Short Term Trading is a Waste of Time (What to Do Instead)

We had another one of those bad days in the stock markets (they tend to happen every once in a while).

Stocks are down.

Crypto is down.

Commodities are down.

A lot of people are freaking about their investments declining 30% in a day (especially the people who used leverage as they are forced to liquidate and see their capital wiped to 0).

Look, here are some hard truths:

1. If you have to check stock prices every day, you are doing it wrong.
2. Day trading is an absolute waste of time and money.
3. You are much better off building a real business that generates tens of thousands of dollars a month instead of trying to turn your $20k portfolio to $50k.

I own a tax/legal consulting firm and over time I’ve had many clients who were “traders”.

This means they bought and sold stocks/crypto/commodities on a regular basis and almost never held any investment longer than 3 months.

This is the opposite of “investing” which involves buying and holding an asset for long periods of time (often multiple years).

These trader clients of mine have a pattern that looks like this:

1. They make money for a few years. The markets are good, things are going up, and they’re profiting from it and getting happy.
2. Since they are making money from this, they never learn any real useful marketable skill. Over the years, the only thing they are good at is trading.
3. Then, every single time, they make some kind of “sure bet” that doesn’t go well, or a bad stock market decline happens, or some investment they made tanks, and they lose a TON of their capital.
4. If they are using leverage, they are forced to sell and they lose everything. I mean go to 0. Zero, zilch, zip, nada, shunya, nothing.
5. If they do not use leverage, they lose the vast majority of their investments and are forced to sell anyway because they need the money to live. They have no other sources of income or skills to generate cash. They’re forced to sell at huge losses to pay expenses. You cannot wait out the bad times.
6. Typically bad times in the stock markets lead to worse times in the stock markets (as human nature forces them to do even more risky trades to try to “make the money back”).
7. They all eventually go bankrupt and are forced to sell their office, their house, and move back to their hometown.

This happens ALL THE TIME. I am not exaggerating even by a little.

I’ve lost over a dozen clients over the years to them being traders and then blowing up.

Imagine having ₹20+ crores ($2-3 million) in your account one year, and then being in debt and having to sell your house the next year.

From living in the best part of the city to having to move back to your hometown to save costs.

It happens all the time and is not rare at all.

Good investing is about waiting, not checking prices every day.

Yesterday (6th August, 2024), crypto markets were down 25% in one day.

A TON of day traders lost a lot of money. Many were forced into liquidation because of leverage.

Sidenote: I’ve seen so many clients lose so much money because of leverage that I cannot recommend anyone use it in good faith.

But here’s the thing. Over the last year, Bitcoin went from $26k to $67 and then yesterday (6th August, 2024), it went back down to $52k.

If you just bought and held it, you’d have doubled your money regardless of the “crash”. Doubling your money in a year is a PHENOMENAL return.

If you were just a hodler and not a day trader, you would have wasted 0 time checking prices and doing multiple buys and sells regularly and have doubled your money.

So you make MORE in the long run AND it takes you less time. Sounds like a no brainer.

The time could be used to build real skills and businesses that generate cash flows for you regardless of what the markets are doing.

Trading is a waste of time. You need to build some REAL skills instead.

Trading is a great way to waste 5+ years of your life while learning nothing of value.

Inevitably anyone who chooses this “profession” ends up regretting it. You are not super smart and you have not figured out a way to make a ton of money.

Unless you have access to insider information, you are a gambler. Stop this madness.

Build some real skills and develop a business that pays you tens of thousands of dollars a month regardless of what happens on the stock markets.

If you want to start a business but have no ideas, I recommend picking something simple and straightforward like learning a high paying skill and freelancing or building a social media audience.

I own a bunch of online businesses (software companies, affiliate marketing ops, and even this *hobby* blog/newsletter makes more than a quarter million a year).

I made more money last week than I can reasonably spend all year. My investments are also down 25% from the crash yesterday but guess what – unlike a trader, I don’t need to sell.

I can just wait it out because my businesses generate cash flows and I don’t need to sell investments to meet living expenses.

In fact, I can just generate more money from my business and buy the dip and make myself even more money.

The point is that building a real business is far superior to day trading.

You don’t need to worry about stock prices.

You make more money than you can spend (not right away but in a few years).

Your investments actually make even more money than the trader makes despite investing 0 time in it because you never blow up and go to 0 like him.

AND because you are still making money even when the market has crashed, you can buy the dip and get an even higher return.

If you do only one thing today, make it starting an online business.

If you can’t think of anything, then as I said before, learn a high income skill and sell it.

Here are the resources I recommend:

1. If you want to build an X based social media business, get my course The Art of X.
2. If you want to start a web design business, do The Complete Web Design Course ™ [No prior experience required]
3. For copywriting, I recommend this course.
4. Service based business with cold email/DM, use No-BS WiFi Money Guide (COMPLETELY FREE – you have no excuses anymore).
5. Anything else (Look online for courses from people who do that particular thing for a living. You do not want to buy anything from people who make their money solely by teaching that thing. They must independently be making money from the skill they are teaching).

You don’t have to use products I recommend (although No-BS WiFi Money is free so I’m not sure why you wouldn’t use it).

You can even figure out a few things by yourself (although it takes MUCH longer and is harder because you have no experienced guidance).

Pick any business, learn the needed skills, and work on it day and night for a full year. You will be a million steps ahead from the idiot looking for the next “good trade”.

– Harsh Strongman