Everybody's getting into trading

I just saw a Youtube ad of some housewife talking about "her trading system" and her students were making "an income" of $1000-$5000 per month using her easy system.  To make matters worse, yesterday I learned that our very capable home repair contractor in the Bahamas (who did our roof repairs, ceiling refurbish, stucco repairs, etc.) is now "learning" Forex Trading.

Shades of Joe Kennedy's shoe shine boy.

I've been trading for decades and I know a thing or two about it.  Let me tell you some basics:

1) You cannot "learn" Forex trading.  You are either born with the gift or you are not.  IF you don't have the gift then you are simply a source of income for the sharks that do.  I will bet money that my contractor ends up in tears over this.

2) Day trading is not "an income source".  If you want income, get a job.  If you want to gamble, trade the markets.  90% of those who trade end up losing it all.

3) Those who trade by emotion are the easiest Marks and Patsies to fleece.  Check your emotion and especially your ego at the door.  When you begin to feel invincible you are about to get screwed.

4) The most important observations are usually shouted down by news that doesn't matter or is actually detrimental to trade.

5) The market heads in a direction until it changes and then without any seeming memory of what transpired just the day before, they change character completely.   Stair steps up until elevator down.

6) Being long the markets does not make you virtuous and being short does not make you evil.  So many people think that unless stocks are going up something is wrong.  That's like saying you only like it when the tide comes in and you hate it and think its bad when the tide goes out.  But do you know what they call it when the tide comes in, comes in comes in and won't stop coming in?  A Tsunami.  The smart money knows how to go long and how to short and the limitations of each.

7) Like casino chips, stocks only have value in the wall st casino.  If you see someone shutting your favorite casino down you better run down there and exchange any casino chips you have in your possession for currency of one less degree of abstraction because when they close the casino your chips will be worthless or nearly so.

8) Markets are a zero sum game.  For every winner there is a loser.  More to the point, not everyone can win.  What cannot happen will not happen.   And Wall St will get a cut of everything or they will shut their markets down.  They are not in it for charity.  See item 7.

Markets are now to the point where people think they are guaranteed to go up.  And while we still see some pullbacks ahead, the S+P 500 probably has further to go up before the trap door opens.  But the trap door will open at some point and most people will get flushed.

It's too late for newbies to make money in these markets but it's certainly not too soon to lose everything you have in them.