Not Everyone Makes Money with Meme Stocks

Can you make money trading meme stocks? The answer is yes if you buy at the beginning or mid way through the price upside of the stock. But if you hesitate and buy toward the end of the price upside or around the peak price, you will lose money and lose it in a hurry.

Buying meme stocks is speculation and not investing. As such the prices rocket to the upside forming a bubble that always bursts when the early buyers decide to sell at or near the top. Those people who bought at high prices will very quickly see losses mount as prices head to the downside more rapidly than they went up.

If your source of information about meme stocks comes from social media, be very careful about believing the info. Much of the information is simply opinions of naive people who have no real clue about the patterns of price movements in stocks. Many of their ideas are based on hope, hunches and hype that defy reality - not a good formula to make money.

Who makes the huge profits and who losses money with meme stocks? One scenario is that some early buyers (experienced speculators) and others keep hyping the stock to encourage the inexperienced trader to buy meme stocks at inflated prices - so early buyers make bushels of money as they sell to inexperienced buyers who are late to the party and willing to pay too much. Another scenario is that inexperienced people simply believe their own hype about prices always going up so they buy at very high prices.

Just remember that price bubbles always burst and falling prices on the downside mean losses.

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