YES THE TITLE SAYS SOME THING CRAZY.
BUT THERE IS NO SUCH THING IN HE WORLD
BUT THERE IS NO SUCH THING IN HE WORLD
The “lifestyle” of a pro trader is a big fat lie
Yachts, women (men for those ladies pursuing the dream), private jets and business class, presidential suites, fancy cars, 10k stacks, mansions, etc all encompass what is presented as the “dream trader life style”.
The dream advertised by stock picking subscription services, instagram accounts, and the like are all built on a foundation of sand.
Sadly, it’s all clever marketing and not a reality.
FACT: 99% of stock picking service providers make more money from their subscriptions and product sales than they do their own trading.
Taking tips from people “smarter” than you is a terrible idea
Hot stock tips are everywhere, and unfortunately no matter how experienced you are, it can be really hard to pass up a great buy tip, especially if the person has apparent access to some “behind the scenes” information no one else knows about.
Unfortunately, ads like the one above for penny stocks are designed to sucker you in to buy a product or service. These tips are utter junk and will leave your wallet and portfolio bleeding red in the end.
Reality: If someone even had a strategy that could consistently return even 11% per year, they’d be rich beyond their wildest dreams and would not need to sell picks.
Confirmation bias and your emotions are your worst enemy
Trading is a mental game. The mind is a beautiful thing, and given a runway of endless inspiration data, it can wreak some serious havoc.
Confirmation bias definition via Wikipedia,
Confirmation bias is the tendency to search for, interpret, prefer, and recall information in a way that confirms one’s beliefs or hypotheses while giving disproportionately less attention to information that contradicts it.
In the trading world, this means you see a setup or price action and quickly convince yourself to buy or sell. Unfortunately, 99% of the time you should be doing the direct opposite.
Technical analysis is one of the worst in provoking this natural human behavior. “Oh, I’ve seen this pattern before, it’s a buy”. There is a reason why online brokers offer dozens and in some cases hundreds of technical indicators. Indicators encourage you to see more “patterns” and trade more frequently.
In poker, a player can go on “tilt” and make poor decisions, ultimately losing their stack in a hurry. The same mental dilemma applies to trading.