Eight Day-Trading Benefits for Income Investors to Make Morning Moves

Eight day-trading benefits for income investors to make morning moves in the market can produce potent profits.

The eight day-trading benefits for income investors to make early-morning moves have been shown in the DayTradeSpy Trading Room advisory service led by two seasoned traders. One highly effective strategy is the “out-of-the-morning-gate” (OMG) trade,” said Hugh Grossman, founder and senior partner of the DayTradeSpy Trading Room.

Those eight day-trading benefits for income investors offer alternatives to the market volatility that can come from longer-term equity investing. As geopolitical risk rises with Russia’s unrelenting invasion of Ukraine and the Middle East conflict becoming a cauldron of combat in the wake of the murderous Oct. 7 attack of Israeli villages by Hamas militants who invaded from neighboring Gaza, the short-term nature of option trading is gaining increased interest, Grossman told me.

The DayTradeSpy Trading Room bases its recommendations on the SPDR S&P 500 ETF Trust (SPY), a highly liquid and diversified exchange-traded fund (ETF) that follows the top 500 stocks in America. The fund is familiar to many investors due to its sheer volume, and is resistant to market manipulation, Grossman said.

Hugh Grossman leads DayTradeSpy Signal, Trading Room and Ultimate Training Workshop.

Eight Day-Trading Benefits for Income Investors: 1. Profitable Track Record

The out-of-the-morning-gate (OMG) trade is sometimes overlooked but has a strong success rate, said Grossman, a seasoned options trader and trainer who founded DayTradeSpy Signal, the Ultimate Training Workshop, the Pick of the Day and the Trading Room advisory services. He described OMG as a “cool little methodology” that tends to stay in the background, making money unceremoniously for those who pay attention to its merits.

After years of analysis, Grossman determined that the market will usually deliver on a directional trade based on its breakout beyond a support or resistance level on a five-minute chart. Once the stock closes outside of either of those levels, there is a high probability that a 6% gain can be reached fairly fast, he added.

“In our live Trading Room, one of our early tasks is to establish those short-term support and resistance lines,” Grossman said. “Then, as SPY trading opens, we watch price action, triggering a trade when the price closes outside that tight range. We immediately put it up for sale for a 6% profit target.”

Eight Day-Trading Benefits for Income Investors: 2. 6% Solution

“’Why settle for just 6%?’ is a question often asked,” Grossman said. “The answer is simply a way to measure success. We need a standard by which to determine if the trade is successful or not.”

The strategy arose from witnessing how the market responded to early trading action, Grossman continued.

“When I followed other gurus in my early years of trading, many would claim success if the stock went up even a couple cents,” Grossman said. “In my reckoning, that would have been a dismal loss as I would never have sold it for a couple cent gain. It’s just not realistic.”

Eight Day-Trading Benefits for Income Investors: 3. Technical Analysis

“We use a 6% target, but many of our traders make much more than that,” Grossman said. “By using our technical analysis we provide in the morning Trading Room, you can follow the price action and walk away with greater gains. The 6% goal is a very basic level we expect to earn as a minimum, designed for even the most novice of traders.”

Trading Room participants can “score insane profits,” Grossman said.

“For example, the “OMG trade” [on April 15] triggered on the $515 puts at 9:35 a.m.,” Grossman recalled. “Entry price was $3.77 but these babies climbed to a high of $11.70 before the day was through. Of course, if anyone hits that high, it’s just a fluke, but many of our traders pull in double-digit [percentage] gains just by following our analysis.”

Not all trades will be winners, however, and it’s important to note the risks, Goldman said. Markets can and do reverse in a heartbeat, but the “OMG strategy” has proven itself to be a statistically sound system, even if, at the moment, it may seem hesitant to fill its target, he added.

Eight Day-Trading Benefits for Income Investors: 4. Avoids Heavy Lifting

“It’s another one of those ‘set it and forget it’ type trades, designed for people who may not want to do the heavy lifting,” Grossman commented.

A trader only needs to watch the early morning trading for a limited number of minutes to find a window of opportunity to pursue profits, Grossman said. If a trade is not triggered by 10:15 a.m. ET, there generally will not be one for DayTradeSpy Trading Room participants, Grossman said. But it is rare to see such “rangebound trading,” he added.

“These days, having a system such as this is invaluable,” Grossman said. “Markets change on a moment’s notice and may defy all rational premarket interpretations. Our typical day could consist of Iran attacking Israel, luring American involvement, mixed in with Israel attacking Hamas, while Russia continues its onslaught assault on Ukraine.”

Eight Day-Trading Benefits for Income Investors: 5. Seasoned Sherpas

Both Grossman and his partner Ahren Stephens service as trading sherpas. In the DayTradeSpy Trading Room, they effectively are shepherds to their flock of subscribers.

The out-of-the-morning-gate strategy generally identifies key trends that let wise traders simply go with the flow, Grossman said.

“The out-of-the-morning gate is a trade setup that we executive every day in the Trading Room, using predefined support and resistance levels,” Stephens said. “These levels provide high probability trade opportunities that we look for every morning.”

Ahren Stephens co-heads Pick of the Day and the Trading Room.

“When these levels [of 6%] are broken up or downside, we execute the trade,” Stephens said. “You can really have a nice set of winners with this breakout strategy.”

Eight Day-Trading Benefits for Income Investors: 6. Profit from Short-Term Moves

We were raised to believe that the longer you stay vested in the stock market, the more money you will make,” Grossman said. “That makes sense, perhaps, if you intend to bury your money in a mutual fund treasure chest and open it up decades later when you retire. I would consider that as a longer-term, capital-gain strategy. As an income source, however, there are better ways, something I discovered in my later years.”

Upon realizing that markets do not go in straight lines, but zig zag up and down, it was readily evident that the best way to make money was on short-term stock movements, Grossman continued. Using SPY to follow the top 500 stocks, the focus can be on assessing the economic sentiment at the moment rather than analyzing many stocks, he added.

Eight Day-Trading Benefits for Income Investors: 7. ‘Almost too Good to be Legal’

“Then, the key was to buy on a short-term breakout and sell for a relatively small gain,” Grossman said. “Using options, I also took advantage of the huge leverage, and was able to enter this trading arena for a small investment. Pay attention and you can bag a modest 6% or more gain, quite reliably on a daily basis. This was the best of all worlds. It’s almost too good to be legal.”

The Trading Room’s “out-of-the-morning-gate (OMG)” strategy determines the short-term support and resistance levels at the market’s open, then waits to pounce on the breakout, Grossman explained. The breakout usually occurs soon after the opening bell, he added.

“Buy the ‘at the money’ options after the first five minute ‘candle’ closes outside of either support or resistance, then immediately put it up for sale for a 6% gain,” Grossman said. “Set it and forget it. Come back later to collect your gains. It really doesn’t get much easier.”

This is one of the “key strategies” used each day the market is open for the Trading Room subscribers, Grossman said.

“As an income source, this system works very well,” Grossman told me. “The key is money management, as there are never any guarantees. And despite its reliability, the market will fake you out from time to time, as rare as it is. Never invest more than you can afford to lose.”

Eight Day-Trading Benefits for Income Investors: 8. Long-term Success Formula

“On a long-term basis, the OMG system has proven itself to work amazingly well, in both bull and bear markets. As an example, today (April 18) indicated a put trade,” Grossman said. “Had you acted on the alert, even if you bought at the highest price at the trigger time of 9:35, you still would have earned your 6% gain within the next two minutes. As it turned out, the value of those put options rose much higher later in the day.”

“The best way to earn a respectable income on the stock market is not by long-term holds but by daily, small increments that add up nicely,” Grossman advised. “Cash is a position I like to be in at the end of the day, especially so in these very volatile times.”

U.S. House Advances Foreign Aid Bill 

The U.S. House advanced a foreign aid package of $95 billion for Ukraine, Israel, Taiwan and humanitarian support on Friday, April 19, clearing a procedural hurdle to hold final votes this weekend. The vote gained unusually strong bi-partisan support in the House, as Democrats helped Speaker Mike Johnson, a Republican, gain a decisive 316-94 margin. Final approval could be given by the House this weekend, allowing the package to go to the Senate for approval.

Meanwhile, the Middle East conflict keeps raising risk, while Russia continues to wage war against the civilian population of Ukraine. In addition, the current market mix of economic news is pushing stocks down as Fed Reserve members delay plans to cut interest rates, Grossman said.

“One would think positive bank earnings would prop up markets, but then SPY hits a major Fibonacci resistance level, falls over the edge, motivating other investors to bail out like rats jumping off a sinking ship, all while a former president takes the stand on hush money paid to a stripper… all before lunch,” Grossman said. “You can’t make this up.”

Income investors willing to try the DayTradeSpy Trading Room have recourse to the negative news that can slam the market. Trading options in SPY is a proven way to dodge the market risk, Grossman said.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Special Sale! Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for reduced pricing on multiple-book purchases.