“You actually can be wrong quite a lot and still make money.”
That’s one surprising lesson learned by Ivailo Chaushev, a day trader who’s been navigating the market for 16 years, inspired as a teenager watching his father trade. Chaushev says he hasn’t racked up the gains by putting on exotic options bets or trying to ride momentary meme stock hype.
He said he’s generated his returns by watching the market, and investing steadily in popular stocks like Nvidia and funds that track major indexes and sectors, mostly in the US. Business Insider viewed screenshots of his brokerage account to verify the gains.
He said his early days as a trader were consumed by quotes and charts and screens, but things are more balanced now and he’s learned some valuable lessons along the way.
Here are his top tips for traders trying to navigate the shifting sands of today’s stock market.
Don’t over-leverage
The possibility of maximizing profits via leverage can be tempting, but Chaushev made it clear that he sees it as a significant risk that traders should make sure they understand. He noted that over-leveraging is the most common mistake he has seen new traders make. When combined with overconfidence, the results can be brutal.
“These two are connected,” he said. “When traders become overconfident, they use too much leverage and they blow up. Above all, be humble, because if you’re not, the market tends to find a way to humble you very quickly.”
Avoid meme stocks
Since GameStop mania in 2021, meme stock hype has ebbed and flowed, but it’s always a tempting siren song with its promise of rapid, eye-popping returns. The GameStop squeeze kicked off a new era for retail traders, luring many into the market to chase gains in shares of struggling companies like AMC Entertainment and Bed Bath & Beyond.
Chaushev said that the extreme volatility of meme stocks makes them a major hazard for most traders, with speculative gains that often evaporate quickly, leaving many traders holding the bag.
“Meme stocks are very difficult to trade, and I do not recommend anyone do it,” he noted. “When it comes to social media, people need to do their research.”
He also advised traders to avoid stocks that are constantly hyped by financial influencers, noting that by the time traders hear about a rising meme stock, its often too late to make money.
Don’t buy the “get rich quick” talk
Chaushev also addressed the popular view that day trading is an effective way to get rich quick. In reality, trading is difficult, and most traders lose money for a variety of reasons.
“It’s not a fast process. You will not turn $1,000 into a couple of million in three months. You need discipline and you develop discipline by just being in the market for a long time.”
While he acknowledged that some traders have turned a quick buck in the market, Chaushev says lucky timing is the big factor in those instances. He urges retail investors to instead be ready to stick to an investing strategy for years—and be ready to possibly lose some money along the way—before they see the gains really compound.
