Life is about change. Our bodies change with age, our personalities are different with each decade. Even our spouses, our children and our neighborhood change over time. Sometimes we mourn the change, others rejoice in the change. However, one thing we cannot be sure of is that change is coming. The tricky part if you learn to adapt to this change. Trading, as in life, is no different.
Big business changes
In short, the major change is that trading is now accessible. Accessible to a new cohort of people who can access fractional stock purchases, from “commission-free” brokers and trade almost instantly. Traders can cluster through social media apps and cause huge spikes in stock prices.
The main points to remember
- Go with the flow. When something is hot, get out of debt, expand that stop, and get out of the swing long before you find yourself in the inevitable collapse.
- Expect wild volatility to show up very occasionally. Is it meme stocks? Is it Tesla? Are these Berkshire Hathaway A shares? It will be something and when it flies it will cause pain.
- Do not hold trades. The army of new traders will have to learn the same lessons as seasoned traders. Trading is tough and many, many people will end up buying all the way up
- Expect the retail deleveraging campaign to continue. Leverage is a killer and the bane of the retail trader. So advise all friends who are not traders, but traders, to only invest in cash. You will save them a lot of grief.
- Expect more scams to try and take people’s money as they point to “amazing opportunities” in the stock markets.
- Expect more mobile trading. People want to trade now! At work, in bed, on the bus and anytime.