Recently, while watching the market, I noticed that many people who are stuck in long-term positions start to consider short-term trading. I’ve gone through this phase myself, and only later did I realize that short-term and long-term investing are fundamentally two completely different strategies.

In essence, short-term investing is about making profits from price fluctuations; you don’t need to care too much about the company's fundamentals. Instead, you should focus on the current market sentiment and themes. I’ve found that those who do well in short-term trading share a few common points: First, the stocks chosen must have sufficient trading volume; otherwise, you can’t buy in or sell out, and that’s a problem. Second, the stock price needs to be volatile enough; even if a stock has a compelling theme, if its price movement is too small, it’s not suitable for short-term trading. Third, there must be clear thematic support, such as AI and semiconductors now being the most direct capital flow themes.

Recently, I’ve noticed that among AI themes, chip design and server-related stocks are significantly more volatile than application software stocks. NVDA, SMCI, and others tend to have very sharp swings around earnings reports, with gaps of over 5% in a single day being common. Tesla is even more interesting; Elon Musk casually posts a message, and the stock can swing 10%. These high-profile leading stocks are most suitable for short-term investors.

The biggest risk I face when doing short-term trading is insufficient liquidity. No matter how right your judgment is, it’s useless if your opponent’s orders aren’t enough; entering and exiting will cost you. So, the first thing I look at when selecting stocks is trading volume, ensuring the bid-ask spread is small and that the stock price reacts quickly. Many people overlook this point, and as a result, they get stuck holding positions.

Besides stock selection, it’s also important to consider the freshness of the theme. Cryptocurrency concept stocks have been very hot lately. Coinbase and MicroStrategy tend to move in tandem with Bitcoin. When Bitcoin breaks through key levels, these two stocks often experience even larger swings than Bitcoin itself. Event-driven stocks like Oracle see implied volatility spike whenever earnings are released, making these ideal times for short-term positioning.

I suggest that if you want to start short-term trading, first practice with a demo account to get familiar with the volatility rhythm of these stocks. The AI/semiconductor sector currently offers the highest efficiency, with many high-volatility thematic stocks providing opportunities, but be sure to set stop-losses. Leading stocks with high popularity like Tesla and Palantir have stable liquidity and relatively clean technical signals, making them very suitable for beginners. The key is to understand which rhythm you are good at, then find stocks within that category, which will make trading much smoother.