@empath,
Day trading, derivatives trading, etc., is gambling.
In gambling, the house always wins (over the long-term). In this case, the house is Wall St.
Wall Street banks make lots of money. Do you know where they make that money from? They do not make it from thin air.
Where Wall Street makes its money from is the Average Joe day traders, derivative traders, etc.
Over the long-term, Wall Street, with its quants, "illegal" insider knowledge (that just usually does not get found out), ability to use massive leverage to move markets and time flash crashes and bubbles, super fast exchange connections, etc., out-moves and out-foxes the Average Joes thinking they have an edge because they read XYZ secret newsletter or watched ABC YouTube video or came up with DEF trading strategy.
You can think of trading as basically a very nice way for you to help keep Wall Street banks in the black. It is a very kindly way, because you know many Wall Street traders need to eat too, and unless Average Joes lose money buying high and selling low how could Wall Street make any money?
Every time you think about trading, you should think to yourself, "Today I want to be really nice and donate some of my money to Wall Street."
If you actually want to
make money,
read some books on investing.
Preferably by men who are self-made billionaires. Warren Buffet, Ray Dalio, etc.
Warren Buffet's thing, for instance, is he never invests in any company he does not know inside and out. He needs to be 100% certain it is undervalued and is likely to go up in value for a long time, regardless what happens over the short run in markets. He does not look at the stock ticker because it would just distract and flummox him. He is a
researcher.
Also, I will say:
- Everyone I know who follows the "buy and hold assets you know well" strategy has made lots of money
- Everyone I know who follows the "trade quickly, aiming to try the market and win big fast" strategy has lost tons of money (usually they start out like you do, playing it a bit safer and more or less breaking even, but then they eventually go big, bet the farm, and lose it)
You can think of short-term trading as a way to just give your money away.
You need to operate from a longer time horizon.
Here is a tale of three friends I know (true story):
- Friend A invested $N into an investment, after researching that investment heavily, then left it there and did not touch it for many years. He became quite wealthy.
- Friend B invested $X into the same investment later on. However, he did not research it heavily; instead he was going off of media reports and hype. When that investment dipped, he lost his nerve and sold it all at a significant loss.
- Friend C invested $Q into the same investment later still, also after researching it heavily, like Friend A. He also left his money there and did not touch it for many years, like Friend A. He also got reasonably wealthy, though not as wealthy as Friend A, despite investing more money than Friend A, because he got in later.
Friend A and Friend C do not have to work anymore. Friend B is working a job he dislikes, despite investing into the same investment after Friend A yet before Friend C. The reason Friends A and C don't have to work but Friend B does is because Friend B was doing a bunch of trading, trying to time the market, following hype, and lost his money to Wall Street; meanwhile Friends A and C bought only after heavy research, then held and did not sell.
(The funny thing is, Friends A and C actually did much less work than Friend B; Friend B was constantly following tickers, trying to time markets, buy, sell, conduct technical analysis, change positions from one investment to another then back again, etc. Friends A and C just carefully studied an investment they liked, then once they became convinced it was a good long-term investment put their money into it, forgot all about it, and let Father Time do his thing.)
Chase
