As many Canadians have no choice but to stay home during the ongoing COVID-19 lockdown, some have a lot more time and even disposable income on their hands — which has them turning to day trading for some excitement and extra income.
Oakville resident Saad Usmani works full-time in sales for a software company. But due to the pandemic, he works from home a lot more and like many, decided to try his hand at casual trading.
“Now I have time to focus on a hobby I am interested in like trading,” Usmani said.
Trading platform Wealthsimple Trade says 380,000 new users have joined them between July and December of last year, which is an 80 per cent increase from the previous year.
Another tool for traders, TradingView, says it saw a 131 per cent jump in users last March when the first lockdown hit and a 51.5 per cent increase in activity from existing users.
Financial expert and founder of MeVest.ca, Lesley-Anne Scorgie, warns while some people may do well at trading, they usually need some kind of formal training to be successful.
“Statistics show that almost 9 out of 10 times a do-it-yourself investor who is really not equipped with research and experience is going to underperform the market and very likely to lose money in the process,” she said.
While there have been ups and downs, Usmani says he has done pretty well based on the risk he has exercised.
“I still leverage a financial advisor, I still leverage my accountant, but in some cases, where I believe I have the knowledge to make a calculated and educated decision, I have the ability to do that without going through some formal process,” he said.
For those who may be new to trading on their own, Scorgie shares these tips:
“If you want to try your hand at stock investing, there are great tools called mock portfolios where you have fake money to invest to see how good you are. And then you aren’t losing any real money,” she said.
When you’re ready to move to the next level, Scorgie suggests starting small.
“Create a play account where you allocate a smaller amount of money where you can try your hand at day trading. Make sure it isn’t your retirement money,” she advises.
Scorgie also adds it’s important for people to know when to walk away if trading isn’t working. She suggests speaking with a financial advisor about different solutions that will help prepare you for retirement.
Usmani says he has made more cash as opposed to losing it, but adds that he isn’t making millions, which is why he is still currently working his regular gig.