I graduated college in 2009. Everything was shit that year. I decided to take a loan out and day trade. My nascent career of day trading did not last.
I'm not sure what tempted me into stocks, perhaps it was Jim Cramer's show. I really enjoyed the fact that for every show he seemed to know exactly what was happening to each stock. I guess it was this illusion of knowledge that intrigued me. After all money runs the World, and the World is run by Wall Street.
In hind sight, stocks were dirt cheap in 2009. Unfortunately, I was looking to get rich fast. Right off the bat I bought a few stocks that were listed on some major exchanges. The stocks languished in a range for a few days; it did not move like on Cramer's shows. I sold everything for a small lost.
A bit frustrated and still searching for the holy grail that would take me to the promise land, and take me there fast, I dove head first into Penny Stocks. Boy, was this an exciting ride up. Boy, was it a dramatic fall down.
I still remember that summer morning when one my "lotto" plays came to life. I bought around 13 million shares of this "company" listed on the OTC exchange. The share structure was something absurd, I think 2 billion worth .0005-7 per share. At this stage I was excited to get up every morning to check if any news had dropped or if the stock had moved the slightest. As you can imagine every .0001+ up I gained a few hundred dollars. This penny stock eventually went to .01+. I made over 100K on paper, but I didn't sell because I was young and greedy. As any good penny stock does, it tanked 25% in a day and when it bounced I sold everything for $70,000.
At this point, I was young, I was greedy, and now with an easy $70,000 I was cocky. The next few stocks I picked all went as planned. I was on a hot streak. $5k here, $3k there. I didn't know what a stop lost was, and I didn't know what a "long term" investor meant. These factors combined into a perfect storm that spelled financial Armageddon for my brief penny stock career.
I used half my earnings and went "all-in" on this other penny stock. At first, it went up a little. A little meaning $2-3K. At this point I was blinded by my gains in the $70K trade. I only considered taking big gains. I didn't know the value of profit or scaling out, now I do. I held this stock all the way down from .004 to .0004. I didn't know what a stop loss was, now I do. It's actually free. I figured this stock would bounce back just like every other stock. This stock never went up past .0007. It was a total lost.
So with my remaining capital, I went super conservative. However, one day I reminded myself that I got that money by taking risks in the first place. Don't let fear take over, because fear keeps you back.
One sunny day, on the Vegas strip, I went all in, again. This time, I knew that I should take profits. I knew to set a stop loss. However, I also knew that if this stock went up 50%, I would make a lot of money. It had the potential to bring me back to that summer of 2009 where one trade made me $70K.
The CEO was all over social media hyping this stock up. This is the Pump. Every penny trader understands that for a penny stock to rise from the ashes, it needs News, low stock structure, and a good Pump. One thing that nobody knew was that the SEC was about to lay down their righteous hammer and suspend thousands of OTC stocks on one morning's work.
I woke up to a stock that was suspended from trading because of potential SEC violations. This is a death nail to any OTC stock. The issuer would have to find a MM willing to put their name on the line and refile a form 211 on their behalf. This takes money, time, and frankly balls to sponsor a penny stock to FINRA. In other words, every investor in these penny stocks that got that SEC hammer lost 100% of their investment that day. I did not know that this can happen. I did not know the golden rule that you only invest the amount of money you can afford to lose. Now I know.
So here I am, about to take another dive into Day Trading. I don't know why I keep coming back. It could be because I'm addicted. Perhaps its the rush, the speed, and the allure of being right. But really I feel in my gut there is a bigger need, as if the system is suffocating enough at this point for me to break out of my daily norms. I don't want to slave away for someone else the rest of my life. Even if I do, there is no way I can retire comfortably. No way I can afford to raise children or get married. Wages are stagnant while inflation is through the roof: healthcare, rent, groceries, gas. Yet, the FED is inflating the worth of the dollar, that I'm slaving for, away everyday by warming up the printing press and giving tax cuts to the rich.
I'm trying to take the Red Pill. I'm trying to take the Red Pill at all costs. To do this I need to become my own central bank.