Hi, I would like to share my story on the lessons I've learnt throughout my investing life so far.
Before I turned 18, my father had introduced me to the stockmarket by explaining the basic concepts of it. I.e. what is a share? What is a dividend? When is the stockmarket open?
As soon as I turned 18, I was also introduced to the world of gambling, I walked into the casino for the first time and was frightened by watching other people lay down hundreds of dollars in one hand into the table to cash in for chips to play at the table. I only played with less than $100 and played a bit until I felt like I had enough and came out slightly worse.
Throughout the rest of my teens I discovered things like online gambling, particularly betting on sports, horses, online poker, etc. I used to track all my bets on a spreadsheet, however towards the end I got lazy, but I can guess with a fair amount of confidence that I've lost approximately $8,000 to gambling before I even touched the stockmarket. This, for a 18-20 year old kid is a lot of money! I was paycheck to paycheck and spending it on betting to try and win my money back.
The reason I tell you this gambling story is because it's relevant to my behaviour in the stockmarket.
For some strange reason, I was able to stop gambling my paycheck and turned into an every now and then thing. Sometimes the weirdest piece of advice that you do not expect can help you stop your addiction. For ages, my friends would tell me to stop, slow down, you know the house has the edge, etc. But this single sentence from my best friend at the time for some reason flicked a switch in my head and made me stop. My friend said this "Actually, go ahead, you can gamble, let me know how you go". I replied with "actually no, I don't want to!". I feel like this whole time I was fighting back against all my friends trying to prove them that I can come out of this by winning my money back. But when one of them encouraged me to gamble, it made me want to fight back against that instead and for some reason it's helped me stop the out of control behaviour.
I stumbled upon a YouTube video about investing into the stockmarket and it was titled "trade like a casino". The video taught me how you can be the house when it comes to trading in the stockmarket. This caught my attention and I thought, yes, I can go back to gambling but this time I know that I have the edge and will actually come out on top. Not so fast! The more YouTube videos I watched, the more fake trading gurus I found with very mixed promises and random pieces of trading advice. Some of which are probably very good but I realised that most of my energy was spent trying to work out who is legitimate and who is just trying to make money off of you and actually has no idea. I went to a seminar and I won't name who the company is but I was taught that "90% of traders, lose 90% of their account, in 90 days!" And wow is that statement so true when you think about all the Redditors posting about their losses. Even if that statistic isn't entirely accurate, the general message remains that it is quite easy to blow up your account if you don't properly manage your risk, if you don't understand what you're doing and particularly when you trade on margin with high leverage, high spreads and high fees.
I gave intraday trading a chance. I found it to be highly emotional. Even though we are taught to try and be emotionless as possible, I found that the gambler within me wouldn't allow me to zone in enough. I tried to use a checklist for my trades and tried to use stop losses as much as possible but my emotional and wreckless behaviour made it almost impossible to day trade with. With day trading I possibly have lost another $10,000 - until covid19 came around and i played American Airlines for a 3 day swing trade 70% profit with all my money netting me approximately $8000 profit bringing the total deficit to being only $2000 down. Honestly, 2020 was a turning point for me.
I made a big realisation that day trading isn't for me at all. I can't handle it emotionally and it would be far better for me to invest in companies long term. At the same time I also discovered copy trading / investing also known as mirror trading. There's a few ways of doing that, a few brokers are now facilitating that but then there's also investing in an index fund as well. This means that I can gamble my money but in a responsible way with medium to low risk. This satisfies my cravings because I know my money is working for me and I am winning.
I am no longer going to be a day trader. Better for me would be long term investing or letting a professional manager or fund invest your money for you who has been consistently profitable over a long period of time. Since January 1 2021, so far I am up 25.14%. this is absolutely fantastic considering that it's other people investing my money and not the emotional, out of control me.
Disclaimer None of this is financial advice. Please do your own due diligence. You should consider seeking independent legal, financial, taxation or other advice to check how the content and information provided from this video relates to your unique circumstances. I am not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of content and information.
Submitted February 16, 2021 at 12:06AM by Apocalexico https://ift.tt/3u5vAzx
