A Stock Traders Nightmare
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So, what is the nightmare? It's called being a sucker and many new traders are suckers! Let me explain. The picture associated with this HUB is actually a picture taken of my personal account. I've isolated four stupidity trades that I now am sitting on hoping to for something miraculous to happen with.
If you will take a quick peek you will notice that with these four positions I own 3,600 shares that have a total market value of about $20.00. In fact, it would cost me more to liquidate these trades then to just sit on them.
What happened? When I first started getting serious about trading I was on a learning binge, signing up for anything that was free. I started getting all kinds of "hot off the press" emails about stocks that were set to "go through the roof."
Because I was an avid reader I read all of these cleverly worded sells pitches and new that the one I was reading was the next big mover in the market and I wanted all in. Now I sit with a bunch of dead shares.
So what is the lesson learned? Don't read all of the garbage!!!! Learn how to trade, put your plan together, and then trade according to your plan. Don't be like me and end up with a bunch of junk!
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@dinkan53 - thanks for commenting. You are mostly correct. Most individual traders lose money even though they talk a good game. They do things like what I did when I started, play hunches, follow sales hype, etc.
Having said that, I would also have to say that doesn't mean you can't make money -- good money! The three biggest keys to success are: 1. discipline: Trade with a plan and follow the rules of your plan 2. Position sizing: Enter the position with the correct size based on the size of your account, not the size of your confidence in the trade. 3. Cut losses early: The greatest way to make money is to not loose money. People have a natural tendency to get out of good trades too early and to stay in losing trades too long.
I asked a few of my friends those are doing online stock trading about the profit. You know they are doing it professionally, even though they are some day earning and some day loosing, but the net result is loss. According to me it is simply like slot machines and finally those doing this business will end up in zero balance account.
againsttheodds Level 4 Commenter 6 months ago
Simple tip yet truth. In any trade it pays to have a deep understanding of the type of business you would be putting money into. This can require lots of knowledge of the science or markets involved. It's certainly not just a guessing game and following any advice blindly could lead to moments of learning such as this. At least it was only $20. For that much I'd certainly sit on them and hope for the best.