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The Squid Game Shows Why Most People Don’t Make Money TradingSquid game is the hottest series on Netflix ($NFLX) right now, in which 456 players join a game of death, where they have a chance to win 456 Billion Korean Won (KRW), or 38.5 Milllion US Dollars. What’s interesting about this series is that it depicts human sentiment in a very realistic way. We could see how market participants think and act by looking at the participants of the squid game. A random guy appears at the subway station, and offers to play card flip, where he’d slap the player if he wins, and pay $100 if he loses. He actually ends up paying the players, stimulating their curiosity. Later, players are taken to a remote island where they have no clue what game they’re playing, with hopes of potentially winning life-changing money. Beginners Luck turns to Attribution Bias People who join the stock market are not different. They don’t know what game they’re playing, and what rules there are. Just as the subway guy invokes curiosity from the players by paying them small amounts of actual money, people are dragged into the stock market through stories of their friends and acquaintances making life-changing money by trading. You try to remember the name of the stock or cryptocurrency your friend mentioned, and buy it without doing any due dilligence. You participate in the game of the market with 0 understanding of the game and rules. When the stock/crypto you bought goes up (by chance), you fall into the trap of beginner’s luck. Beginner’s luck refers to a phenomenon or situation in which a beginner experiences a disproportionate ferquency of success against even experts in a certain field or activity. It’s often used in gambling and sports. But beginner’s luck leads to overconfidence and attribution bias. Overconfidence refers to one’s excessive trust in his decisions based on gut-feeling and his cognitive abilities. This often leads to overtrading, and the market participant ends up paying excessive trading fees. Overconfident traders also tend to neglect statistics, and put all their eggs in one basket. They hardly listen to other people, and tend to choose the stocks/crypto they invest in themselves. Attribution bias, or cognitive bias, is when people find reasons for their own and others’ behaviors. So when they’re in profit, they think that it’s all thanks to their amazing prediction. When they’re at a loss, it’s because the market was in an unfavorable situation, or simply because they were unlucky. Essentially, they constantly come up with excuses for every situation. We all know Isaac Newton as a genius physicist, but he was a failure as an investor. He made the wrong investment decision when he invested in South Sea stocks, which led him to lose 20,000 pounds (about $4M today). He lost most of his life savings and famously said that “you can calculate the motions of heavenly stars, but not the madness of people” - a classic example of someone with attribution bias. Mob Psychology and the Bandwagon Effect This is accurately reflected in Squid Game. When players play ‘Red Light Green Light’, they are shocked to see other players get massacred. After the game is over, they later vote whether they want to continue playing the game or not. The surviving players fall into the trap of overconfidence and attribution bias. Only 1 person out or 456 will survive and win the prize money. Statistically, every player has a 0.22% chance of survival. While this is statistically low, they’re taken away by the pile of cash hanging from the ceiling, and start believing that they’re special, and that they can win. Lotteries and gambling work in the same way, in which people bet on a probable case that is close to impossible. Sadly, most people approach trading like gambling. In Squid Game, right before they play tug of war, a riot breaks out, and players are split into different factions. So when they’re told to team up for tug of war, teams are formed based on the factions that were formed the day before. This shows us mob psychology and the bandwagon effect. Mob psychology, or mob mentaility, is when people follow the actions and behaviors of their peers when in large groups. The bandwagon effect falls within the scope of mob mentaility, and is a phenomenon in which people do something primarily because others are doing it , regardless of their own beliefs. The same psychological phenomena can be applied to investors and traders in the market. Instead of trading based on their own trading rules, strategies, and analyses, they simply follow the actions of other market participants. These are the people who end up panic buying or selling, and falling victim to pump and dump schemes. Conclusion These psychological phenomena prevents us from making the right decisions in the market, and making the wrong decisions indicates that we lose money. Just like how most people in the Squid Game end up dying, there are many other people who entered the market with dreams of becoming a millionaire, only to lose everything. But unlike the Squid Game, the financial markets isn’t a winner-takes-all. If you can understand the characteristics and rules of each market, and do your due diligence on different ways to beat the market, you can have a statistical edge. As a trader, I would say that technical knowledge accounts to less than 5% of what it takes to be successful. It’s more about understanding your cognitive bias and controlling your emotions and psychological state. If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
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NASDAQ:NFLXEducation
by Michael_Wang_Official
262
How I've traded Netflix this year. Morning traders. I just wanted to share how I've traded Netflix this year with the script I am using and the results I've gotten. Traded netflix only on an account with a well known CFD provider. £200 deposited and 76% gains on investments since March risking 1% per trade. This information is all provided by the back test data screen shot at bottom of the screen. As you will see from the idea screen I have provided details of how the script prompts me when to enter the market. I simply enter the market set my stop loss and take profit targets and let the trade play out. That easy! All the back test data backs the strategy up and takes away all the emotion of trading. Something we all struggle with as traders. Once the trade has played out I simply wait for the next signal alert and go again. This particular example is working the H1 and the example is taken from back in June and July. Currently I am in a live long position on this chart as we speak. So we will see how that plays out. For any more information on the script I am using please message me.
NASDAQ:NFLXEducation
by RichScott
The 5 Biggest Trading MistakesSo let’s talk about the five biggest trading mistakes that cause traders to lose money. And one of them is the account killer that I’m saving for last. When you are trading, you need to have a trading strategy. You already know this, this is nothing new. The 3 Key Elements To Every Trading Strategy There are three key elements to every single trading strategy. What to trade First of all, a trading strategy tells you what to trade, right? I mean, what stock or what options should you trade? What expiration? What strike price? So this is very important. And as you know, I’m using my software PowerX Optimizer to find the best stocks and options to trade. When to enter Number two, a trading strategy, whatever trading strategy it is, has to tell you exactly when to enter. When exactly should you buy or sell an instrument? Whether it is a stock or an option, it doesn’t really matter. When to exit Now, element number three is when to exit. Super important here and when we talk about exiting, there’s two ways to exit, right? So we can either exit with a profit and if this happens, then yay, this is good, right? Or losses are part of our business as a trader. So sometimes we have to exit with a loss. And of course, nobody likes it, but it’s part of trading. So the key here is that you have to keep your losses small, right? Anyhow, this is just a brief recap. These are the three major elements that every good trading strategy needs. So let’s talk about the five biggest trading mistakes, especially considering that these are the things. Trading Mistake #5 Trading mistake number five is trading the wrong stock or option. What do I mean by this? Trading the wrong stock or option means that you picked a stock and it is just diddling around while everything is taking off, right? It happens. And this is where often I see that many traders are picking stocks based on news, right? They hear, for example, “Tesla is making new all time highs.” “Amazon is making new all time highs.” Netflix, or Nio, the Tesla of China, right? And then they’re jumping in and realize, “Oh, this is not going anywhere,” or it is going down. So trading mistake number five, trading the wrong stock or option. Trading Mistake #4 The next trading mistake is entering too early. Has this ever happened to you that you were kind of right about the stock, but you entered way too early? Let me give you a very specific example. Because right now, as we are still in this pandemic, the airlines have been one of the industries hit the hardest. So you might say at this point, “Yeah, you know what? This is a good point to enter because airlines will go up again. People will travel again.” Right? And so you might enter there or you might actually say, “Oh, this didn’t work. Let’s enter here as there at $10.” Then they do in fact move up and you think, “Yay, I timed right.” But then it’s again coming down. Has this ever happened to you that you entered a trade way too early before you should have happened it? Now, especially if you are a PowerX Optimizer user, you know that with PowerX Optimizer and the PowerX Strategy you need to wait until it goes above a certain level. Has it ever happened to you that you jumped into a trade before it actually went to the level? Probably, yes. Trading Mistake #3 Let’s talk about trading mistake number three, and this is entering too late. Let’s use Netflix for example. When do most people enter Netflix? Traders like you and I, we are way smarter, right? But many are entering it when it says, oh, it’s going through a key level, like $500. And they say, “Oh, my gosh. Netflix is going above $500. I need to buy it right now.” And what happens after it went through a key level? It comes down again. Also, often when stocks make a new all time high, this is when many traders are getting interested in this. Might not happen to you, but, hey, based on what I see of why people are losing money, is because they’re entering too late after a move has already taken place. Trading Mistake #2 Let’s talk about trading mistake number two. And again, all of this is connected to your trading strategy, because when you have a trading strategy, you have just these three major elements here. So another trading mistake is taking profits too early. Has this ever happened to you that you got out of a trade too early? That you saw some profits and you were so excited, “Oh, my gosh, it was moving up.” And you took the money off the table and realized, “Oh, my gosh, I did it way too early!” and the stock just keeps going higher and higher and you would have made so much more money if you had stayed in. Let me just ask you, do any of these four trading mistakes resonate with you thus far? Just let me know in the comments if you made any of these four trading mistakes and then I’m going to tell you the number one mistake. The Trading Account Killer This here, this mistake is the trading account killer. What is it? What is the number one trading mistake that kills accounts? It’s not getting out of losing trades. Here’s the deal. This is why it is so important. You’ve got to know that this is what will kill your account. Can the other mistakes kill your account? Let’s talk about the other trading mistakes. Trading the wrong stock What happens when you’re trading the wrong stock? This could be a technical error. For example, I wanted to enter AAL and I accidentally typed in ALL. So it could be technical, or you just made a wrong choice, you traded the wrong stock. But that is not killing your account. When you realize you made a technical mistake, you get out of this as quickly as possible. Entering too early Now entering too early. Does this kill your account? No. All that happens is that you’re missing out on some of the profits because you’re getting into a stock that is not yet moving. I like to trade according to the PowerX Strategy. I want to wait until I see that the stock made a move and then I’m jumping in while the move gets momentum. So this is why the PowerX strategy is called momentum trading. But anyhow, does this entering too early kill an account? No, it does not. Entering too late Now entering too late. This is a problem because this is where if you are entering close to the top, you might enter right before a stock turns around. Now, here’s the good news. As you know, when we’re talking about a trading strategy here, when to exit, I like to work with profit targets. So I know exactly when I’m taking profits before I even enter a trade. And in order to keep my losses small I work with stop losses. And a stop loss, I set at 2% of my account. So I never risk more than 2% of my account on any given trade. This means that if I have a $10,000 account, I would risk $200. If I had a $20,000 account, I would risk $400, making sense? OK. So as you can see, if you are entering too late and you see, “Oh my gosh, the stock turns around,” you just get out of here. Taking profits too early Now taking profits too early, can this shred your account into pieces? No, because keep this in mind, nobody ever got broke taking profits. Why is not getting out of losing trades the #1 trading mistake? Think about it. Has this ever happened to you? It happened to me in the beginning of my trading career. In the beginning of my trading career I was trading bonds and I was bullish on bonds. I was convinced that they were just going up forever. And they didn’t, they came back and I just had an opinion. I just thought, you know what? No, these bonds will keep going up. Have you ever had a stock like this where you entered, and after you entered, it approaches your stop loss, but as it approaches your stop loss, you take the stop loss out of the market and then it keeps going down. And the $200 loss turns into a $300, $400 loss, and then into a $1,000 loss, then a $2,000 loss. So what should have been a stop loss turns into a larger loss. This is what I’ve seen over and over that is killing accounts. Accounts are not getting killed because you’re trading the wrong stock or because you’re entering too early or too late. Accounts are not getting shredded into pieces because you are taking profits too early. But if you hold onto a losing trade for too long, this is the number one account killer. That is for sure, so keep this in mind. Trading mistakes will happen There are trading mistakes that will happen. These are the big five. Of course, there’s more trading mistakes. You could, for example, go long when you intended to go short, or accidentally buy 1,000 shares when you only wanted to buy 100 shares. It’s also possible to accidentally buy 10 options when you only wanted to buy one. Keep this in mind, this will help you, when you make a mistake, liquidate. What does this mean? As soon as you realize that you made a mistake don’t hope that the market turns around, don’t hope that it gets better. Get out of this. Even if you get out of this with a small loss, right? This is how your account stays alive. And yes, losses are part of our business. As a trader, you will experience losses. The key is really here to keep your losses small. Recently traders have experienced more losses than usual because the markets have just been whipsawing, they’ve been going around. And one of the biggest mistakes that you could make is saying, “I don’t want to exit the trade because I don’t want to have another losing trade.” Trust me on this one, if you don’t take a loss when it is small, you will have to take a loss when it is bigger. Yes, of course, every now and then you might get lucky and the stock turns around. But let me ask you, when you held onto a losing trade for too long, did it turn into a winning trade? Sometimes it does, more often than this, it does not. Summary So these are the five mistakes. And the number one thing that I want you to take from this is: Get out of a losing trade when you see that your stop loss is hit. Have a stop loss, keep your losses small, and cut your losses short. This way you stay alive and then can benefit from the large move that will happen in the market. I hope that you enjoyed this article. If you did, do me a favor and leave a comment below or share it with anyone who might need to hear this, who might have experienced a larger loss.
NYSE:AAEducation
by rockwelltrading
20
How to trade the Netflix bear flag post results Here we have a bear flag continuation pattern to the downside in play on Netflix ahead of results. Netflix can be extremely volatile when it posts after the closing bell today. The best trade set up here would be to look to buy the break of the bear flag below if it starts to retreat back into the bear flag. That's what us pro traders call a fakeout buy signal. Alternatively if the bear flag fails and prices rally above we might also consider going long. Even though we see a bear flag what we must really see is the very strong moving averages on the 1hr and 4hr charts. Any heavy selling of the bear flag would negate any longs. I'm not interested in shorting Netflix though while we are in Lockdown and everyone is watching TV lol. Nor when the Moving averages (particularly the daily and weekly) are so bullish..... Let the trend be your friend and look to buy dips as and when you can.
NASDAQ:NFLXEducation
by breakoutfakeout
The #1 Question... When To Buy & Sell! (BTC)To all existing students we want to say thank-you for enrolling with Major League Trader! 😁 We are always working on developing additional studies to add to your current curriculum and we think we may of found an additional method to make the current "Crossover Strategy" even more powerful! This will make the buy and sell opportunites even Easier to identify with less chop. We will be adding this study to your course shortly. Take a brief overlook of the chart of bitcoin above and notice how easy it is to find the major trend shifts. We hope you will enjoy this addition to your study guide. This will work with any market. See you soon! Happy Trading, MLT | Major League Trader
COINBASE:BTCUSDEducation
by UnknownUnicorn2319099
14
NETFLIX INC – Buyers and sellers at decision spot for continuatiWelcome to our Academy. We’re here to help you achieve what you have been looking for. Use our free analysis where you have everything you need for potencial trade ideas and profit. NETFLIX INC – Buyers and sellers at decision spot for continuation Trend: Strong Buy Support/Resistance: R3: 406.78 R2: 385.92 R1: 362.08 S1: 345.48 S2: 337.82 S3: 322.50 S4: 299.93 Price action: Netflix had already proved buyers trending and now is testing very first resistance area at 362.08 level. This level is important to us, because it will tell us how strong is bearish side. After breaking this level, price is headed to test second resistance at 385.92 level. This level might be very strong if buyers will not show strong bullish momentum between R1 and R2 levels. In case of strong momentum we can expect price to go even higher to 406.78 resistance level. On the other side, we recommend you to follow Bears behaviour. From this moment perspective we can say they are lack of momentum. In overall flow, we can say that good face off from Bears and Bulls is between R2 and R3 level. Potencial trade idea: Bulls targets: T1: 385.92 T2: 406.78 Bears targets: T1: 299.93 NOTE – We are trading NETFLIX INC via the preferred trading setups by EliteFxAcademy Disclaimer : Martin’s views on the Chart analysis is ment as a trading advice for education terms; Education terms include: trading consistency to everyone who is reading this blog; for every advance student and for every Elite student who is using this analysis for managing his equity by Elite strategy and custom indicator. This analysis is understandable and transparent for all Elite students. This is a free content which is based from Academy in term of transparency to support and following progress to everyone. We know that there is always possible way that market can pull you out even when you follow our analysis blog and advice for a trade. We don’t publish where you have to have your risk management – Stop Loss, because, it would not be fair to Elite members, who learned this techniques in our Elite course. Keywords: Elite strategy, Custom Indicator, Fundamental Analysis , Tehnical analysis, Price action, Advanced strategies, Trading Education Good trading! Elitefxacademy
NASDAQ:NFLXEducation
by EliteFxAcademy