Bull market has attracted millions of US day traders, who are now seeing everything change

In early 2021, amid the speculative euphoria of the stock market, two day traders went viral on TikTok with a video explaining their winning strategy.

“I see a stock going up and I buy it. And I stare until it stops going up and see,” says the user known as Chad. “I do it over and over and it pays for our entire lifestyle.”

Yes, Chad discovered impulse trading. And it seemed to work well for him. Like the millions of people who came to trade during the pandemic in the United States, Chad was building an exciting bull market that was consuming ultra-cheap Federal Reserve money.

For newbies, it was hard to go wrong. Pick a stock, any stock, and watch it go up. Now, of course, the ride is coming to an end almost as quickly as it started.

What is happening: to invoke a metaphor of “Game of Thrones”: The market is packed with summer babies, and winter is definitely coming.

“Turns out investing is kind of hard when the free money faucet is off,” one user wrote on the WallStreetBets Reddit page last week, alongside an apparent screenshot of a stock market data page showing a sea of red.

For traders who only know the excitement of the bull market, 2022 is shaping up to be a sharp turn. On the WallStreetBets page – the epicenter of meme stocks in 2021 – the mood is decidedly less festive. The battle cries of the “diamond hands” and “Diamond hands”HODL (buy and hold)” have been replaced by playful memes about never-ending loss.

Wall Street isn’t feeling particularly excited either. Last Friday (20), the S&P 500 dipped into bearish territory, but narrowly avoided closing. Meanwhile, the Dow Jones registered its eighth consecutive weekly loss – its longest losing streak in nearly a century, reports the expert. CNN Matt Egan.

There are signs that the slowdown is pulling consumers away from retail. Robinhood, the free trading app that has been instrumental in the amateur investor boom over the past two years, saw its monthly active users drop 10% to 15.9 million in the first quarter of this year.

Still, Wall Street learned the hard way during GameStop’s run what can happen when you discard Robinhood’s mob power. And for those who downloaded the app looking for a little excitement during a dark time, now is a great time to stay, watch, and learn.

“I think retail traders are here to stay,” said Craig Erlam, senior market analyst at Oanda. “It has never been easier to trade the financial markets… Some will be put off, of course, but I think there will be many who won’t. After all, these are very interesting times in the markets.”