"The Death of the Retail Trader"
What is that, why is it dying, and how can you avoid it?
That's what we are breaking down in this episode.
Listen below.
You can also listen on Spotify, ApplePodcasts and Stitcher
Retail Traders
A "retail trader" is an average trader, not someone who has millions of dollars or manages hedge funds.
He/she is someone who has a regular job and has a few grand in the market, and they are just trying to make a buck.
But I have noticed recently that the retail trader isn't making it... why?
1. People don't know what to do when the market doesn't just always go up
Pandemic hit and so did the market.. but then it rallied BIG
A big, huge sell-off hit when the pandemic did in March, 2020.
But then something amazing happened... the stock market rallied (as it always does).
This attracted the "retail trader" because now was a great time to get in.
And here's the thing: it was actually very hard to "lose" in a beast-mode up-trending market.
Everyone thought they were market geniuses, because all the market ever really did was go up.
People did not actually know what they were doing or had strategy, they were blindly buying things.
But...
The stock market doesn't always go up.
These past few weeks (the end of 2021 and beginning of 2022), the market pulled back and dipped.
So MANY traders started panicking.
Because the market no longer was going up and they had no idea what to do.
Which is why in Power Trades University, we teach strategies that can help you survive and even thrive in ANY type of market (sideways, up, or even down).
But the average "retail trader" doesn't know how to use these strategies because perhaps they didn't get the education.
2. People blindly follow "The Social Media Trader"
Now, more than ever before, we are seeing people trade in the stock market on social media.
Which is great this culture is happening and the stock market is becoming more prevalent...
But what's happening is sometimes the average social media trader may or may not know what they're doing or if they do, they don't explain it.
For example, someone on social media could post "Hey I'm all in on Tesla today!" and not really explain why.
So then everyone gets in Tesla... and no one knows why they are buying it.
Then all of the sudden it starts to turn around and they're losing money and they don't know what to do.
That's why you need to know strategy.
In order to find good viable trades based on fundamental and technical research.
And then once you are in the trade, having valuable strategies that can protect it and know what to do if it starts turning against you.
Unfortunately, many people's first exposure to the stock market is by means of social media telling them what to trade.
(It doesn't have to be social media, it could be a free Facebook group or a free course, just anything that doesn't really teach you the WHY behind the trades or strategies)
And if they follow it and the trades don't work out for them, well now they think the market doesn't work or at least doesn't work for them.
3. People aren't thinking about "replacement value"
Oftentimes people get in the stock market with income from:
1. Tax refund
2. Stimulus check
3. From their job
If you blow your entire stimulus check or tax refund in the stock market, well then you need to wait until you get that same amount again.
So what happens is, people use this "extra" money without any knowledge and then they don't know how to grow it... so then it gets blown up in their account and then have no idea how to replace it.
For #1, your "replacement value" is an entire years worth of work and waiting until the tax refund comes back.
But now with earned income, you can have a way to generate better income.
If you live below your means, you can allocate a certain amount of money to trade per month.
So even if you lost one month's worth in the stock market, you could immediately replace it the next month.
The "replacement value" just became way better.
You think differently now. You have a monthly obligation to learn how to grow your account.
Now you learn the strategies you need... and you are even willing to PAY for a course or coaching because you know you will have consistent funds allocated to your account and helping it grow.
What YOU can do:
As a retail trader, you can avoid the above 3 Account Killers.
How?
1. Learn how to make money in the stock market in all 3 ways it moves: up, sideways, and yes even down
2. Don't blindly follow trading suggestions. Get around people whom you can ask questions and get educated responses from.
3. Think about ways to lower your "replacement value" by putting stock market education and money to grow your account in the budget.
If you need a place to learn these strategies and community of supporters to whom you can ask questions...
Consider joining us inside of Power Trades University.
We have courses, coaching, and community targeted to help you with just that.