Intro
A total fucking minefield. As of 2020 we have seen a huge spike in people who have started a brokerage account and entered the Stock Market. After COVID-19 hit the world and made most of us housebound, many people used their time to invest, or at least to consider it. Couple that with the inception and growth of companies that have 0 commision, 0 deposit requirement to start, adding the fact that established brokerages have slashed their requirements to almost 0, and you can see the perfect opportunity to get into trading.
The major online brokers — Charles Schwab, TD Ameritrade, Etrade and Robinhood — saw new accounts grow as much as 170% in the first quarter, when stocks experienced the fastest bear market and the worst first quarter in history.
Charles Schwab CEO Walt Bettinger said in an earnings release the broker saw “monumental volumes” of trading from the 609,000 new broker accounts added in the first quarter, with over 280,000 in March alone. The quarter included 27 of the 30 highest volume days in Schwab’s history.
CNBC Markets
Since then everything just got supercharged, and at the moment it seems that the whole thing is a rolling boulder out of control. Statistics posted recently on the average results of retail investors are not very encouraging, with many giving up quite quickly after they have, obviously, lost a big chunk of their money.
Into the thick of it
After you have opened your account a whole new and wonderous world has appeared before your eyes, with endless opportunities and gains to be obtained. Obviously once the first week (honeymoon) has gone by then you will find yourself trying to identify a new opportunity after you herd invested in TESLA 🙂 This will not be easy, there is no simple way of finding a new stock idea/oportunity. What do you look at, a chart?(bunch of lines), fundamentals?(what are those), SEC fillings, investing apps, groups, chats, YouTube. It soon becomes underwhelming, realising that you are going into an area where you have no experience, bearings or knowledge.
I have read a bunch of articles, watched some videos, followed some tips from other people, and reached a simple conclusion, I was doings everything wrong and still do.
Most people would have heard of Yahoo Finace, StockTwits, well if you go there watch any stock and you will see a feed filled with people complaining about how much they have lost(or in the process of loosing). This is the reality.
What most of us don’t realise is that even though entry into the Stock Market if free now, that doesn’t mean it will be a nice experience.
One of the most important things you should do is to learn, learn, learn, everyday. There are plenty of resources to do that, articles, books or videos.
Avoid taking advice from gurus, experts or the good Samaritan out there as they only have one goal, TO MAKE MONEY FOR THEMSELVES. Just ask yourself the question, Would I do the same thing, take time out of my day to share information with the masses just for the sake of it? There is also a reason for them to do it, that makes it worthwhile.
Take your time. Paper trade if you can for at least a year before really going into it. You have no idea about how many things you learn, and equally important the emotion you feel as your pick goes up or down over time. Choose a couple of stocks(ideally diverse, good, medium or bad companies) and follow them every day and see how they react to stimuli like, earnings, products, offerings, insider news and many other. I can assure you there are a lot of things happening to any company.
Technical and fundamental analysis is fairly complicated with a steep learning curve, requiring a lot of experience and knowledge to reach a level where you can make your own decision, tying to the above paragraph, TAKE YOUR TIME. It’s not a race and there is no need for FOMO(fear of missing out) as I can assure you opportunities are/will be plenty every week.
Conclusion
Its like any other skill, takes time and effort to learn and master. You can’t get rich quickly.