NFLX had a scary fall yesterday.
Shares fell 21.8% in a single day, which is $49.1 billion in market cap. This is horrifying considering it is part of the FAANG group of stocks, which are basically the strongest tech companies in the world.
The stock dropped from $508.25 on Thursday’s close to $397.50 by Friday’s close.
The last time NFLX was at $397.50 was in April 2020, which means that if you had bought it during the start of the pandemic back in April 2020 and held it all the way, you’re now back to square one.
It hit an all-time high of $700 back in Nov 2021, but since then it has been in a steady decline.
This is a very good example of why I don’t like swing trading. It’s just not my kind of thing.
I just hate overnight risk.
I hate the fact that you can go to sleep and wake up having lost 20% of your position overnight.
It’s quite a helpless feeling.
(Genuine question because I’m not really sure: Assuming you had set a stop-loss of say $475, how much would it have helped in yesterday’s case with NFLX? Or would it have helped at all? Because the stock essentially dropped around $100 in AH trading on Thursday.)
I hate the fact that you can hold a stock for weeks/months and see its value go up and up, only to have it all come back down to zero in a blink of an eye, not having made a cent of profit.
Just imagine if you went long on NFLX in June 2021 at $500, saw it go all the way up to $700 in Nov 2021, and now find yourself holding the bag at $397.50 after diligently holding the stock for seven months.
This is not to say that day trading is superior to swing trading or long-term investing, but I prefer day trading because I can hold my positions within the say day (at most 15-20 minutes per position), and I will close all my positions before I go to sleep.
At least I have peace of mind when I go to sleep knowing my work is done for the day, be it a green day or a red day.
I don’t have to worry about AH trading, nor do I have to worry about the next day’s PM activity.
At the end of the day, do what suits your personality best.
Do what give you peace, or at least what stresses you out the least.
I Don't Have A Course To Sell 