Been watching the Reddit market uprising and had a few thoughts I thought might be helpful:
Hunting for shorts is nothing new. HF’s do it, algo shops do it, bank trading desks do it, and now retail investors do it. Fair enough.
We are watching bubbles inflate, the same way they do when the Fed floods markets with money. The only difference is the money is coming from retail traders and the bubbles are inflating more rapidly.
Everything becomes a ponzi scheme when prices outpace valuations in the short term. Historically it’s the little guy who ends up holding the bag when the bubble pops. Most retail folks will likely lose money this time too, but a random few will make a TON of money.
Be careful if you are new to this stuff. It gets addictive and can become very painful very quickly if you don’t watch yourself.
If you are trading all day, waking up in the middle of the night to check prices, and basically thinking about your positions all the time, turn the screens off. Take a walk, play a video game, read a book. Whatever helps you disconnect. It will help your decision making.
Set take profits and stop loss orders. Only risk what you can afford to lose. Most importantly, DO NOT BORROW MONEY TO TRADE IN THESE MARKETS!!!!!!
Hope this is useful. Stay safe and sane! #happyhunting
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