Is day trading the S&P 500 and Bitcoin more profitable, or is holding positions more rewarding?
The truth is quite simple: from 1993 to today, all the returns of the S&P 500 have occurred after hours, not during trading hours.
During trading hours, there is almost no profit to be made because noise, hedging, and high-frequency trading consume all the momentum. The real gains come from macro news, corporate earnings, buyback orders, and cross-market rebalancing after the market closes.
For the vast majority of people, holding is far superior to trading. The data is the most intuitive: if you constantly enter and exit during trading hours, stop-loss, and chase highs and lows, you will end up with the worst returns over the entire 32 years. In contrast, maintaining the simplest holding strategy will yield the greatest returns.
Data shows:
If you buy at the opening of the U.S. stock market and sell at the closing, the total return can be 24.6%.
If you buy at the closing and sell at the opening every day, the total return can be 1,152%.
If you buy from the beginning and hold until now, the total return rate is 1,460%.
Interestingly, what if we replace the S&P 500 with $BTC?
The answer is similar to what many people think: the return from holding is nearly 31 million times, while continuous trading yields about 5.63 million times. Holding remains the highest yielding method.
Data is more useful than words. Every day, people tell you that buying high and selling low makes the most profit, but no one can consistently buy at the lowest point and sell at the highest point. However, holding is very simple. The S&P 500 is like this, and Bitcoin is too; the only difference is that you don't believe it.
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