Cameron Newell earned $5 million day-trading stocks in 2020 after starting out with $1,000. He breaks down how he decides which companies to buy, and shares his top 4 trading strategies.

<p><img src="https://static5.businessinsider.com/image/60a7d993e25d05001880cdd2-1274/Cameron Newell .jpg" border="0" alt="Cameron Newell " data-mce-source="Cameron Newell" data-mce-caption="Cameron Newell turned $1,000 into $5 million in less than a year by trading stocks."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>On November 25, 2019, Cameron Newell embarked on a challenge to build his portfolio from $1,000 to $5 million, all while documenting his journey online. By December 23, 2020, he had succeeded.</p><p>"I didn't even graduate college, you know," Newell told Insider. "I had a 2.3 GPA in high school. Pretty much the same in college, 2.5 or something like that. So, I'm not anything. I'm not a genius. I just found what I love."&nbsp;</p><p>A friend first introduced him to trading and told him about the app <a href="https://www.businessinsider.com/personal-finance/robinhood-investing-review" target="_blank" rel="noopener">Robinhood</a>. Since the barriers to entry were low, he decided to give it a try.&nbsp;</p><p>"I never would have found trading, I can almost assure you, if it wasn't for Robinhood because I just never would have paid commission. I didn't feel like that was the right thing to do," Newell said.&nbsp;</p><p>At first, he didn't exactly know what he was doing and told Insider that he lost half his net worth, or about $9,500, which was a combination of money given to him by his parents as well as profits from side jobs he had worked when he was young.&nbsp;</p><p>After educating himself for endless hours about the market and historical trends, he began to trade again in September 2019, just before a <a href="https://www.businessinsider.com/gen-z-millennial-day-retail-trader-interviews-wall-street-options-2020-7">retail-trading boom</a>and this time with only $1,000. Within a year, he had realized gains totaling up to $5 million across three accounts, screenshots of his brokerage accounts show. His primary strategy was momentum day-trading, which involves chasing price trends by buying stocks on the rise and selling those in decline.&nbsp;&nbsp;</p><p>When Insider asked him whether he believes others can replicate his success, Newell responded that he does, which is why he now teaches others how to trade online, including on <a href="https://www.youtube.com/channel/UC2S_Aiet8K0OHJ9miJ1LP8A">YouTube</a>. But his approach may not be for everyone: Newell used various high-risk strategies that can be extremely costly but potentially rewarding. These include using margin, or money borrowed from a broker, trading penny stocks, in-and-out trading, and short-selling.&nbsp;</p><p>He told us how these tactics help him hit his goal, and three broader strategies he used.&nbsp;</p><h2><strong>He buys the dip</strong></h2><p>When he momentum trades, which he refers to as his <a href="https://www.businessinsider.com/why-you-should-consider-a-short-term-trading-system-2012-3" target="_blank" rel="noopener">short-term</a> strategy, Newell focuses more on the psychology around trading, or how other traders may react to volatility rather than company data. He looks for volatile stocks and buys on the dip because he anticipates a bounce back. He holds these positions for short periods of time, usually between three hours to three days.</p><p>"I'm looking for patterns. I don't get bias on companies. Now, in my long-term [account], much different, but in this account, I don't care what I'm trading. I'm looking for high volume, high volatility, and a lot of people who are getting emotional," Newell told Insider.&nbsp;</p><p>He also focuses on hot markets that people are talking about, like electric vehicles, and certain sectors that might be popular among retail investors who are trading in high volumes. If he reads positive news about a certain company, which may signal success, he will also long a position.&nbsp;</p><p>One example of Newell's successfully executed trades was done on December 9, 2020, after news came out that a newly public biotech company known as Greenwich LifeSciences (<a href="https://www.fool.com/quote/nasdaq/greenwich-lifesciences-inc/glsi/" data-uw-rm-brl="false">GLSI</a>) had positive clinical results for breast cancer treatment. When the market opened, he bought in and took profits as the price was still climbing. The share price spiked by nearly 998% that day and Newell made $65,000 trading it. He streamed the trade <a href="https://www.youtube.com/watch'v=TkKBsyy6Fj4" target="_blank" rel="noopener">live on YouTube</a>.</p><h2><strong>He looks for sympathy plays</strong></h2><p>If a particular company's stock price spikes in a short period of time, usually 300% or more in an hour or two, Newell will look for sympathy plays, which are other stocks that may be related to it. Usually, these are companies that manufacture the same products or provide a similar service.&nbsp;</p><p>He refers to those companies as "runners," which are usually <a href="https://www.businessinsider.com/what-is-a-mid-cap-stock" target="_blank" rel="noopener">smaller-cap companies</a> with cheaper shares. For example, if a company that manufactures electric vehicles experiences a rapid increase in its share price, he will look for other electric-vehicle companies, or those that manufacture parts for that company, and buy their shares. He basis this on past observations.&nbsp;</p><p>"<a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> ran up massive, but then there was a lot of runners behind it, like <a href="https://markets.businessinsider.com/stocks/blnk-stock">BLNK</a>, <a href="https://markets.businessinsider.com/stocks/fsr-stock">FSR</a>, <a href="https://markets.businessinsider.com/stocks/cciv-stock">CCIV</a>," Newell told Insider.&nbsp;</p><p>To find these sympathy plays, he uses a website called <a href="https://finviz.com/" target="_blank" rel="noopener">Finviz</a>. He navigates to the company in question's page, then click a link below its chart that lists similar companies.</p><p><img src="https://static2.businessinsider.com/image/60ad701ebee0fc0019d5976d-2400/Tesla graph.png" border="0" alt="Tesla graph" data-mce-source="Finviz.com" data-mce-caption="Tesla graph"></p><p>He then filters the table to display companies from lowest to highest share prices, and takes a close look at the companies with cheaper shares.</p><p>"Generally, when I'm looking at stocks, the cheaper ones are the ones that can go the most percentage-wise. So, you know if the stock is like at $60, it's a lot harder to double than if a stock is at three, or four, or five, or six, or seven or eight bucks," Newell told Insider.</p><p><img src="https://static2.businessinsider.com/image/60ad6f4da412370019d31edc-2400/Tesla runners.png" border="0" alt="Tesla runners" data-mce-source="Finviz.com" data-mce-caption="Companies that may spike when Tesla does"></p><p>One example of a sympathy play he pulled off took place on November 6, when he bought shares from Oncternal Therapeutics (<a href="https://markets.businessinsider.com/stocks/onct-stock" target="_blank" rel="noopener">ONCT</a>) to take advantage of Aptevo Therapeutics (<a href="https://markets.businessinsider.com/stocks/apvo-stock" target="_blank" rel="noopener">APVO</a>). The latter's shares had started rising on November 2 after the company announced positive news of a successful clinical trial. Newell didn't know about Aptevo's news, but he observed the stock climbing for a few days. He began buying Oncternal shares at $4.70 and sold at around $8.30, making about $214,000 in unrealized gains.&nbsp;</p><p>Newell said when he initially got started with $1,000, he was picking sympathy plays that had share prices mostly below $1, essentially penny stocks. He would hold them overnight to bypass the pattern day trader (PDT) rule which limits you to three day trades within five business days if you have less than $25,000 dollars in your account.&nbsp;</p><p>Some of those stocks increased by 200% to 600% in one day. As his profits scaled and he reached $25,000, he began to day trade and pick stocks that were trading at higher prices. However, he sticks mainly to small-and medium-cap companies.&nbsp;</p><h2><strong>He does take risks</strong></h2><p>Newell definitely doesn't have a conservative approach when it comes to investing. He makes quick trades and takes big risks that can amplify his gains.</p><p>More recently, Newell also began shorting stocks he thought would go down. He uses the same strategy when he shorts a stock as when he longs it. This allows him to catch opportunities that are both increasing and decreasing.</p><p>Towards the end of his challenge, he also traded with funds borrowed from the broker TradeZero, amplifying his gains in a risky but potentially rewarding practice <a href="https://www.businessinsider.com/what-is-margin-trading-how-it-works" target="_blank" rel="noopener">known as margin trading</a>.</p><h2><strong>He maintains a long-term portfolio</strong></h2><p>Newell keeps his <a href="https://www.businessinsider.com/guide-picking-long-term-stock-market-winners-e-book" target="_blank" rel="noopener">long-term investments</a> in a separate account from his short-term trades because he plans to hold them for 10-30 years. He transfers funds from his momentum account into his long-term account as a way to take profits while continuing to allow his money to grow. Here, he focuses more on the company, especially its CEO.&nbsp;</p><p>A key indicator for him is how a CEO handles themselves. Newell says he likes CEOs who are consistent with their statementsmeaning if they say something they don't contradict it, or their opinion doesn't change unexpectedly.</p><p>Other things he looks for in his long-term portfolio are consistent growth in a company's quarterly earnings, and <a href="https://www.businessinsider.com/industries-projected-to-grow-in-the-next-20-years-2020-9" target="_blank" rel="noopener">sectors that have future growth potential</a>, like electric vehicles and renewable energy.</p><p><a href="https://www.businessinsider.com/stock-market-day-trading-investing-strategy-millions-one-year-newell-2021-5#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/sneaky-ways-costco-buy-more-tricks-2018-5">Sneaky ways Costco gets you to buy more</a></p>
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