full. I don't know obviously But my guess would be yes that they do Also, the fact that able is doing so well, you know trading having a 30% return a week You know is because he's very very focused following me in the room and he did my class and you know He's he's following the rules. He's following everything. I taught him It's not impossible to make money the market, but I find a lot of day traders do not do well Let alone make 30% a week one of the reasons that able has been successful and extremely successful so quickly is that he does follow What I do in the room and taught I? Think more day traders would have more success if they were able to do that Overall in general, but there's a lot of pieces of the puzzle that go together for someone to be successful Individually as a day trader these funds for example, you know, it's it's a group of people that are all working together So you've got a lot of different minds The challenge with day trading is you're doing it use yourself and as an individual And if you don't have a mentor like me or someone calling the trades in the room like me You're basically on your own out there in the market by yourself When these when these funds are averaging Returns of 20% that to me is phenomenal. That is not low at all in my mind day trading and investing there are two very very very different things, okay, and Also the time frame that these funds are in stocks for the moves that they're looking for are far far greater Timestamp out then what we do as day traders. I mean some trades were in and out in minutes and We have to be very nimble and again. We use stops So it's it's just like night and day to look at it It's like comparing apples to oranges. You really can't compare But I want to be clear that you know funds that are averaging 20% a year are doing extremely well I mean that's amazing. So say you have a fund that you know Is investing a hundred million dollars I'm just gonna put that number out there if their return is 20 million a year. That's phenomenal so You know the risk that different funds take and the investments that they make vary the choices that they make to take Trades in the positions in certain stocks. It's just so different than what we do my my strategy looking at stocks that are gapping I'm looking for what the funds are doing with their money in in live time in the morning pre-market in the gap Are they buying there? They selling there? They shorting it But the funds are looking for much much different reasons to decide to take positions and stocks on or off So it's just it's just completely completely different. So it's you just can't compare But but don't think at all that professionals on Wall Street Are not doing well if they're returning 20% They're doing extremely well because you know, first of all, it's 20% of a huge Megalodon massive number and I wouldn't even say that it's low risk necessarily that the Percentage when you look at it of the amount of money that these funds risk compared to the percentage of amount of money The day traders risk They don't need to risk a huge percentage in order to get the returns that they need It's and it's not necessary. I guess I guess that's the point and the time frame that they're in trades It's much much longer in general when you're deciding to get in a position in the stock and this goes for anybody Individual group fund, whatever if you choose to take a position in a stock ETF whatever and hold it overnight for a long term you're at more risk in General than you are if you're getting in something as a day trade It's actually riskier to be in something for a long time than it is to be in something for a short time Why because it is easier to predict where somebody's gonna go right now in the next moment the next couple seconds the next minute The next five minutes next ten minutes. I'm very good at doing that But that is so much easier than predicting where something's gonna be one year from now six months from now five Years out because any one of a number of things could happen So do you understand so to say that they're taking low risk is not necessarily even the case because they're in these trades in these stocks Overnight and that in and of itself is risky. Okay, also, they don't have to maneuver in and out of positions They don't have the same ease to maneuver in and out of positions like we do like for example, and I'm just gonna I'm just gonna I'm just gonna use a spy as an example here 817 We fell late on that day here. Here's the 15 minute And I'm just I'm just using as an example because I just want to make a point If you were long the spy in here and wanted to sell a huge big Massive position of the spy into the day on the 17 It's not like you can press a button with 2,000 shares and get out at You know, I'm just gonna pick a number here to make my point at 245 34 which is the openness bar. Okay, so you see the volume in the bar They're up in the square at the top on the left. Okay, which is a lot of volume Okay for one bar. This is a 15 minute bar, but it's still one bar You can't you know as an individual trader You could sell your position and bump press to get out with 2,000 1,000 500 shares Whatever and get filled probably add a very close to the price while the stock is still falling So this is a lot of time the bars moving stocks falling You could probably get out pretty close to where you press the button to exit. That's if you had You had three million shares that you wanted to sell The chances of you getting filled three million shares right at 245 34 or zero. Okay So do you understand so it's like it? It's just so so different To compare the reason that I talk about institutional money so much And it is extremely important is because if you're trading on the power side of that It's easy as you as an individual to make money by getting in the moves But the moves that we even get of these stocks are so small compared to the moves that that These funds are getting and I'm gonna I'm using this chart as example to spy because it's hot a monster move But we we if we had gone long the spy We would have been in and out and anyone a number of these green bars here and the bullish cap ups that happen here in The spy which there was a bunch of them and I'm just going back to November last year not quite a year But there was quite a few but if you were long the spy and a fun number one you'd still be long it Okay, market's still higher market still looks great despite the fact we sold off the last two days We have not changed trend here in the market But the point is that This is such so much of a bigger move We would never have captured this whole movie even if we traded every bullish gap all along the way up in here Like the low of this bar down here. This was the election day 212 high the market was 249 I think yeah so almost a 40-point move is Is what you would have captured if you weren't a fun long the spy So that's way different than when we get in a trade and we go long a bullish gap Like there was one here where you could have captured on that day less than a buck of dollar till you get in and get the Stop get out 50 cents 75 cents a buck So do you see so they're they're in for the big big moves longer time period? 20% return is amazing and most funds are not doing that by the way. It's one of the top top top top places and You know, they definitely know what they're doing the benefit of day trading as an individual is that you can flip Your money over fast or quicker Then if you had a huge amount of money, so you want to be able to have the kind of You know returns that Abel's having he was saying he's averaging 30% a week But you know you want to be able to flip it around flip it around flip it around every day or as many days as you get good Trains because that's how you're gonna make money. That's how you're gonna build your account date trading is about Chunking it out and I've always said that it's not really about accumulating wealth Now over the course of several years if you become a very good trader You can accumulate wealth trading if you're taking large risk and big size in trades And then you can also do options trades to or overnight But accumulating wealth really as an individual is through Taking, you know positions and stocks for a period of a long time Day trading is really actually very easy if you have a good system like mine because you were getting in and out Very quickly. It's easy to predict where the move is gonna go fast you have to get the direction right which most people don't but I do and You can turn your money over very fast and when you look at the percentage, it's really astronomical, okay? Because you wouldn't get that in any other type of investment and you wouldn't if you had a fund But you wouldn't need to that's the point and overall the moves you're getting are are are massive So so it's okay. All right, but I wouldn't say that the the risk that they're taking is low at all You know if you had like I said a fund where you'd be risking a certain percentage It's still a lot of money. So you can't I don't I don't I don't generally talk about percentages when I do anything Anything I do at all. I don't talk about percentages. I don't think it's it's the right way to make decisions And it's too hard to make the comparisons. It's completely different. It's like night and day You as a trader have a job to go in and pull money out of the market every day And you must do the stock in the right direction and you must be you know trade within a defined period of time and get in and get out and that's your job and Over time you could make more money as you risk more and you get better and you and you home the skill Which I definitely have done and the longer that able trades with me his skill will improve So hopefully that answers Abel's questions If anyone else has any questions email me at Melissa at the stocks wish calm very interesting conversation If you have any other questions, you can certainly email me to when I will try to answer them via Via email or via video like this, but I thought Abel's question was informative to help other people as well Thanks everybody. Have a great day