Obviously doesn’t apply to all, but I’ve seen three folks this week lose a years plus worth of gains because they thought they figured options out over the course of their 6 month investing career. It’s super unfortunate to see. We can guard against this by slowing down, and thinking through what we’re doing. I was just helping another trader that STO a put vice BTO. They’ll have a losing position on Monday to exit, shouldn’t be too bad but nonetheless a completely preventable mistake. The markets are quick to take your money, it’s an unforgiving place to learn. Please remember, it’s truly not a sprint. Not even an annual event. Our performance is built over decades. Take it slow and make time to learn what you’re doing - your future self will thank you. I made my largest investing mistake less than 2 years into my investing career and it crushed a sizable portion of my account. It happens to many of us but leverage the community so you don’t need to make the mistakes - learn from those who have been around a for a while. Keep trading! Erik
But I thought Stonks only go up? “Trading is Easy” wipeout happened in 2000 and it will happen again. Same story different stocks.
I lay a large part of the blame for this at the feet of major retail brokers. After cutting their stock commissions, they've poured their ad dollars into promoting options trading, leading the sheep to believe that it was the newer-faster-better way to make quick profits.
They're just excited to get their feet wet and don't think about the downside of anything. But I guess this is how the bigger fish must eat.
How about blaming the unintended consequences of government policy enabled to help protect people? The government didn't want small generally unsophiscated retails traders dabbling in day trading stocks because they thought they lose all their money. So they introduced the minimum $25k account size. So what other options did this group have? Day trading FX? Government closed that down as well. So they start trading in weekly options, probably THE fastest way possible to lose all your money for unsophiscated traders. Dopey governments where their 'help' often turns out to be just the opposite.
I don't recommend this for day trading. Maybe do it for a month to learn, watch the tape, see how stocks react in different situations. After that, I recommend 1 share though. You have to learn how to make money with slippage, having stuck orders, having orders not filled. You have to be a complete dumb ass to not be able to make money on a demo.
and stay away from intraday buying power. if you need to HOLD until it rebounds........then you cant do that that intraday buying power so....stick to your own cash........and your margin. and be careful w/the margin too! i lost so much. i wanna cry. as far as paper trading for many years........nobody will do that. the key is to start w/a $1K acct. if you cant make that grow, then you dont need to be using $25K. id say the transition should be from LTI to ST to DT...