Every morning at exactly 6 a.m., Clarissa Cheng (12) taps “Stop” on her iPhone alarm app and rolls out of bed. It may be an early wake-up time for most teenagers her age, but on the East Coast where the New York Stock Exchange is located, it’s already 9 a.m. The market opens in a mere 30 minutes: Cheng flips open her laptop with a cup of coffee and begins sifting through a collection of pre-market volume graphs.

Cheng began her investment pursuits relatively recently, around the onset of the COVID-19 pandemic. 

“When I saw how COVID impacted people, I realized that financial situations are very important for everybody,” Cheng said. “After all, your financial security determines your living conditions.”

Yuktha Senthil (12) has invested in the stock market since she was an eighth-grader and also began investing as a way to seek financial stability.

“My dad told me that entering the stock market could make you money and just provide you with extra security apart from your income,” Senthil said. “That’s why I really wanted to get into the stock market: to get that sense of security.”

While “security” may not be the first word that comes to mind when on the topic of the stock market, stock investing isn’t as scary as people generally think, according to Cheng.

“I think a lot of people think [stock investing] is just gambling because you’re putting your money in the stock market and you don’t know for sure if you’re going to make a profit,” Cheng said. “But if you do enough research, create an investing plan, and stick to that plan, you can have confidence that you’re not just gambling. As you [spend more time] in the market, your plan will continue to develop and become more profitable.”

Cheng created her brokerage account for day-trading in mid-2020, but it was months before she put her first dollar into her account.

Generally, Cheng said she spends about 10-15 minutes each night checking on the statuses of the three to seven stocks she has been monitoring and formulates a plan to take the following morning. That way, she’s able to stray from emotional trading, the most prominent pitfall of investing.

“There’s a lot of mistakes that are possible when investing in the market: you’re going against millions of people, including top trading funds, which means that you won’t know everything,” Cheng said. “But the greatest mistake is emotion. You have to make sure you can’t get ahead of yourself and play how you feel in that moment.”

When formulating a trading plan, Cheng considers a multitude of factors.

“First, you obviously want to check if [the company] is making profit because that’s what a company needs to stay afloat,” Cheng said. “You also have to monitor the stability of the company management and the size of the company to determine how long you want to keep your investment inside of this one stock.”

Cheng also uses two additional factors to evaluate a stock: the support and resistance levels. The support level is a “floor,” a price value that a stock price historically hasn’t dropped below. The resistance level is the opposite, acting as the “ceiling” because the price of the stock tends to cap at this specific price range. 

If a stock is near its resistance level, Cheng will tend to avoid buying the stock since the amount of growth possible is drastically limited. However, if the current evaluation is close to the support level, the potential loss is minimized while the potential gain is maximized.

But despite stock trading taking up a relatively low amount of time, Cheng frequently sees the highs and lows of day trading bleed into her everyday life.

“I remember a few days where in the morning, I was just so anxious [because] the stock was going crazy, which affected my school day,” Cheng said. “Other times, I’m regretful [over a bad decision] or I’m just too excited. So I’m just like “Okay, gotta calm down.” I just have to get my mind off of it and just focus on school.”

Cheng and Senthil, who both gained the bulk of their financial knowledge from online resources like Investopedia and YouTube, are now looking to educate their peers on financial literacy through the Budget Basic club.

“We’re basically a bunch of teenagers who are really passionate about personal finance,” Cheng said. “We’re just trying to teach others about how the stock market works and more about personal finances such as taxes and title.”

Though topics like the stock market and personal finance are often perceived to be tailored for the older generation, Senthil began when she was in the 8th grade and advocates for others to learn about financial literacy as early as possible. 

“Teens don’t really get introduced to finances until like after high school, when it actually really matters,” Senthil said. “That’s actually really bad because we’re kind of stepping into this zone where we don’t even know what we’re doing. So it’s definitely really helpful if you get a glimpse of it before you get older.”