Should you focus your attention on those meme stocks or look the other way? Here are some tips to consider.
You’ve been eyeing that meme stock. You’re eager to jump in, join the crowd, and ride it to infinity. Understandable? Yes. Sensible? Not always. This tale has played out before, and for many traders, it hasn’t been the happiest of endings.
Should you focus your attention on those meme stocks or look the other way? That’s up to you. But remember: Some lessons need to be learned the hard way. As with all trading, starting small may be the way to go.
On the surface, that latest meme stock has all the makings of a trade candidate—volatility, momentum, buzz. That’s all you need, right?
Not so fast. You also need liquidity. Plus, smart traders will try to anchor their decisions to at least one or more fundamental and/or technical points. There should be a reason to get in when and where you do, and the exit target should be something other than zero or infinity.
Have you decided to forge ahead despite the clear cautions? Heed the lessons from those who’ve been there.
There’s an old adage about knowledge and wisdom. Knowledge is learning from your mistakes, but wisdom is learning from other people’s mistakes. Most of us would choose wisdom. It’s often cheaper.