Be careful what you wish for
I’m reading a lot of the overconfident irrational stock market talk that we heard during the last phase of the internet bubble. Trust me, “trade what the market gives you” doesn’t mean don’t bother to manage risk even if it sometimes appears that way. When not sure step back, when scared stay out or stay hedged no matter what it costs. If you think you can do no wrong because the Fed has you covered, think again in this phase. The Fed is winging it and scratching his head as he watches the market and economy and all the other political chaos just around the corner.
Everyone a genius in this market
No matter how convinced that after 2-3 or 4 years of trading you’ve got the game aced, the smart money knew how to get you that way using the technical road map. Creating “golden crosses” and cup and handle breakouts on even crappy stocks should tell you something. A lot of boil room like “for a fee” trading sites out their pushing anything that breaks out, and yes, IBD almost went out of business after “buying the dip” and every other bullish indicator got you into more trouble on the way down as after 2000 bottom callers became more abundant than even top callers are in most markets. And yes, pump and dump is still illegal but probably impossible to enforce when it comes to day trader sites for pay as that’s what we do when you get right down to it, Force technical’s one way using the news and buyers following the herd to squeeze shorts and stocks/ market higher.
If it looks and smells like a bubble it probably is
Yes, it’s a bubble if you don’t want to listen to the past, not just to what others are saying. It’s never different, just longer or shorter in duration and odds are you won’t get out with a good percentage of your profits. You’re sitting in your room trading all day, odds also favor that you’ll be the last to know until the media force feeds a theme or a market moving event to you, be it bullish or bearish.
Don’t burn yourself out
Trade the high risk with options so you know your risk. Don’t trade your unhedged core portfolio be it retirement or not when your gut and technicals tell you we’re in no man’s land. You can do without telling the kids about the bubble you traded that almost made you wealthy for life. Besides, if this market is still around odds are they won’t listen to your warning. Real money made holding the bottom of the best trading stocks with real fundamentals after real corrections and position trading more than a 1 day event. It’s what percentage you make on a trade or position that counts, not how many positions you have to hold to make so much a day/week/year. Pick your trades, know the company and how the stock trades even if you’re convinced that you’re renting it for the day and couldn’t care less. Stocks carry more risk than indices on any given day.
Your risk your reward
Don’t blame others for scaring you out of the market or trade, if you’re scared there’s likely a reason. If you’re young you might not like losing your new found wealth, but you will get over it and go on investing and in most cases with a lot less trading. If you’re married with a family and older “not so easy”…As they said during the last bubble “if you’re thinking about quitting your well-paying job after 2 years of trading don’t!” Odds are that high flying stock won’t be soon enough and unless it’s Google stop chasing that $1000 target
Don’t fight the Fed ..Don’t jump off that bridge following him either at this stage of the game.