It is just too boring to buy an index fund even if it has proven to make you rich as long as you hold onto it.
In the world of smart phones and the internet, no one have any patience any to wait for anything to happen.
In fact many people would rather lose money and go out in a blast rather than accumulate wealth and live a mundane life.
Times have really changed.
Trading frequently looks even more attractive when gurus show you charts that show stocks that hover around the same price over a period of time.
But within the period, buying low and selling high amid the volatility will make you rich.
It seems so easy… especially when you have you can determine the right timing AFTER whatever has happened. Maybe that’s what makes a guru…
Let’s admit it. You are not the average investor. Everyone thinks so of themselves.
So you are not going to dump your savings on index funds that give you an average return in many years to come. You won’t be getting ahead of other investors this way.
What’s the point in investing when you are not going to get richer compared to others.
You are savvy and you will trade each day online and live the $1000/day lifestyle from your bedroom.
Now the only thing you need is a broker and some breakthrough software that predicts the market with as much certainty as where the sun will rise tomorrow.
In fact, some window popped up on your computer last night showing a video of a trading prodigy wanting to share his secret custom-made software with you for just $97. It must be the bargain of the century.
And that my friend, is how shovels are sold to gold miners. And the shovel in this case come from software.
Top secret binary trading software have made billions of dollars in profits for the average man and now you have a shot at it. Because apparently, these desktop billionaires have made their secrets available to you for a limited amount of time. They are motivated in sharing their discoveries with the world. It is not their goal to make a measly $97 from you. That is just the cost of maintaining the sophisticated algorithm that makes the software “cutting edge”.
And since you will be trading with the software, you might as well hook up with their brokers who make a cut from every transaction you make.
What? You want to trade frequently but don’t need the software hepped up with alien technology?
Then there is something else for you something more conventional. It comes in the form of mass media.
There’s nothing wrong with basing your investment decisions on markets news. But it only make sense for long term investments.
Because surely you know that news on television and newspapers are are already late news when it comes to trading equities?
And unless you are an insider, someone in the know, someone with reliable contacts on the trading floor, you are just picking up the scraps of the money being made in real time.
The bigger irony is that financial news channels often provide expert insight into stocks with professionals from big name brokerages.
Yes the people who generate their primary cash flow from trades. They have no direct interest in whether a share price jumps or falls. But still, they declare their buy-sell recommendations.
The more you trade the more commissions they deduct from your account. It’s a beautiful business.
And you don’t have to worry about the columnists in the magazines. They worked their socks off to get where they are.
Unlike political watchers and analysts who have never spent a day of their lives working in the civil service, equities writers know their stuff even though they don’t trade like you do.
It doesn’t matter that thousands of traders have already acted on their commentary. You are a step ahead of them as you are smarter.
You think financial journalists are full of B.S as well?
Don’t worry. You can still fall back on the natural hunch you have on where a stock is heading.
If you are a newbie, all the better. You have yet to use up your quota of beginner’s luck.
The best part is that you can probably feel where the market is heading from your gut.
You will answer your calling by making your stockbroker your new best friend.
Don’t worry about the rumored story you read about some loser who went into foreclosure for trading frequently. He does not understand margin trading and ETFs like you do. More tellingly, he did not come through the school of hard knocks like you did by reading a famous book. You have the midas touch.
If you lose your shirt, no problem.
The self-help guru who made you spend $500 on a full-day seminar have advocated making mistakes so that you can learn from it.
How else are you going to learn?
Who really gets rich?
I have never known someone personally who made a fortune purely from trading frequently.
There are wealthy people who are holding onto stocks. But you can hardly call them traders of any sort.
And most people who do claim to getting rich through active trading have other types of leverages they do not talk about. For example, a rich daddy, contacts with credible inside sources, etc.
If you are being told to short or long a stock, it is most probably the informer already has a similar position on it. You will just be rallying his long positions and pressing down on his shorts.
These are the people who are really banking it.
The other set of professionals who humble you with their wealth are stockbrokers. They profit no matter where the market heads.
In fact, the more panic there is, the more trades there will be. He was probably speaking to you in his Ferrari in the last call.
The obvious conclusion now is that if you want to get rich from trading frequently, you should either declare yourself as a guru and sell workshops, or send your resume to the nearest brokering house. Good luck.