Thread by @Capital__Gainz

Quick self-reflection thread.. kinda funny in retrospect:

*Used to believe that tweets moved stocks, they don't.. $$ does

*My planned exits were easily influenced by others (often lead to holding thru the dump, bye bye profits)

*Believed others' tweets about their positions..

..no, they didn't hold thru the carnage. (They sold & never looked back)

*Often bought into a co's POTENTIAL.. execution by mgmt is what matters (potential usually = poor mgmt)

*Rarely used stop losses & often cancelled/ignored --> (more bagholding of potential --> big losses)

*Knew little about/ignored macro drivers.. didn't care to learn about general market implications or the WHY my positions were red, just saw P/L

*Diversification was stupid to me.. I could make much more $$ all in on one co. (HAHAHA.. can lose the same way)

*Placed too much..

..emphasis on $ amount of potential profit.. holding for $1k gain, but ignoring price action. (Keep exits fluid)

*Most importantly, I used to be a sheep - blindly following profiles on social media into positions at their command. Didn't want to put the time/effort into finding

the understanding I needed to start finding my own ideas/trading style. (This is where most of us start.. as sheepish followers & this is where majority fails to adapt - when it requires effort.)

These are just a few of many notable lessons (often learned the hard way)

The main "click" for me was being sick of not understanding the "why" & the complete lack of RESPONSIBILITY. (easiest sign somebody doesn't know jack sh*t.. blaming others for their losses)

Take this for what you will.. These are just a few things I wish someone would've drilled

..into my head before I started and might've helped limit my "market tuition"

I still get caught up in emotions/make stupid decisions that sometimes prove costly, but avoiding these common newbie misconceptions might help limit your own cost of understanding.

Cheers

Just going to keep adding random thoughts/lessons learned when I think of them.. too hard to construct chronologically...

Another misconception I had: in order to maximize potential gains, always have your capital at work..

Sometimes (like present) cash is the best holding

Note from 3/30: Short Sellers

Short sellers are a very real & much needed part of trading. They can be both very right (sh*tty/shady company) and sometimes simply advantageous and stubborn (low volume pulldowns by large attacks, etc.)

The common misinformation that you'll see

on FinTwit (FT) is that these shorts are EVERYWHERE and some folks like to use them as excuses for why an idea is going down - that is not always the cause - often times not at all.

Watching Level 2/tape can usually key you in on their actual presence, but for someone newer

that's a different animal & YouTube is a great resource. There are numerous sites you can use to help identify the presence of these shorts and whether or not they're actually there (again, many times they're blamed, but not actually the reason why PPS falls)

to begin with. My top 2 are Finviz.com (basic short interest, shows as Short Float.. % of float sold short) and Fintel.io (I have premium which allows up to minute). You can use iborrowdesk.com as well (15 min increments) IBD prolly best if new

Using this tool, you can search a company by ticker & it will show you "Borrows Available" upd. every 15 mins. This data can be used to show whether or not shorts are actually shorting (borrows go down) and when they start to cover (buy back shorted shares - borrows go up)

Now there's some holes in all of that, but the main point is to help you stop being misled. Many times folks use shorts as a reason for the dump/selloff, but they really aren't even there, nonetheless actively shorting. So when you see comments about them, positive or neg, you

can just look it up yourself & see if it checks out. If they're saying shorts are hitting, yet borrows are going up (barring new registered shares/form 4's etc) odds are you're being misled - they rarely take time to actually look & confirm for themselves. Lastly, short squeezes

(as beautiful as they are) aren't nearly as common as most believe. For those Volkswagen/GME squeezes, there's much more that goes into those & far from being commonplace. It's important 2 note that shorts can be a great accelerant on upward moves, but often times folks will say

"loaded with shorts" or something along those lines, when the short interest isn't really present at all. In other words, short squeezes aren't something I'd put much effort pursuing - often times those attempted squeezes don't amount to much on the buy-side w/o solid catalyst

I'd bookmark those tools & put them to use when you're curious if shorts are to blame - often times not at all. If you want to understand more, I'd start educating yourself on Level 2, market makers to watch for, locating the "ax", etc.

The more you know the less you get played

3/31: Earnings report strategy:

This is somewhat of a task to try and cover & strategies will vary depending on who you ask, so I'll share mostly the approaches & what I've had most success with..

To start, I rarely will hold any large positions through an earnings report

The reason for that is you truly never know how the market is going to PERCEIVE the report. A lot of this depends on the general market/tape at the time of report, as lately even good reports get sold off. The main question I would ask yourself is what is your timeframe..

If you're a trader by nature (intraday/short-term swings), I can't recommend holding through earnings bc there's a chance you'll be an investor afterwards - assuming no stop losses are placed in advance. Most traders won't dare hold thru report, but they'll play the price action

If more long-term/investment minded, odds are you believe in the company long-term, so most LT investors will hold & add/scale out accordingly. This isn't my strong suit.

My approach (even on swings/more LT) is normally to close prior and play based on the market reaction..

so if it's a good report & the market likes it, I'll add back on a dip or wait for a better entry in a few days. Bad report, even better. I closed w/ profit & I can still re-add lower. I don't enjoy the unknown aspect of holding through earnings. Never have, never will.

In rare cases, if a company continuously beats and reacts positively afterwards, those I will hold through (again.. rare). Also it sometimes helps to look at earnings history, how does it USUALLY go (historical earnings & corresponding price reaction) You could play the odds

Oftentimes, if there's a ton of chatter/expectations of a good report, the reaction isn't as significant as most expect (mkt operates on future expectations).

My common approach is to just play it safe: close out & assess afterwards. You can always re-add (even if LT).

Obviously, as mentioned earlier, there's a few other factors to always consider, but I like to be conservative about it.

That's my approach & some will say that's stupid, others might find smart. I truly don't care b/c it works for me.

4/5: HOW TO UTILIZE TWITTER:

Fair amount of messages have been relating to who to follow/if said account is to be trusted, so I thought this one might be beneficial to the newer folks..

Short answer: Use Twitter as a scanner for IDEAS & not for blindly following others.

This is one I always take caution answering as everyone is different & eventually you'll find your particular trading style & thereby some accounts that you can trust over time.

"Trial & error" is usually the approach I recommend. You'll come to find others who either think the

same way, or approach ideas with a perspective you find interesting & ideally profitable.

On the other side of things (who not to follow), that's another thing you'll come to realize by simply following and taking note of their ideas & performance. Always keep in mind that

every trader is different when it comes to strategy, TIMEFRAME, and also their method of sharing ideas. If they share ideas w/o any thesis (reason behind idea), I would recommend taking caution.

Again, this is Twitter.. you'll find those who often share great ideas/perspectives

as much as you find the clowns who sometimes seem to be throwing darts while blindfolded. It's really something that comes with time.

One tip is to keep the # of people you follow SMALL. There's nothing worse than seeing hundreds of ideas & scrambling to sort through the noise.

Find the ones you trust & slowly trim your list down. As always:
*LEARN to do your own RESEARCH
*Don't rely on WORDS or past trades (screenshots of P/L & bragging on past "calls" is simply marketing material)
*Follow & analyze (slowly weed out the ones you're not a fan of)

And finally, I'll leave with this "quote" that I thought of & remind others:

"Nobody cares about your own $$ more than you. Why take someone's word that it's in YOUR best interest?"

Nothing worse than lacking responsibility/accountability on FinTwit, you'll get eaten alive.

4/7: MARKET TAPE AWARENESS

I feel like this is something that ALL newer folks should be reminded - judging off the content I'm seeing throughout FinTwit.

Firstly, and most importantly, the UNREAL bull market that COVID lockdowns, new interest in the markets, stimulus $ gave to

us is OVER & it has been over. After action the last week or so, volume has slowly dried up & gone MIA compared to the 10-11 months prior. With that being said, here's some important things to note:

The tactics/strategies that worked throughout last year are HIGHLY unlikely to

work when we have a tape like we do now. That includes:

*BTFD (Buy The F*cking Dip) - in this tape, those dips aren't dips anymore, almost always a larger pullback & you're starting to see this more and more (CAUTION taking advice of those who are still pushing this idea)

*Overnight gappers - a fave tactic for the pumpers out there.. these were stupidly common & it did seem at times that all stocks simply did go up overnight. Nowadays those "gappers" are either no gap at all or actually a gap-down if anything

*Comparing moves from last year to..

our current tape & believing that is fair valuation - this is something I'm seeing more of lately.. pumpers love to say "back to price it was in Sept/Dec/Jan.." It's quite laughable & a pump fave right now. Those levels likely won't be reached on most names w/o proper catalysts

and the names that have seen large haircuts since middle of February have fallen off for that reason - stupid high valuations from the bull market.

It sucks, as simple as that. Those were some fun times & likely won't be seen again for a LONG time - it was the perfect storm imo

The point of this is forget about what USED to work & focus on what is working NOW. The strats/ideas mentioned above worked when everything was actually going up, but as you're starting to see now aren't "built to last"

Lastly, you're really starting to see the true colors

of many on here. Those who are still pushing multiple ideas & calling buys on days where it seems everything is red or stuck in the mud are the ones you need to watch out for. GREED is starting to take over as the profits are much harder to come by. Any morals go out the window.

The majority of this thread consists of UNPOPULAR opinion. As I've stated many times, being a realist isn't something folks enjoy hearing. The peddling of #hopium is what sells & always has. If this tape persists, you'll start to notice this more & more.

All said, caution needs to be taken until there's more confidence and overall QUALITY of ideas. FinTwit has become inundated with schemes fueled by greed.

I'm cautiously optimistic the #hopium epidemic will slowly die off. Now's not the time for risk, but the time to LEARN imo

4/8 - WATCHLISTS/TAKING NOTES:

This is another one that might not be very appealing & skipping this relatively simple step is cheating yourself imo..

As I've stated earlier, I was a blindfolded sheep simply listening to or following accounts on Twitter for plays. Sure this

method works sometimes, but ultimately it will rarely provide any opportunity for individual growth as an investor/trader. I'll touch on how I go about organizing my watchlist(s) & how it will only benefit you by doing so..

Firstly, when I finally started to take things serious

& started creating my own watchlist (WL), I had just ONE. One massive list of stocks that was nearly impossible to stay up to date on. Don't be me, it gets confusing. I want to emphasis having a STRUCTURE behind your watchlists and being sure to regularly maintain/update them as

well. My structure is likely much more OCD-based than others, but it's what works for me. I have over 20 different WL that I try to maintain on a weekly basis (of course the more relevant ones/WL I use everyday I do nightly). My structure is very specific & you don't need to go

nearly as in depth to see more clarity in your trading. I break down my WL in 3 main ways (sometimes further depending on their relevancy/how often those companies are seeing movement or chatter):

*SECTOR/INDUSTRY
*SHARE STRUCTURE (almost always low float)
*COUNTRY

I'll add a golden nugget WL at the end that has made me some decent coin this past week ;)

For example, these are the titles of some of my WL - self admittedly, I'm biased towards trading China names when they are moving b/c they're likely responsible for about 75% of my gains

TODAY - where I have a list of 10-15 names that I see relevant for that specific day (update throughout each day & nightly)

*CHINA EDUCATION - self explanatory
*NFT
*SPECULATIVE NFT
*CHINA LOW FLOAT
*SHORT SQUEEZE CANDIDATES
*KUSH (cannabis for the boomers)
*USA LOW FLOAT

...

*VOLUME WATCH (low vol plays that move when it shows up)
*BITCOIN

There's many more, but being so specific has helped me tremendously. If I see that China low floats are starting to get picked up, flip to WL & boom all of them are there in front of me & I can see movement..

Many of these runners will ignite at least SOME movement in their "sympathy" plays & having them in one place is $$.

Now for the golden nugget & I HIGHLY suggest creating a similar list yourselves, it's been another money printer this week. It's kindly titled, "PUMP WATCH" :)

Just like it sounds & you'll soon realize the well followed accounts/influencers continue going back to names they have played in the past (we all do it).

HOW TO USE IT: learn what frontloading is (IMPORTANT) and what it looks like... being able to have a WL (I have many)

and watching their volume (there's additional tools to help scan for volume spikes) can help key you in to which names will likely be pumped in the near future (usually within 10 mins) and you can SCALE in along with said influencer (takes practice) before they send to the crowd!

This is NOT always going to be effective as sometimes there's random volume spikes unattached to market influencers/trading groups, but when you're in before the masses, you can mint some serious coin.

Admittedly, I only like to do this on boring days b/c I avoid crowded trades

for the most part, but with practice & consistently updating the WL(s), can be a money printer when you spot the right one.

Again, no need to be as specific/numerous when creating WL's, but having them & keeping up to date will only increase odds of profitable trading. Cheers 🍻

4/27 - COLLECTED THOUGHTS:

Not going to stick to a given topic, but want to share what I think most newbies should know:

1) Algos - control 70-80% of the market volume/market-making. Common misconception spread by others: they can be turned on/off. Simply not true lol..

2) Get acquainted with the market/learn how the mkt moves before taking sizable positions. You'd be surprised how much knowledge/education comes from simply SEEING all different types of scenarios. Take note of what you don't understand & educate yourself outside of market hours.

3) BE SELECTIVE - Not only in the positions that you take, but also who you trust to help fill in the education gaps that are sure to come along. Overtrading (constant buying/selling) is one of the eventual downfalls for many new traders. Focus on QUALITY couple with PATIENCE.

4) TRUST - Everyone is here to make money. Nobody is going to forego that objective in order to "help you out." I recommend a trial & error method to finding those who are trustworthy. Eventually everyone will show their true colors. Be skeptical on your search in finding them.

5) FOCUS ON YOU - Comparing yourself to others will only slow down your growth. Find what works for YOU & what you excel at. Take note of what setups/strategies are profitable for you & stick to it.

6) PATIENCE - The whole "get rich quick" idea gets sold far too often on all discussion platforms. This will lead to aggressive risk-taking & eventually find you out of capital to be trading with. Many have tried this strategy & VERY few have gotten lucky enough to tell the tale.

7) BE INQUISITIVE - Ask questions or do some independent research (most trustworthy b/c it's coming from YOU) when you don't understand something or a certain concept. There's no such thing as having too much knowledge of the markets & ways to capitalize from that knowledge.

As always, my messages are always open. I'm pretty thorough & no bullshit when it comes to answering questions. If idk the answer, I'll direct you to someone else or a website that helps. Hopefully this helps some & I look forward to finding some gains along the way. Cheers 🍻