I’ve started to notice a trend happening on Tiktok. These kids are telling you to start day trading and pointing out stocks that will make you rich while dancing no less. They tell you to jump into these stocks before it’s too late and create a sense of urgency. Kids pose as experts on stock market analysis and is misleading to those new or gullible younger kids.
I’ve seen a huge increase in these people after AMC and GameStop short squeeze. They probably got in at a good time and made some money after reading about it online. The incredibly good luck they had falling into that event suddenly made them experts in technical analysis and have turned investing into a game.
This post has definitely turned into a rant, but I have a point I promise. You should never tell someone to buy a certain stock, unless you’re a financial advisor or a legitimate expert. And while they may not technically tell you to buy it, they pose next to big bank accounts and pressure you to try to aim to do the same thing.
The Short Cut to Bankruptcy
Day trading is a risky venture that can lead to huge gains or severe losses. Over 80% of day traders lose money over the course of a year. That’s a big percentage! Even worse, the typical loss is almost 36%. This is something that can really drive people into severe debt to survive.
I won’t lie. I’m often tempted to try day trading, but quickly give that up after looking at the huge risk you take. It’s not for me, but I’m sure people will still try it out.
That’s totally fine. Day trading could be the right thing for you. There’s nothing wrong with this career path. It’s just the dancing kids shoving “stock expert advice” down your throat and influencing the younger generation to blindly jump into trading.
Get Rich Quick
The line is getting blurred between investing and gambling. There is too much focus on getting rich quick schemes and less on studying stock performance and proper analysis. Day Trading is fine to work yourself into, after practicing on fake stocks or very little money to learn the ropes.
Those coming online to tell everyone the next 100x stock is most likely lying or for whatever reason drank his own Kool-Aid. I’ve seen YouTubers shout out a new crypto coin with a low market cap, just to push the price and help them make a quick buck.
You need to be careful with where you put your money. These get rich quick schemes don’t work and isn’t investing. You’re gambling if you trust some stranger online to buy the next “Tesla” or some other outrageous scheme.
Research Your Stock Picks
If you are going to try day trading, ignore everyone. Learn the fundamentals of trading and the proper way to analyze stocks. You need to do extensive research to become even a little good at reading charts and finding potential winners.
Also, just because you can read a chart will not guarantee success in trading. You need to find good picks, get in at the right time and set up flags to prevent heavy losses. Set yourself up for success by having different exit points, whether you reach target gains or losses.
Go ahead try it but do your research. Investing in companies suggested to you by these fake gurus is a surefire way to lose your money. Find companies on your own or from trusted experts the right way.
Go Long Term
My preferred method of investing is to go long term. I invest in index funds and blue-chip stocks that I will never sell. I just invest my money and walk away. It’s less risky and you’re setting yourself up for the future.
I am also saying everyone should do this. I’m not dancing while telling you this, but it’s the truth. Set up a retirement fund at the very least and invest in some index funds or a target date fund for when you plan to stop working.
Final Thoughts
This definitely turned into a big rant, but after watching so many videos of these “experts” telling me the next Tesla or anything like that I get annoyed. I don’t want you to blindly follow someone’s advice in this manner.
There are plenty of great experts selling courses, daily Live trading events and so many other things where you can learn the right way to day trade and make your own decisions. It’s great to be inspired by day traders, but don’t be pressured to buy into their “suggestions.”
If you see another person suggest a stock to you, do your own research. Look at the potential it has and if it’s really legit like they said. Just don’t put in so much money you would suffer if it all went away. Only invest in what you can part with.
