Arigatou & a short reflection on meme stocks

Event: GME Revival 2024

Firstly, in no way is this any means of giving advice or wanting to influence anyone. Just a reflection or reference note for my forgetful future self to be wiser when playing with my college funds. Read on but at your own caution, responsibility, and leisure.

Experimental approach: I spent 2 days researching social behaviors on the meme stocks from a price perspective, using majority of my personal portfolio for thrills (and hopefully some profit). I found it useful to refer to The Roaring Kitty's X Profile and other social media, and also mostly researched on relevant social behavior and trade loads (Price x Quantity, units of difference between successive large loads). Timeliness on the market is also extremely important for short-term meme stock traders. Lastly, inherent bias: I dislike people who place iceberg orders.

In general, my findings are similar to those in the meme stock ecosystem. If you are unsure, these are namely:

- I practiced the method of 'Buy low, and keep holding until you no longer have the energy to trade or need to sleep' (I slept only 3-4h the past 2 days doing my workings and research). The market hour halts will come, and this will very likely make people scared and sell off because they think of thoughts like "What if it drops when I am price-blinded by the halt?" (paper hands) It is okay to lose money in the short run. Be patient! Just know that it will rise again (just hopefully not 3 years later), but I would think it better for me to not blindly trust the system fully, as with almost everything in life.

- When to strike? It seems that the price has fallen significantly during market hours, possibly due to obvious reasons. But what happens outside market hours when there are no halts? A collective of the 'power of the people' seems to show that society wants the price to rise, but it has been often hinted that certain players and events in market hours have interests that run counter to it. These entities have very strong backing power, so you probably need to insure yourself against losses.

- One way to prevent yourself from going too deep into losses is to set stop losses at 7-8% loss from your initial entry position, that is, unless you are lucky like me to near-religiously trust the system and get away with it. If you are like me, chances are greed gets the better of you and you're probably all in or something like that. This is a way to enforce limits on yourself! Otherwise, I had also read some articles that suggested placing at most 10-15% of portfolio in meme stocks if we really want to, to limit losses at the expense of stunted profits. Then again, this whole experiment of mine was to see if the system works, and apparently it does when I followed it closely to HODL. Well, at least for the first 2 days. None of my stop losses got triggered, and every day was a net profit.

- If you're in too deep, how can you bail yourself out? Either sell for a (hopefully small) loss or perform Averaging out! Chances are you know of Dollar Cost Averaging, and I applied a similar principle here. Think your target price is too difficult to reach after it has fallen from your supposed grace price? I injected more money in at a way lower price (say, 30 usd when initial purchase was 60 usd, so with an equal quantity you have an average 45 usd). The idea is that the market is primarily more sensitive to price first before quantity, so we want to hit the price first, and then worry about quantity later, be it selling it all at once or selling it over multiple occasions. This is useful if you have bought in at an extremely-difficult-to-attain price, and want to break-even or still potentially profit from it. Might be super bad though, as it feels like you are digging a bigger hole for yourself. However, it seems that for meme stocks, the principle of 'Price before Quantity as a Priority' comes first. Elastic trades.

- Social media cues are super important. It seems that this while frenzy is brought about by the People, for the People, so it only makes sense to understand the People. This was what inspired me to do this study in the first place. Apart from Roaring Kitty, and his courage-inspiring posts, you can scan for the general sentiments all over websites and trading platforms. But remember to take a step back and question how does this potentially affect the stock. A historical record study can be useful. Sure, a whale or big investor might be selling, but they aren't exactly wrong to do so as the price has risen favourably. Yet, is the price currently or still rising? When will we expect it to fall from a huge quantity? Which brings us to the next point.

- Quantity. I had observed with huge quantity in sell orders, it is an immensely painful obstacle to overcome for the People collective, who in particular want the price to rise. You can read more about the Prisoner's dilemma, and usually it ends up with both prisoners selling their homies out. What if they both didn't snitch though? If snitches get stitches, do non-snitches get big bank accounts? Only time can tell, but one thing's for sure: there doesn't seem to be something called Non-snitches' Dilemma (yet).

That about wraps it up. Time for a good meal and finally some sleep.