I am NOT a long term investor. Why?
We, nor anyone, has a crystal ball. We do not know where META or Apple will be in 20 years. We do not know if America will be the #1 economy. There are simply too many unknowns, and un-predictable situations, in the distant future. Looking at the long term past, does not guarantee the long term future.
NOT a short term trader. Why?
Institutional bots and algorithms, inevitably, destroy these traders. They are faster and smarter than you (and me!). I posted this video, Traders blowing their accounts. Even if you get a few wins, eventually, those wins will be negated and turned into losses. In 19 years of investing, 6 publicly, I cannot name ONE long surviving day trader, verifiable, that has been successful. Not ONE!
So that is why I am a mid-term and long term trader. It is a balance between the two. Seeing a trend on a longer timeframe, spotting a local consolidation, and riding the breakouts NOW. Managing the position NOW.
That all said, I want to emphasize, you must let positions “cook”. For me this could be a few days to a few months. You need time, to allow a position to move, up or down.
Have a game plan, which means knowing where you will cut a position before you take it. Understand the volatility involved with the stock you are getting into. A penny stock will be far more erratic than a broad index fund.
What I am often seeing, and one of the most common reasons people take losses, is they are trying to do too much.
Too many people are OVER MANAGING their accounts, deviating from the ORIGINAL PLAN
Clicking too much. Second guessing decisions from a video they saw on the internet…which was based on a different timeframe than your original investment thesis. Cramming stops up too tightly, too early. So many reasons…
Sometimes I get told I am “incredibly patient.” It’s true. Let me give you an example of why being patient with trades, pays off.
You all know I am a TradingView gremlin. Always bouncing around on the platform. I get these notifications to do trading challenges known as “The Leap”.
In my head, I said: “Sure, this will be something fun to do and fill some time.” I signed up for the competition. This was trading forex and there were 60,141 participants. We could trade any of these assets:
I Started trading the first day and immediately went to the monthly timeframe, and noticed that of these, the Swiss Franc, New Zealand Dollar and Japanese Yen had the most clearly defined trends. They were moving. NOW. So I opened a short on USDCHF and NZDUSD…trend was down. I placed a long on USDJPY…trend was up. I set my stop and went about my day.
Then forgot about the competition.
A few days later, I remembered the competition…saw that the positions were in profit. So I pushed my stop up into profit.
Then completely forgot about the competition all together.
I was stopped out of all the positions. But had made a small profit of 3.7%. Nothing to brag about or to get an ego for.
But here is the moral of the story:
By doing less. By not over clicking. Not overthinking. Not swaying from the original plan. Not over managing… I beat 95% of participants! I did practically nothing.
A return of 3.7% beat 57,607 people. Which is PATHETIC! But it tells us one thing:
Too many people are over-managing!
Maybe one day I will care about one these competitions and see what real damage I can do. This serves more as a story on why to STOP panicking and over-managing.
I made it incredibly clear at the beginning of the year, and will re-emphasize, I am long term trading. This is to ignore the news, the chaos of geo-politics and incessant volatility. And with that mindset…no, we have not had 68981718% returns. But we are net profitable. The original StockTok ETF has tripled the S&P 500%, it was not UP at first. The StockTok ETF 2.0 is already trending well (its only a few days old, up 3.53% for the basket of stocks).
STICK TO THE DAMN PLAN!
And if you want to mid-term trade, go for it. But it is not what I am doing this year. These individuals may be having some success, but are being whiplashed like rag dolls in this kangaroo market. That is not to say every single one of my stocks will perform…the ones in this video may turn into a bust. But by sticking to the plan, not over-clicking, we will likely see more wins in the future.
As always, if you have questions, feel free to stop by the Main Chat with any questions!
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