Okay, so maybe the title sounds a little harsh, but it might make sense later on. I created this post to note a rising trend I have noticed throughout the trading community.
Probably the greatest impact the Internet has had on the individual stock trader is the ability to get free stock picks. Twitter, in conjunction with some third party services, has only increased this interaction.
Everyday on Twitter hundreds of users are spitting out trade recommendations and their market commentary. On the other hands, there are thousands of other traders looking to make a quick buck or take the fast road. Not willing to take the time to learn how things work, and just blindly follow into a stock position some trader recommended.
More often than not, these actions are followed by some angry comments pointed back at the original stock picker.
Here is the problem, there is not one trader who has a 100% success rate when it comes to picking stocks. It’s just not possible. Just like how NFL kickers don’t always make a 20 yard field goal or how the best NBA shooters aren’t 100% from the free throw line.
Perfection is rare to come by, so why should we expect stock recommenders to make every right call?
While some good traders hate to think this way, stock trading of all sorts DOES involve a form a probability. Nobody can predict the future, but we can safely make educated guesses based on trends we have noticed in the past.
But here is what the good pickers do…They are able to make enough good trades out of a basket of picks to erase the losers and come out on top.
The burden lies on the “pickee” to determine which stock(s) THEY like the best and want to take part in. By blindly following picks, you may have caught one of the losers out of the basket.
So the next time you blindly follow a stock pick, lose money, and want to vent your anger through a strongly worded tweet, comment, or email remember whose the real idiot.
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