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Here's the appeal: I made 4x return in last 3 years "gambling" on stocks. That's far in excess of 8% return from "just passively investing for the long term".

by kjksf 6y ago

Here's the appeal: I made 4x return in last 3 years "gambling" on stocks. That's far in excess of 8% return from "just passively investing for the long term". BTW: I gambled on IBKR, not RobinHood (I have RH account but don't use it). I just don't get why RobinHood is so vilified for the crime of making a fast, usable app. I use IBKR but their website is just bad. A security theater that makes logging in slow. Sometimes it fails to log me in. Sometimes it fails to show my portfolio. Because, you know, it's only job no 1 of an investing site.

aggie 6y ago
It's not inherently bad to make it easy to trade, but they specifically target (among others) people who don't understand the risks they're taking. If you're a hardline believer in individual responsibility, there's nothing wrong with that. But by the same logic you could put cigarette vending machines on every corner.
mav3rick 6y ago
Some people always win at the casino. Keep it long enough and we"ll see if you have happy results.
Cthulhu_ 6y ago
You got lucky; your post is why people pick Robinhood and day trading over the long-term one. It's survivorship bias. For every success story like yours, there's at least one - probably more - that lost three-quarters of what they put in. If you're thinking of investing, apply the "strong beliefs weakly held" practice; you think you may get high returns, so look for examples to the contrary to challenge your own beliefs.
- mam2 6y ago
  It's not luck if you make consistent returns over 4 years. "gambling" is the term people use because they don't understand the stock market
  - ivanbakel 6y ago
    >It's not luck if you make consistent returns over 4 years. Sure, if your sampling was unbiased. But here, it's not - so that user might well have been lucky. How many people have failed to make those returns, or any kind of return? There's very obvious evidence that somebody can outperform the market, even to a massive degree. From what I know, there's very little evidence that a particular person can deliberately outperform the market - and daytraders, especially, cannot do so consistently.
  - magicnubs 6y ago
    It could easily still be luck if they bought Tesla or TECL 3 years ago and that is where their 4x return came from. Regardless, even if you have a strategy that works for now, that doesn't mean it will continue to work forever. Anyone investing that isn't an expert in a particular industry in which they trade is basically just guessing. Any insight they have will almost invariably already be priced in.
    - mam2 6y ago
      Ok but then your whole point is basically "things can change in life". It's true and it's a good thing to be risk adverse but it doesn't bring much to the discussion at the end of the day. The more interesting questions is "can you actually, consistently, make money if you are good and spend a lot of time analyzing the market. In other words "can you actually have an edge on the market". From what I've seen it's so but most people don't believe it.
      - mav3rick 6y ago
        Trading for regular people isn't supposed to be some thrill seeking sport. Millions of dollars are spent on wall street to get "an edge". You really think you can do better ?
        marketgod 6y ago
        This is the mentality that needs to be checked. All those people trade huge money they don't care about some tiny trader moving $100k per trade. So yes you can do better as you have less capital to invest.
- CuriouslyC 6y ago
  All investment profit is to some degree luck. As far as short term investment goes, the market obeys certain dynamics to a first order at any rate, and by being aware of those dynamics and making statistically sound bets you can pretty much be assured of doing better than a simple buy and hold. The people who lose their shirts don't use statistics, they buy when a stock is going up and sell when it's going down.
zigzaggy 6y ago
I’ve had a good experience with RH too. I started out small, learned about stocks first. I gradually started into options and learned some strategies there. Then I started learning about volatility and other derivatives. And of course I’ve learned all about ETFs etc. My first year was hard; and it was emotional. I was too excitable and got hooked a little. But I steered my way through it with a very small loss. I considered it the cost of my education. But I really started getting the hang of it my second year. I started swing trading and learning the mathematics and psychology of the market. I didn’t break the bank with profit but I did make a few % points. I’m in my 3rd year and I’m a decent hobby trader now. I’ve been consistently beating the market in my “spare time” (I have a full time job and a side hustle). I don’t really get too excited anymore. I’m very methodical and pretty u emotional. To be clear: my trading account is not my retirement and it’s not my savings. It’s “mad money” and I use the post-tax proceeds for vacation etc. But yeah, I’ve had a decent experience with RH, learned a lot, made a few $$$ and had a good time.
- zigzaggy 6y ago
  P.S. It’s not “luck” for a small time swing trader to make a little money. Its something you do every day, using math, psychology, and timing on companies carefully selected for their fundamentals. The market is a large, slow moving entity that constantly shows its hand. A small timer can make money. Will it scale? I don’t know. I’ve been steadily increasing my account so ask again in 5 years. Admittedly, there are days where it’s hard to see where things are going - especially high vol days. But when vol comes down and the market slowly heaves one way or the other, there are tickers that pretty much always go with the flow. Buy low, hold for the swing. Or short a bump and sell lower... it’s really not rocket science. Just don’t get greedy... hit your target a get out. The real question is: is it worth my time in terms of ROI? Frankly, no not yet. I am streamlining the work, semi automating thru alerts, triggers, and buy/sell presets. But my paycheck and my side hustle still pay better. However I’m on a slow trajectory right now and I’m curious where it’s going. Will I plateau? Yes probably. But I’m enjoying the ride.
  - dbancajas 6y ago
    Are you doing things like bankroll management? measuring your risk of ruin? Sharpe ratio? if you are not tracking how legit your upswing/downswing is then I think are doing a disservice to yourself.

by kjksf 6y ago

aggie 6y ago

It's not inherently bad to make it easy to trade, but they specifically target (among others) people who don't understand the risks they're taking. If you're a hardline believer in individual responsibility, there's nothing wrong with that. But by the same logic you could put cigarette vending machines on every corner.

mav3rick 6y ago

Some people always win at the casino. Keep it long enough and we"ll see if you have happy results.

Cthulhu_ 6y ago

You got lucky; your post is why people pick Robinhood and day trading over the long-term one. It's survivorship bias. For every success story like yours, there's at least one - probably more - that lost three-quarters of what they put in. If you're thinking of investing, apply the "strong beliefs weakly held" practice; you think you may get high returns, so look for examples to the contrary to challenge your own beliefs.

mam2 6y ago
It's not luck if you make consistent returns over 4 years. "gambling" is the term people use because they don't understand the stock market
- ivanbakel 6y ago
  >It's not luck if you make consistent returns over 4 years. Sure, if your sampling was unbiased. But here, it's not - so that user might well have been lucky. How many people have failed to make those returns, or any kind of return? There's very obvious evidence that somebody can outperform the market, even to a massive degree. From what I know, there's very little evidence that a particular person can deliberately outperform the market - and daytraders, especially, cannot do so consistently.
- magicnubs 6y ago
  It could easily still be luck if they bought Tesla or TECL 3 years ago and that is where their 4x return came from. Regardless, even if you have a strategy that works for now, that doesn't mean it will continue to work forever. Anyone investing that isn't an expert in a particular industry in which they trade is basically just guessing. Any insight they have will almost invariably already be priced in.
  - mam2 6y ago
    Ok but then your whole point is basically "things can change in life". It's true and it's a good thing to be risk adverse but it doesn't bring much to the discussion at the end of the day. The more interesting questions is "can you actually, consistently, make money if you are good and spend a lot of time analyzing the market. In other words "can you actually have an edge on the market". From what I've seen it's so but most people don't believe it.
    - mav3rick 6y ago
      Trading for regular people isn't supposed to be some thrill seeking sport. Millions of dollars are spent on wall street to get "an edge". You really think you can do better ?
      - marketgod 6y ago
        This is the mentality that needs to be checked. All those people trade huge money they don't care about some tiny trader moving $100k per trade. So yes you can do better as you have less capital to invest.
CuriouslyC 6y ago
All investment profit is to some degree luck. As far as short term investment goes, the market obeys certain dynamics to a first order at any rate, and by being aware of those dynamics and making statistically sound bets you can pretty much be assured of doing better than a simple buy and hold. The people who lose their shirts don't use statistics, they buy when a stock is going up and sell when it's going down.

zigzaggy 6y ago

I’ve had a good experience with RH too. I started out small, learned about stocks first. I gradually started into options and learned some strategies there. Then I started learning about volatility and other derivatives. And of course I’ve learned all about ETFs etc. My first year was hard; and it was emotional. I was too excitable and got hooked a little. But I steered my way through it with a very small loss. I considered it the cost of my education. But I really started getting the hang of it my second year. I started swing trading and learning the mathematics and psychology of the market. I didn’t break the bank with profit but I did make a few % points. I’m in my 3rd year and I’m a decent hobby trader now. I’ve been consistently beating the market in my “spare time” (I have a full time job and a side hustle). I don’t really get too excited anymore. I’m very methodical and pretty u emotional. To be clear: my trading account is not my retirement and it’s not my savings. It’s “mad money” and I use the post-tax proceeds for vacation etc. But yeah, I’ve had a decent experience with RH, learned a lot, made a few $$$ and had a good time.

zigzaggy 6y ago
P.S. It’s not “luck” for a small time swing trader to make a little money. Its something you do every day, using math, psychology, and timing on companies carefully selected for their fundamentals. The market is a large, slow moving entity that constantly shows its hand. A small timer can make money. Will it scale? I don’t know. I’ve been steadily increasing my account so ask again in 5 years. Admittedly, there are days where it’s hard to see where things are going - especially high vol days. But when vol comes down and the market slowly heaves one way or the other, there are tickers that pretty much always go with the flow. Buy low, hold for the swing. Or short a bump and sell lower... it’s really not rocket science. Just don’t get greedy... hit your target a get out. The real question is: is it worth my time in terms of ROI? Frankly, no not yet. I am streamlining the work, semi automating thru alerts, triggers, and buy/sell presets. But my paycheck and my side hustle still pay better. However I’m on a slow trajectory right now and I’m curious where it’s going. Will I plateau? Yes probably. But I’m enjoying the ride.
- dbancajas 6y ago
  Are you doing things like bankroll management? measuring your risk of ruin? Sharpe ratio? if you are not tracking how legit your upswing/downswing is then I think are doing a disservice to yourself.