We recently published a list of 10 Best Day Trading Stocks To Invest In Now. In this article, we are going to take a look at where Cardio Diagnostics Holdings, Inc. (NASDAQ:CDIO) stands against other best day trading stocks to invest in now.
Over the past few years, retail traders have penetrated the stock markets across the world, challenging the dominance of institutional investors in this domain. These traders often engage in day trading, the practice of buying and selling financial instruments within the same trading day to capitalize on short-term market fluctuations. However, despite the self-proclaimed success of these day traders, latest data shows that the reality may actually be quite different. For example, a recent report by financial news platform Unbiased notes that the majority of day traders face significant hurdles in achieving consistent profitability. A study quoted in the report claims that almost 40% of day traders abandon their pursuits within the first month, and only about 13% continue trading after three years. Moreover, a mere 1% manage to sustain long-term success over a five-year period.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Data from the Financial Industry Regulatory Authority (FINRA) from 2023 reveals that 72% of day traders experience financial losses within a single year. Even among proprietary traders—those trading with a firm’s capital—only 16% report profitability, and a scant 3% earn profits exceeding $50,000 annually. Such numbers do not inspire a lot of confidence, and day traders thus employ a variety of different strategies to navigate the stock market. One of these is called breakout trading, the practice of identifying key price levels where significant movements are likely to occur. Per a study conducted by the brokerage firm Tradeciety, this strategy has a success rate of around 30%, indicating that while there are opportunities to capture short-term momentum, the majority of trades may not yield the desired outcome.
Another popular day trading strategy is trend-following. This generally refers to the practice of capitalizing on established market directions. The Tradeciety study claims that the success rate of this stands at about 20%. Despite the application of these strategic approaches, achieving consistent profitability is a challenging task for day traders. In this context, effective risk management is crucial for these traders to mitigate potential losses. The traders, around 88% of them, thus use stop-loss orders, which automatically trigger a sell when a predetermined price level is reached, thereby limiting downside risk. Nearly 62% of traders also employ position sizing strategies, determining the appropriate amount of capital to allocate for each trade based on risk tolerance and account size. These practices are geared towards preserving capital and managing exposure in a volatile market.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we made a list of stocks with a beta of greater than 2.5 and over 15% movement in the share price over the past month. The list was shortened and the ten firms with the highest number of hedge fund investors were selected. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A doctor delivering the results of an epigenetics-based clinical test to a patient.
Cardio Diagnostics Holdings, Inc. (NASDAQ:CDIO)
Number of Hedge Fund Holders: 4
Beta as of February 25: 3.54
Share Price Increase Over Last Month as of February 25: 15%
Cardio Diagnostics Holdings, Inc. (NASDAQ:CDIO) develops and commercializes epigenetics-based clinical tests for cardiovascular disease. In the third quarter of 2024, the net loss narrowed by 27% year-over-year to $1.41 million. On February 4, the company partnered with seven new provider organizations. This expansion reflects the increasing adoption of its advanced blood tests, Epi+Gen CHD and PrecisionCHD, aimed at improving coronary heart disease prevention, detection, and management. The addition of these new provider partners underscores the growing adoption of Cardio Diagnostics’ solutions across a wide variety of clinical settings.
Overall, CDIO ranks 4th on our list of best day trading stocks to invest in now. While we acknowledge the potential of CDIO as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a stock that is more promising than CDIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.