How do Wall Street traders make such incredible gains? I need to know how they do it and what tools they use.?

Question

On the CNBC Sqwakbox Fantasy Portfolio challenge, 48 individuals have more than doubled their money in less than 2 months. 4 people have more than tripled, how the hell do they find holdings with such upside potiential? Do they use a Bloomberg terminal or some high priced/proprietary research tool. I read IBD, use yahoo Finance, watch Bloomberg and CNBC, but can only make 10%-15% a year. What am I missing?

Answer 1

You need to realize that thousands, if not millions of people are participating in what amounts to a big game. Not to discount the skill of the people involved, but with that many people, some are bound to get lucky and hit the jackpot, even if they pick completely at random. I am sure that for everyone who doubled their bankroll, there are a lot more who lost everything. Since it is all play money, there is no incentive not to make unsound but potentially profitable moves. In fact, that is about the only way you can win at this sort of game.



So don't take the luck of a few as evidence of what can be accomplished under normal circumstance.

Answer 2

Instinct. You are missing instinct and that is what got those people to those jobs and places in the market. It is important to note that they didn't show you the bottom portion of the list. I would imagine most of the top traders based everything on speculative equities--stuff they wouldn't normally place their money in because of great fear of risk. And that is the whole point--it was a FANTASY portfolio. Also, I am not sure of their limitations either. If they could trade options, it would have been easy to make money. In personal trading, a 3% move in an equity usually commands about a 50-75% move in options. Granted you could lose everything you own, but the possibility does live on that you could make a killing if you are right. I trade myself and with just stocks made about 140% in a year, but when I implemented options, I made about 400%. This was in a relatively small account, so it was much easier to grow than a large one.

Answer 3

If we knew the answer to that we would be in an island right now.

I also wonder how those people in the sqwakbox challenge have tripled their gains in such little time. I would understand if they used high growth small caps but stocks are restricted to no less than a 500m market cap. Otherwise i would've had chance. And I thought my 300% gain in 6 months with SMDI was impressive, these guys are gods.

Answer 4

Education, Training and lots of experience.



The market is complex and understanding it is no different then understanding the human body or how to build a bridge and how do people do that?



The problem is unlike those endevours learning to trade is plagued with cheap dime store vendors and not regulated like those professions.



It took me years of trading and lots of contacts before I was able to find the right education and educator.



Phil specializes in options trading and in my opinion is one of the best out there but that still won't help you find the right stocks to trade, that's another skill all together and takes equally as long to master it. That's why I'm here because now I need Phil's help to educate me on options better!

Answer 5

Chances are they follow particular issues very closely, almost like an analyst, if they themselves aren't analysts. Most gains of that nature are from IPOs that are in the money, wise option trades and other derivatives. The caution is, the greater the upside potential, the greater the risk.



Good luck.

Answer 6

If you are making only 15% a Year I strongly suggest you to try my advice in real time (Just like a Real Customer) for a month FREE and you'll see how easily you'll make at least 3% (Which is more than 30% After a Year)



Top 3 Answerer in Business & Finance. (Vote for me)

Answer 7

Wow! Making 15% is great! If you can consistently make 15% annually, after some years, you can double your investment. What is your investment strategy?