Traders Respond to Top Questions
The Q4 2022 Trader Sentiment Survey consists of data collected between September 6th and September 16th, 2022.
Many of the traders within the community (37.41%) have taken online courses to improve their trading skills while almost a third have been self taught. There were a wide variety of other methods of training (19.73%), including mentoring, job training, hard knocks, and in-person seminars to name a few.
Live webinars and training sessions are the most popular way for traders to increase their knowledge with almost two-thirds of respondents preferring that format. On-demand courses (43.84%) and YouTube (30.14%) complete the top three. Other responses not listed in the original survey include emails from sources such as Market Taker Mentoring, books, and trading platforms.
There is a wide range of variability within the trader community in regards to account size. The data show that traders can participate with less than $1,000 in their account and over $1 million. In the survey 9% of respondents have account balances over $1 million. The most survey responses came from traders with balances between $50k and $100k.
During the current market conditions it is interesting to see that 1 in 5 trader accounts have decreased between 5% and 10% over the last quarter while about the same number have had almost no change in their account balances. Within the survey population 44.44% of respondents have lost money while 36.12% have had their balances increase.
The trader community is overwhelmingly positive, even in the current market. Almost 80% (79.99% to be exact) believe that their account balances are going to increase over the next quarter while 12.41% expect their balances to remain about the same. Only 7.59% have a negative outlook and believe that their account balances will decrease in Q4.
The trader community is relatively evenly split on the final close of the S&P 500. Roughly 40% of respondents have a bullish outlook and believe it is likely the S&P 500 will close at or above 4,000. Of the respondents, 22.6% were noncommittal in the direction of the S&P 500 and close to 37% of those who responded have a bearish outlook on the S&P 500’s end-of-year closing.
Over 75% of the respondents favored four investments for high growth. The leading investment, with 24.48%, was TSLA. The second most chosen investment was AAPL with 20.98% of respondents thinking it would have the highest percentage gain in Q4. Rounding out the top five were XOM (18.88%), AMZN (11.19%), and MSFT (7.69%).
For the traders in the community with more than 5 years of experience the percentages were TSLA (28%), AAPL (20%), XOM (22.67%), AMZN (8%), and MSFT (5.33%).
When looking at the sectors provided by CNBC there is overwhelming support for the Energy sector as being the biggest gainer in Q4 2022 with 40%. With roughly half that support is the Technology sector (21.38%). Rounding out the top 5 are Consumer Staples (10.34%), Consumer Discretionary (6.21%), and Health (6.21%). Industrials and Communication Services came in at the lowest confidence with 1.38% each.
When it comes to unemployment rates for the December report 59.58% of the community is expecting 3.5% to 4.5% unemployment to end the year [3.5% (19.15% of respondents), 4.0% (26.24%), and 4.5% (4.18%)].
The consensus among over 57.15% of respondents is that the Q4 GDP will be between 0% and -2%. A final GDP result of -1% was the most popular answer with 15.04% of the responses.
When it comes to the price of oil, there was quite a bit of variability in what the community thinks Q4 will bring. Over 17% of respondents believe that oil will be at the $90 price per barrel on December 31st. There were no other significant responses (over 10%) on the price of oil on December 31st. The next most popular response was $85/barrel at 8.15% support.
When asked what the biggest challenge of Q4 will be, over one-third (35.37%) believe that inflation will be the biggest challenge traders will face. Fewer but still a significant number of respondents (19.73%) believe that recession will be the biggest challenge. Global events rounded out the top three challenges at 15.65%.
Tools of the Traders
Among the traders who participated in the survey TD Ameritrade’s ThinkorSwim platform came in as the favorite with 38% of the respondents preferring that platform. Other highly preferred brokerages were Fidelity Investments (18%), Interactive Brokers (10%), Charles Schwab (7%), E*Trade (6%), and Tastyworks (3%).
Respondents were also asked to rate their brokerage on a 5-star rating scale. The chart below highlights the responses for the five most popular brokerages.
There is a wide variety of tools being used by traders. Many traders use a combination of tools to help them in their quest for trading success. It’s also common for traders to use the tools within their brokerage account. Some of the most popular tools from the survey are StockCharts (32%), TradingView (28%), and NinjaTrader (7%).
Overall, traders are satisfied with the trading tools available to them with an average rating of 3.91 out of 5. Over 70% of traders rate the tools they use four or five stars, while a smaller percentage, 7%, believe there is a lot of room for improvement, rating their tools a 1 or 2 out of 5.