Did you know if you put fleas in a box with the lid on it they will will jump until they hit the top of the box, after enough time, you can remove the lid and no matter what they will not jump any higher. Same goes when herding sheep, talk about herd mentality.
The new trader tends to fall into similar traps. They have heard sell your losers quick and hold your winners, yet they hold their losers and sell their winners. They are told that one needs to learn how to invest first, yet most go in with no prior knowledge or game plan. They are told proper ways to invest, how to avoid bubbles and basic tax strategies yet they still admittedly and with confidence do the complete opposite. The new trader tends to be the sheep following the herd, buying at the top, selling at the bottom and listening to other people’s advice without doing their own homework.
You can be the sheep crawling toward the imaginary gate or the flea trapped in the lidless box or you can be a shark. We don't compete where we don't have an edge, if I suck at blackjack, I don't gamble (I suck), if I suck at basketball (I do) I am not going to play you for money. However you think BABA is a short at highs banging on resistance for the 5th time in 6 months and you’re looking to buy puts, we are going to take the other side and squeeze you out.
“I've never met a confident gambler, nor have I ever met a profitable one either.”
(Duuhhh nuhhh, duhhhh nuhhhh)
If you have made it this far, that means you have successfully read Getting Started and moved through our Getting Started Group Chat, you also should have read our What’s Next program and moved through that group chat as well. Now that we are nearing the end of lessons from Dumb Money, you are getting a few steps closer to being ready to put on your first trade. However you’re still not quite there yet. Let's finish the last lesson of this program and see what you have learned so far.
Do you have balls?
Throughout this program we have addressed the pitfalls of margin, leveraged ETNs, Odd Lot Theory, Tax Efficiency, Long Term Holdings as well as a few other topics. In the Group Chat share some of the major concepts that you admittedly were a sheep or a flea in at the beginning of this program and now are more of a shark. Maybe not a great white just yet, however at least a Bull Shark.