Something is Amiss Here or (Why New Traders get Slaughtered in the Stock Market)

Something is Amiss Here or (Why New Traders get Slaughtered in the Stock Market).  This article fully discusses why this happens.

In my home, Stock Market Pilipinas (www.stockmarketpilipinas.com) the following is a MUST-READ for new members.

SMP Must Read 1

SMP Must Read 5
NOTE:

The above is just an excerpt.  To see the complete post please visit: http://www.stockmarketpilipinas.com/thread-563.html

Of course, just like other forums and groups, we also have HYPERS and BASHERS  so  you will also see posts like this:

Newbie Post_SMP

Please let me translate this into English for my non-Filipino readers:

“LOL … It’s really funny when you see posts like that. Why did you buy?  Because I was told by so-and-so ….. However, who was the one who pressed the buy/sell button?

I think the brokers also missed something here.  When I opened my account with COL, I submitted my application to them in the afternoon.  The only question asked by the person who processed my application was, “Where did I learn about COL? Then she/he said that she/he will check if my application has been approved.  After a moment, she/he  submitted my application form for approval and then she/he gave back the approved application to me with the account number.  My account is ready to be funded.  The following day, I transferred some funds to the account and the same day it was already activated.

Not even once was I asked if I already have a background on the ins and outs of stock trading or whether I have attended a seminar about stocks.

I think they should make it a requirement that you should have first attended a seminar on stock trading before they approve your application form so that new investors will be aware …..

Sorry if off topic.” (my translation is based on context not verbatim).

What is amiss here is the gap in expectations by by both parties.   The new trader or investor is over-eager to open an account in order to be able to trade immediately.  This usually happens to majority of stock investors/traders because they are told by their  friends  that it is very easy to make money in the stock market.  On the other hand, the brokers are assuming that the new investor/trader has sufficent knowledge about stock investing/trading that is why he is opening an account.

The new investor/trader without proper guidance usually joins forums and  groups in order to secure tips from experts and gurus.  It is good if they are able to find someone who would not take advantage of them.  More often that not, they fall into the hands of the experts/gurus  who have posted beautiful charts in forums and  groups extolling the potentials of a certain stock that they have already accumulated beforehand.  Just like in the above charts the new trader is impressed by the price action suddenly going up not aware that price action had been manipulated by stock market jockeys and operators probably in cahoots with the expert or guru.  The new trader is given false security by a lot of  HYPING from forum and group members:  This stock is going to the stars.  It is going to gain _________.  The company has new technology and  going to tie up with __________ so on and so forth.  The new trader blinded by irrational exuberance decides to GO ALL IN.  NO GUTS, NO GLORY  as the HYPE goes.  The usual result —  the new trader’s trading capital gets burned.  I know a lot of new traders who had this traumatic experience and decided never to enter the market again. They say in Filipino:  “Isinusumpa ko na yang stock market na iyan.  Hinding-hindi na ako papasok sa trading sa tanang buhay ko”.  Translation:  I hate the stock market.  I will never do trading again for the rest of my life.

When new traders come to me for advice, I am quite stern.  I usually tell them that “If you have to ask anybody what to do after you have entered a trade,  inspite of all the knowledge you have acquired and all the tips you have received, you are not ready to trade.  I want to equip new traders with the necessary knowledge not just give  one advice on one particular stock.  As it is often said, Give a man a fish and you feed him for a day.  Teach a man to fish and you enable him to feed himself for a lifetime.  Along this line,  I have prepared in accordance with the Continuous Learning element of  Responsible Trading, trading lessons that I will soon be posting on this Blog.

Please be aware though that the lessons are offered  to give the new trader basic knowledge and not intended as a substitute of the seminars conducted by their brokers.  In fairness to COL, they have very good seminars that for me is a must for new traders to attend.

In the trading lessons that I will be sharing, I will be making reference to videos I have already posted in Stock Market Pilipinas.

I will post the lessons here by giving an outline the learning objectives and then you have to click the link provided to view the video. I suggest you do some personal research on your own on the topic/video so that you will have a better understanding of the materials shared.  Before I post the next trading lesson,  I will summarize the previous weeks lesson and post it here.   My posts here  will be the latest version of the notes I have posted in Stock Market Pilipinas.

I suggest you visit Stock Market Pilipinas (www.stockmarketpilipinas.com) and if you like what you see and decide to become a member just indicate me, Ninjatrader919 as the person who made the referral to them by clicking on this link:

To refer a member to this board, direct them to http://www.stockmarketpilipinas.com/member.php?action=register&referrer=1472

Thank you and enjoy your journey to becoming a Responsible Trader.

 

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