Day 5: Maintain a balanced view about a stock. Manage emotional trading.
$Reddit(RDDT.US$ I will use 2 articles to explain how to maintain a balanced view about that stock:
Article 1: 3 Reasons to Sell Reddit Stock, 1 Big Reason to Buy | The Motley Fool
Article 1: 3 Reasons to Sell Reddit Stock, 1 Big Reason to Buy | The Motley Fool
From the title, you can guess that this article is neutral. It gave 3 red flags about the stock - not consistently profitable like Meta, difficulty in monetization and its unpopular CEO Steve Huffman. The last point is a green flag - the platform has a largely younger audience.
Article 2: Why I Wouldn't Touch Reddit Stock With a 10-Foot Pole | The Motley Fool
The headline is negatively bias and implies that you should not buy the stock. You should not be fooled by it because the last paragraph revealed Reddit has an advantage over its rivals - the company is experimenting with data licensing. According to regulatory filings, it has signed $203 million worth of data licensing deals. In essence, this gives customers such as Alphabet access to Reddit's data library, which they can use to help train their own generative AI systems.
The headline is negatively bias and implies that you should not buy the stock. You should not be fooled by it because the last paragraph revealed Reddit has an advantage over its rivals - the company is experimenting with data licensing. According to regulatory filings, it has signed $203 million worth of data licensing deals. In essence, this gives customers such as Alphabet access to Reddit's data library, which they can use to help train their own generative AI systems.
Comment: When we read an article with a negative bias headline, it can affect us emotionally to make a regretful move like panic sell (fear). The only way to overcome emotional trading is to read both sides - negative and positive. I analysed the media sentiments about the stock - mostly negative and are not helpful for those who want to hold the stock for the long term.
Very few can read financial or earning reports independently without being 'manipulated' by the social media. It is even more dangerous if you blindly follow others who showed you TA charts with confirmation bias.
I recommend beginners to write short journals after you bought or sold the stock stating clearly the reasons for your decision. Your reflection will help to minimize emotional trading. It's very easy to write journals using the Moomoo app; you can choose to keep it privately or share it in the stock's comment. You can even join a group chat and discuss with like-minded people with similar conviction.
Disclaimer: The above is not financial advice and for the purpose of education. Please do due diligence (DYODD) if you wish to enter a trade.
Very few can read financial or earning reports independently without being 'manipulated' by the social media. It is even more dangerous if you blindly follow others who showed you TA charts with confirmation bias.
I recommend beginners to write short journals after you bought or sold the stock stating clearly the reasons for your decision. Your reflection will help to minimize emotional trading. It's very easy to write journals using the Moomoo app; you can choose to keep it privately or share it in the stock's comment. You can even join a group chat and discuss with like-minded people with similar conviction.
Disclaimer: The above is not financial advice and for the purpose of education. Please do due diligence (DYODD) if you wish to enter a trade.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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