The most recent crack dealers are online trading platforms (OTPs). What does endless scroll look like on a trading platform?
The platform that falls into this category in Canada is WealthSimple’s Trade app. I downloaded it when it was first released and fell victim myself to my excitement overshadowing my ignorance of how an IPO works. On my second trade1 I got the confetti and then two days later lost 50% of its value.
Thankfully I did know enough to follow two important rules when investing:
- Don’t risk more than you’re willing to lose.
- Buy low, sell high.
These rules prevented me from realizing the loss in Slack’s share value because I did not sell the shares, which have since recovered roughly 50% of the value I lost in those first few days. I won’t sell these shares until they have netted a healthy return, perhaps years in the future, because I don’t need that money right now.
What Scott identifies is that not everyone joins the game with these rules in mind and the platforms are actively working to stimulate the same psychological stimuli as a casino or lottery to make even those who do have a strategy lead with their heart instead of their brain.
And much like with social media, the stakes can be life and death.
My second trade was a couple day’s after Slack’s IPO; my first was in Apple which as of writing is up 26.84%. ↩