I used to trade stocks for a living. I started out as a market maker for NASDAQ stocks right before the internet bubble then traded my own account for over 10 years. After the kids were born, I transitioned from day trading to more longer-term, position trading. With the recent euphoric market, the day trading hat is back on. With that said, there are so many things I’ve learned from trading, mostly about human psychology but that’s a discussion for another day. The one tenet that became very important for me was price discovery. Where were buyers and sellers willing to transact and at what price would there be an equilibrium. You can glean a ton of information from watching the action and identify spots of support and resistance, which I used to limit risk. If buyers were no longer willing to support a stock at a certain price, then something has changed and it’s best to get flat and reassess. Vice versa on the sell side. The closer I could buy or sell to these spots, the more information I would have and the easier I’d be able to identify if I was wrong, saving me money in the long run because all trades are not winners. For example, say a stock was trading in the $10 to $12 range. After watching the action, buyers would always step in at $10 and sell at $12. So, buy at $10 and sell at $12, right? I wouldn’t want to buy at $12 because I know sellers are stepping in there, so what’s the point? If the price broke through $10, then I’d know it’s probably going lower and if it went through $12 then it’s probably going higher. In that scenario, I don’t mind paying over $12 once I got confirmation that the sellers there were cleaned out. The bigger the sample size the better the information. This is a simplistic example but you get the point.