Humbled Trader: "You are never bigger than the market."

Link to MarketWatch article: https://bit.ly/4dWqb3G

Shay Huang, a.k.a. “Humbled Trader,” has amassed a widespread and loyal social-media following for her educational tips on day trading and other short-term market strategies.

It’s a long way from where Huang started, 10 years ago, when she worked in the film and television industry and day trading was just a way to fill free time and earn extra income.

 Huang learned how to day trade by watching YouTube videos and taking online courses. She loved the idea of day-trading stocks from her home with a schedule that fit her lifestyle. During the first two years, she had many losing days. 

In one trading session, she lost more than $1,000 after following the advice of a so-called day-trading guru. That’s when Huang realized that trading isn’t about finding the “perfect” system. It’s more about knowing yourself, learning how to make high-probability trades, and following a structured risk-management discipline. 

Now Huang is a day-trading educator, teaching others what she knows. She shares her good and bad trading days with her many followers on YouTube and Instagram, where she talks about trading lessons she’s learned. 

In this recent interview, which has been edited for length and clarity, Huang discussed her early struggles, the stocks and trading strategies she uses, and her recent switch from day trading to swing trading. 

MarketWatch: Why do you call yourself ‘Humbled Trader’? 

Huang: Because I was humbled by the market. As traders, we go through a lot of phases. In the beginning, you really don’t know anything and should anticipate losing money at first. And that’s fine. I started making money in my third year of trading, and that’s when I got a little cocky. I thought I was the best. That’s when I learned that if you don’t follow the rules, and don’t practice good risk management, all it takes is one trade to wipe out your trading account.  

MarketWatch: What trade wiped you out in that third year? 

Huang: I started shorting Snap when it was $9 per share. When it went to $14, it blew me up. Nowadays, there are certain small-cap stocks with a low float at $5 per share that can go to $90 per share. That will definitely blow you up even if you have only 100 shares. 

MarketWatch: What lesson did you learn from this experience? 

Huang: You have to stay humble. You are never bigger than the market. I also traded too big for my account size. If you are a beginner with a $3,000 account, start by risking no more than $10 or $20 in a single trade. Keep trades small because your losses can spiral, especially when you lack experience. I wish I had traded really, really small with 10 or 20 shares rather than 100 or 500 shares. You’re not going to make much money trading 10 shares, but you are not going to blow up, either. That’s the way to go if you want to learn how to trade.

MarketWatch: How did you recover from the Snap disaster? 

Huang: I had some savings outside of my trading account. I also took weekend and overtime contract jobs. I remember taking a three-month break and coming back to try again. This time I traded a lot smaller!  

MarketWatch: Did you ever think about giving up trading? 

Huang: In the first two years, I never had a green month. That’s when it would have been easy to give up. But once I had a small taste of what it’s like to trade and make money on some of my trades, it was very hard to give that up. 

MarketWatch: How do you determine your trading position size?  

Huang: I’m very strategic now about when to increase and decrease size. When I’m going through a red month, like I did in September, I risk less and size down. Hypothetically, if I normally risk $2,000 on a trade, I may only risk $1,000 or even $500. Conversely, if I start having a green week or month, I’ll return to my normal size. I increase size when I’m doing well. 

MarketWatch: How did you learn to be so selective with your trades? 

Huang: I keep a journal and track everything. I found that on the red (i.e., losing) days and months I trade the largest number of transactions and ticker symbols. I realized I should do the opposite and be more selective with my trades. Since making that discovery, I’m not in a hurry to make back everything I lost. I just go back slowly, dip my toes in, and see how the market reacts. 

 MarketWatch: What is your trading style right now? 

Huang: It’s interesting because my trading style has changed. During the COVID-19 pandemic from 2020 to 2021, I day-traded every day. At the end of the day, I closed out and wouldn’t hold any overnight positions. It worked very well. But last year and this year, I’ve transitioned more to swing trading. I may hold overnight for two or three days. For example, Nvidia keeps on trending so I might hold it a month. If I see a trend continuing, I’ll keep holding for a couple of weeks or a month. 

MarketWatch: Why have you changed trading strategies? 

Huang: I’m at a stage where I want a little less stress. Day trading is very stressful. You come in every day starting from zero and you’re trying to find the best opportunities each day. It’s much more stressful than swing trading, when I begin the day with good positions and I’m riding a trend. Also, the market this year has been a lot trickier for day trading. There’s a lot of choppiness as we go into the U.S. election. Although it’s hard for day trading, it’s better for swing trading because the overall direction has been up. 

MarketWatch: What market indicators do you use? 

Huang: I use the eight-, 20-, and 200-day exponential moving average (EMA). If a stock is a loser, I cut it within the first week. When it’s a winner, I let it trail. If a stock I have conviction about breaks below the eight-day moving average, that’s fine. But if it breaks below the 20-day, I’ll use a stop-loss to get out and take my entire profit. A lot depends on how volatile a stock is. 

MarketWatch: Any other indicators that are important to your strategy?

Huang: For swing trading, I only use moving averages, and I look at volume. I use VWAP (volume-weighted average price) only for day trading. I mostly use those two. In the long run, it doesn’t matter which indicator you use as long as you find one that allows you to be disciplined and not take a profit too soon. To be profitable, your winners need to be exponentially bigger than your losers. That’s how you stay in the game. 

MarketWatch: What are the three biggest mistakes that traders make? 

Huang: Number one is they risk too much, especially in the beginning. The second mistake is they hold a losing position for too long. They keep thinking it will come back. Or if short, they think it will fall. That’s what happened to me in the Snap trade. It was a day trade, but because I was losing, I turned it into a swing trade. Big mistake. The third mistake is they sell their winners too early. 

MarketWatch: What’s the best trading advice you ever received? 

Huang: The best tip I have for beginners is to go long on the green days and go short on the red days. It’s the simplest thing because stocks tend to trend, especially larger-cap stocks. Obviously, you have to know how to buy the dip but in the bigger picture, on green days stocks tend to keep trending higher and on red days prices tend to go lower. It sounds very basic, but understanding that helped me a lot. 

MarketWatch: How do you prepare for the market day? 

Huang: I start the day scanning sectors and stocks. In the premarket, I can see how the market is shaping up from how many stocks are gapping up or down in the premarket, and which sectors are gapping up or down. I look at sectors, then I look at individual stocks and any news associated with them. If there are no gapping stocks, I know it will be a very boring day. I wouldn’t be day trading on these days. 

MarketWatch: How do you take advantage of market volatility? 

Shay: A lot of times when many stocks gap down, traders can take advantage of market fear. For example, in early August we had two or three days with a huge gap down in the S&P 500. Those are the days that experienced traders can go long when stocks begin to bounce aggressively. 

MarketWatch: What have you found is the real secret to successful trading? 

Shay: It’s going to sound like a cliché but trading is mostly about understanding yourself and your triggers. What triggers me is when I sell a stock and then see it go higher. You have to be very good at self-reflection. Trading is not just you against the market. It’s also you against yourself.