Friday, December 18, 2020

Do you Want to Trade Full Time?

Who woulda thunk that a pandemic would have created a movement for day traders.

Zero commission "gamer" traders....to be specific.

Folks have been raising some red flags because those who have been laid off or are under house quarantine are finding themselves with hours to spare and the brain power to learn a new skill. Turns out that "day trading" fits the bill for many in isolation....who are unemployed or underemployed.

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So, as a mom, I have to put on my big mama pants and just send out a mother's scolding. There aren't enough warnings going out to this new youngish genre of day traders.

Young people often have no concept of risk management or risk tolerance and most of them are trading on margin based on a faulty "approval process" that takes advantage of novice retail traders. As I stated before,....the "day trader" novices are often the ones who have already LOST their source of regular employment and/or their working hours have been downsized into a trickle of pennies. With their usual sources of income drying up into the dust.....they look at the stock market as a last hope....a 'hail Mary" shot, for lack of a better phrase. Are you beginning to sense the danger?

Folks who have lost their jobs and with minimal income supports are flocking onto "zero commission" type of day trading platforms and gambling and clicking away whatever pennies or "loans" they can get their nimble gamer fingers on. Now is not the time to get into debt, or more debt, or new debt. Now is not the time to gamble yourself into depression and/or bankruptcy.

The stock market does not carry any warning labels. The few warning labels are written in such fine print that most folks do not even acknowledge that the warnings exist. There are few hoops to jump through to simply get into the game. It is simply too easy for "broke" younguns to crash and burn in the markets in a very short time frame. The pandemic has created the perfect storm for desperate and housebound young humans. 

Not all young novice traders will lose out....but the statistics are not in their favor. Some studies estimate that as many as 95% of  retail traders lose all the money in their accounts, and some lose even more than what they started with, ....meaning they owe folks money....lots of it.....with interest accumulating by the moment. Think your college age child can't get into thousands or even millions of dollars of debt by trading the stock market? Think again. Do your research.


If you, a smart young person happen to be reading this...or if a good friend has kindly sent you a clip of this  blog post......you need to realize that you, especially if you are trading on margin and using options, you can not only lose what you have initially held in cash in your account, but you can wind up owing the brokerage house millions of dollars that you don't have. Yes, I am not exaggerating this danger. You are young and you feel invincible...I understand. I was young once too.

How is this possible? Because the market is ALWAYS hungry for new cash from retail traders to generate and maintain "liquidity". The big trading houses are too smart to be taken advantage of, so the individual newbie traders are the baby minnows being consumed by these big sharks swimming the markets.

The stock market is not a non-profit organization. It exists to generate funding for companies and individuals who know how to play it. Young folks who know how to play video games, get sucked in by the flashing lights and seemingly innocuous trading platforms that are designed to attract youthful gamers. Having quick eye hand coordination will only help you in trading if you understand the markets in general. Being a good gamer...even an expert gamer, does not indicate that you will become a profitable day trader.

Now, this being said, it has been noted that one of the biggest names in day trading today such as Stephen Dux, is also an epic gamer. But he has not been sluggish to do his due diligence to educate himself to understand the markets. His use of research and spread sheets to track the markets is legendary. It was only AFTER he taught himself to track and comprehend the markets did his "gaming" skills come into good use. 

Well, folks that's all for now. Sorry for throwing water on your day trading fire of euphoria. I really do hope that you will create a way to earn a properous living, whether that is in the stock market or some other avenue. But most and foremost I hope that you will not be "had" by the system or any individual or company that preys upon the young and inexperienced.

Peace out,

Carla

Tuesday, December 15, 2020

Trading Like a Girl

Yes, yes lady traders.....you do belong. You can do this.

Yes, I know that it might still feel like a man's world....but you must know that pioneers usually feel like newcomers...until ....well.....they don't.



or visit the youtube channels of gals like 
Humbled Trader or the Singapore trader named Karen Foo.

There are little bits that you can glean from each.
But you must never lose your own "style" and common sense.

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But back to what I wanted to chat about today...and that is
the art of staying flexible in changing markets. We may be in a bullish market on some fronts lately, but we don't know how long this will last. We, as all prudent ladies do, prepare for those downtrends and lower volatility seasons where the gains may be harder to locate, based upon your own particular trading strategy and goals.

But never, take any bloggers word for it. Most of the "crap" (pardon my language) you read online is not worth even the electricity it cost to produce the glowing words on your screen. Words are just words, and videos are just videos. Words are so easy to type and opinions are often sooooo loud and unqualified. A video can be made in just one moment with your cell phone. There are no middle men/women anymore. There are no "fact checkers" for the most part....and there are no filters between social media outlets and your own person learning zone. Make sure that you vet your "guru's" and mentors until only the best survive your scrutiny. The best ones will help you prepare for the "down times" and for when you make "losing trades".

The best stock market traders, acknowledge (although maybe not very loudly) that every trader has losing days. But the winners are the ones, who, over time, have bigger wins than losses and the wins are so significant, that they far outshine their losses. Reality bites sometimes, but is far more refreshing and accommodating. I would rather have one honest friend than a thousand folks who just flatter me. Wise friends and wise teachers and mentors will help you build something with a bit of longevity in it. Most success is not won overnight. By that, I am not saying that being an "over night" wonder is not possible, but that it is far more reasonable to plan on a longer learning curve, and it is ultimately easier to grow into gradual gains.

Those who glaze over the fact that markets are always in flux and changing in their nature are not doing you a favor. 
We, especially as female traders, must use our ability to  adapt to our advantage in the trading world. We must not get stuck into certain "beliefs" about the market that may hold our heads in the sand from acknowledging times of change.

Trading in a low volatility market and higher interest rates is going to feel and operate much differently from a high volatility market with low interest rates. From the look of things, we may be trading in a relatively low interest rate environment from now  until early 2023. But nothing is written in stone.

Stay frugal, my friends. Save for a rainy day.
Protect yourself and your loved ones from the changes that will most assuredly arrive.

Well, that's all for now. 
Trade like a girl....stay ready to adapt and always prepare ")

In peaceful productivity,
Carla.