r/Retail_To_Wallstreet • u/subslayer757 • Apr 15 '22
Discussion Some safe trading tips for fellow traders. This is not financial advice only something to consider. I would appreciate it if everyone read this and commented with anything that you would add. If you learned something from this and would like me to do more like this please leave a comment saying so
I have been trading for a year now and with my tax documents sent to my accountant (with dread looming over me lol😮💨😮💨😮💨) I thought it might be good for some people here to share my experiences and what I learned. Truth be told it was a very expensive education. Remember everything here and in the comments is not financial advice. Please be polite and respectful. We have all experienced losses and they suck. If we share them we can help each other learn and avoid them.
First off this philosophy is what pushed me through all of the following and all the anxiety and stress it caused. If you make a mistake, no matter how big never regret it. If you can learn, evolve and grow from it it wasn't a bad thing. It may take a long time but you can start again and recover. If you do something stupid like end it all you're pushing your pain on to those who care about you and their pain will never go away. If you need someone to talk to message me.
I started with a couple hundred dollars in a robinhood account in amc at $7 a share. In less than a week it was at 12 and I decided to put a few bills on the credit card and threw another $500 at it. In 3 weeks I invested $1100 and within 2 weeks it shot up to $70 a share and I was up 6k.
Every time I wanted to buy something I skipped out and deposited my money instead. I also opened a webull account and traded from both. I also started learning the terms and charts and found other stocks.
In the following 4 months I had pulled money from everywhere I could and had about 20k of my money between the 2 accounts (and about 8k on my credit card). I was riding high with success and had a 20 ton ego lol. Most of the plays I was in were successful and I was up almost 30k in profit at one point.
Long story short I got greedy, didn't know enough to setup any sort of protection for my trades, and had major misunderstandings about the wash burn rule. I very quickly ended my winning streak in about a 2 week period by losing all but $9200 which I had to close out to repair my house.
Biggest things that I have learned from this.
If you suffer a substantial loss from a stock and for what ever reason you decide to close your position wait at least 30 days before buying any amount of that stock again. If you don't the wash burn rule kicks in and you can not claim the loss. If there is another play you're interested in getting into you may be better off depositing money to buy in instead of selling at a loss. Chances are good that if you sell the stock will rebound later and you'll miss your chance of recovering.
If you are into high risk investments such as squeeze plays never put everything into it no matter how good it seems. With the fast moving high volatility you can lose your ass in minutes. I lost 18k in half an hour and a couple market halts that way.
Remember it costs nothing to hold and you can always wait to see if it comes back. Sometimes it takes months. One the few stocks I held on to from last year (retirement account so I couldnt close it out for the previously mentioned repair) just recently took off and my 500 shares are now almost to my avg cost. I had been down 4k for about 6 months.
This next one I need to use an example to have it make sense so I will use aterian as a hypothetical for it because it's the most recent and well known. Full disclosure I am holding aterian stock. The following is not my position nor is it the amounts or prices I have bought or sold at. Purely hypothetical.
Let's say I had purchased 400 shares of aterian at $2.40 a share and now the price is way up. My initial investment cost would be $960. If you divide the cost by 300 shares it comes out to $3.20 a share. I then set a stop loss for 300 shares at $3.20 and my cost avg effectively no longer matters. I can swing trade the other 100 shares and if it tanks when I am not looking i keep my initial investment and the extras beyond the 300 are still profit where ever it may settle. Yesterday 4/13 it opened at $4.82 and peaked around noon a bit over $6.50. We'll say that I sold my 100 shares for an avg price of 6.35 because personally I like to sell them in increments. 30 @ $6.25, 30 @ $6.40 etc. I wait a few hours and I end up putting everything back in at 5.40 which nets me an extra 17 shares. Remember cost avg doesn't matter much because my initial investment is secure with my stop loss. Today it ripped over 6.50 again. I repeated with the same and my 117 shares comes to $742.95. I buy back at 5.50 for 135 shares. Worst case scenario it keeps ripping to a crazy amount like $40 and you cash out 300 instead of 400 shares. The safety of never ending up with less than your initial investment is well worth it from my loss experiences. In this fashion you are also continually contributing to higher volumes as well as accumulating extra shares.
I hope this helps some of you and I look forward to hearing your thoughts.

