Reddit’s WallStreetBets isn’t the only online hangout for passionate amateur traders
Just around dawn, before I’ve brushed my teeth, fed the cat, or even put on my glasses, my iPhone hovers glowing just above my face as I launch my trading app. From first glance, I can tell if it’s a red morning (market dumping) or a green one (the bulls are buying). I glance over the gains/losses percentages in my positions tab. If there’s a huge deviation — if bitcoin surged overnight and my shares of MARA, a bitcoin-adjacent stock, have skyrocketed, for instance — I might put in an order to sell shares, or adjust an existing order.
Next, I jump into my Discord app and race through alert channels on Xtrades, a paid discussion group I joined back in November where amateur analysts share tips. When the GameStop meme-stock bubble blew up in late January, attracting a swarm of new investors, I’d already been in the Discord group long enough to understand what was happening and why it might be best to avoid jumping in. When Dogecoin and bitcoin rose dramatically, I was already positioned to benefit from some of the related interest in stocks I was holding. Groups like WallStreetBets and communities such as StockTwits have attracted lots of users and media attention, but the relative calm and order on Xtrades appeals to me, someone who is still finding my feet in trading.
When I check Xtrades each morning, I’m searching for advice, tips, and signals. There’s a guy on there named Wags. I don’t know anything about him, but his morning plays are incredible. If he’s confident with a short-term day trade, I will probably follow, throwing $100 to $250 to follow a trade that he’s engaging in. When I feel like I’ve done all I can in the 10 minutes between waking and when trades can actually go through (7 a.m. central), I get coffee. I’ll be at my desktop computer when options trading starts at 8:30 a.m.
This didn’t used to be my life. I didn’t used to obsess over stocks or cash-covered puts or the halo effect of bitcoin prices. Now, I might be a little bit addicted to what at first felt like gambling, but now feels like a lifestyle choice.
Dipping my toes into day trading
Last summer, in the throes of stay-at-home pandemic boredom, I had an idea so good I wondered why more people weren’t talking about it.
Weed, it seemed to me, was about to bring in billions.
As cannabis legalization was starting to appear on election ballots in several more states, it seemed obvious to me that the U.S. was on a path toward nationwide legalization — state by state at first, and then eventually at the federal level. I started to notice some of the same signals I saw before the dot-com boom: an influx of money and interest, accelerated innovation on existing products and ideas, and lots of hype.
Weed, it seemed to me, was about to bring in billions; the startup stocks in the sector were going to blow up. I started researching individual cannabis stocks, mostly in Canada, with the idea to start investing a few hundred dollars in each and secure a huge windfall in 2021. What I didn’t know at the time was that I was just one of thousands of new traders who decided to jump into the stock market during pandemic shutdowns. I didn’t know that all this money we were simultaneously injecting into stocks was going to lead to a self-fulfilling prophecy: a bull market pumped up by people trying to enter a bull market.
I started an account with an initial plan to invest $1,000. TradeStation, the online broker I used, offered a $50 bonus for depositing a $2,000 minimum. Now I was in for $2,000, only $1,000 of which I initially planned to use. Within a month, I put in $5,000 total and used all of it.
As I began trading, my rules were simple:
- Don’t lose all this money.
- Don’t put in more than the $5,000.
- Don’t invest in tech stocks I might write about in my work as a freelance journalist — that ruled out Tesla, Apple, Microsoft, AMD, IBM, and many others.
My first attempts at trading were clumsy: I was trying to buy stocks on deep dips and using news reports to guide my trading. I didn’t know then that I was “catching falling knives” (purchasing tanking stocks I hoped would rebound eventually), which led to me holding on to a bunch of losing equities that were draining my account’s value. I started using Tweetdeck to keep tabs on chatter about individual stocks I was invested in, and soon I saw a link for a Discord trading group called Xtrades. I’ve used Discord for about three years for talking with friends while playing video games. Discord’s free app handles video and audio chat, but it also has a powerful set of free chatroom features that work similarly to the ones in Slack. I thought it was a novel idea to do stock trading talk on discussion channels there; I learned later that the WallStreetBets group that originated on Reddit was also operating on Discord during the GameStop stock squeeze.
I signed on for a week-long free trial to see if it was worth joining the group. With my mind still fit to burst with the data from my first month of trading, it soon exploded from the sheer magnitude of new information available on Xtrades.
Discord deep diving
Xtrades is organized into more than 30 channels focused on stock and options alerts and watchlists, detailed discussions about individual sectors and stocks, and a section dedicated to general questions about trading. A channel called “Winning-trades” is just a collection of people posting screengrabs of their lucrative stock wins of the day, or bragging about their portfolio blowing up that month. In the “Education” channel, play-by-play videos detail what went into a specific trade; there are also resources for learning more about topics like option spreads and volume analysis. A newer channel, “Investments,” asks users to make more detailed analyses for long-term holds of specific tickers or companies in certain market sectors, such as nuclear energy.
As a word nerd, what fascinated me beyond the firehose of actionable stock tips was that browsing the channels and trying to follow the flow of conversation felt like learning a new language. “BTO” is buy to open. “TSL,” trailing stop loss. “Bag holding” means holding losing stocks you wish you could sell at a profit. The coded language of options trading was demystified as I became acclimated to the Discord group over the next three weeks: A message that read “STC SPY 11/26 378c @ 1.3 partial” meant someone had just sold some, but not all, of their November 26 expiration call options with a strike price of $378 in the popular SPDR S&P 500 Trust ETF for $1.30, or $130, on each contract.
For every devastating $300 total option loss, I’d make it up with multiple $30–$50 gains, mostly on stocks that had sharp upticks in a single day, called out in the morning on the stock-watchlists channel.
As I learned over the coming months to take partial profits on stock rises, to set stricter stop losses before I became a bag holder, and to stop betting on short-term options that would expire with $0 value, my earnings started slowly to accumulate in November and December. For every devastating $300 total option loss, I’d make it up with multiple $30–$50 gains, mostly on stocks that had sharp upticks in a single day, called out in the morning on the stock-watchlists channel.
My goal to not lose all my money morphed into a goal to earn enough cash to withdraw my initial investment and only play with house money. Three months after I first joined the Discord group, largely due to a ridiculous bull market and bets on cannabis, pharmaceutical, and smart energy stocks, I hit that mark: $5,000 profit. It just happened to also be the same week that the world suddenly learned about an epic short squeeze on GameStop stock and the secret world of Reddit traders.
Kevin Wan, the Los Angeles-based 28-year-old who started Xtrades in 2015 under the name “Enhanced Investor,” says that his vision from the start was to “create active chatter where people are sharing ideas with each other on a daily basis.” Sure, chat rooms for stock traders have been around since before the first dot-com bubble, but according to Wan, it’s hard to know what information to trust. He says that even with message boards, apps, chat servers, and other tools, “people haven’t really figured out the most optimal way to interact socially” when discussing trading.
Wan has four partners and about 60 paid moderators and analysts on Xtrades, along with 100,000 total paying members and nonpaying trial members signed up. The partners, moderators, and analysts are paid out from membership fees to Xtrades, which range from $38 a month to $988 for a lifetime membership that includes one-on-one mentoring and access to additional discussion channels. The payouts are performance-based and can range from about $80 to $4,000 each, taken from a pool of about $50,000 a month. Some of Wan’s partners are people he recruited on other message boards or who were customers of his previous stock-tip services, originally sent via text messages, long before Discord was an option. “I don’t know any of these guys in real life,” Wan says.
There’s an overall disdain on Xtrades for sites like StockTwits and discussion groups such as the now-infamous WallStreetBets on Reddit, which Xtrades members dismiss as pumpers of “meme stocks” that aren’t as well-organized and don’t post as many good plays.
Xtrades is patrolled by automated bots and moderators that delete off-topic posts, and populated by mostly amateur analysts who take stock charts, earnings reports, and scanners that track market moves very seriously. They use pattern recognition to spot falling wedges (a contracting stock price pattern that could signal a bullish imminent breakout), consolidation (the period when a stock price stops dynamically rising or falling), and sudden changes in trading volume or pending orders to predict where a stock price will trend immediately or over the course of several weeks (for so-called “swing” trades that are held past the day). There’s an overall disdain on Xtrades for sites like StockTwits and discussion groups such as the now-infamous WallStreetBets on Reddit, which Xtrades members dismiss as pumpers of “meme stocks” that aren’t as well-organized and don’t post as many good “plays,” actionable alerts on what to buy and at what price.
Julia Valerianovna, who has worked in the finance industry in New York City at Third Century Management and goes by “Julie” on Xtrades, says she was able to build a strong following in a few months with her detailed equity stocks charts and analysis. “I believe the staff, analysts, and structural competency of the organization is to a professional standard,” she said in a private message.
The advantages to hosting the group on Discord are plentiful: It’s free for Wan and his partners to use, it’s a website and app that are able to handle lots of users at a time, and it allows for the assigning of ranks and use of bots to track plays that are posted on the channels. The top analysts rise in rank and specialize in specific areas. One user, “Matrix,” posts charts by request every night followed by sardonic, one-liner analysis, such as, “Gonna get rekt” (it’s about to go bust) or “I had a pt of $40 but it already reached dang,” meaning “My price target of $40 was reached before I could get in on it.”
The analyst play tracking creates some accountability for posted trades and win rates — the ratio of alerts that ended up profitable versus those that weren’t — that help Wan and his partners figure out who’s posting the best alerts. One of the top traders who posts stock swings on Xtrades goes by “Scared Shirtless”; he recently had an 85% win rate, mostly earned on small-cap stocks. His alerts were posted with detailed entry points, price targets, stop losses, and charts, making the plays easy to jump on for users. Shirtless, a 36-year-old Las Vegas-based trader named Remy Valentin, says he joined Xtrades in November 2019 after hearing about it on StockTwits, a Twitter-like social media network for sharing stock tips. Three months after joining, he upgraded to a lifetime membership. “It was the best trading decision I’ve ever made — truly life-changing,” he says now.
Valentin says he’s made about $100,000 to $200,000 since joining Xtrades, and that in addition to scouring books, YouTube videos, and Investopedia, the group has helped accelerate his learning. “I was essentially gambling and didn’t have a firm understanding of how the markets and trading worked,” he says. He says his goal is to make his first $1 million by 40 so he can retire from his IT systems administrator day job.
The resilience of the community
Xtrades is not a perfect paradise: Personality differences between members of the community have led to snarky and negative users being banned, some of who have gone on to form rival Discord groups. But overall, it’s friendly and positive. As I got more comfortable on Xtrades, I started posting links to news stories related to discussed stocks, and eventually, I started doing a daily “Weed stocks update” with analysis on what I was seeing in my own watchlist.
The posts led to some messages from other users asking for my advice, which initially seemed ludicrous to me, except that over two months I had absorbed enough information to effectively have taken a crash course in cannabis stocks. I was able to point them to helpful resources for learning more, and warn them off big mistakes I’d already made: Don’t play options until you really understand how they work. Sell small portions of your stocks when they rise in value instead of waiting for one big score. Don’t chase stocks tips too late or try to catch a rocket that already took off. And don’t put too much money into any one particular equity.
Another event like the pandemic or the GameStop boom-and-bust may slow Xtrades down, but it won’t kill it.
Wan recognizes that what’s happening in the market now, especially with short squeezes pumping stocks and cryptocurrencies to the stratosphere, may not be sustainable. Stimulus money is driving bull runs, he says, and swing trades are largely profitable, so there’s no point in selling. “I can literally buy something, go to sleep, wake up, and see it going up by 20% to 30% beyond my entry, which is just insane,” Wan said. “In 2017, 2018, you’d find one good 20% play a day. Now it’s like six or seven penny stocks that have jacked up… You just see people make numbers that you would not see before with ease.”
He predicts that in three or four years, we may not see a recession, but some kind of unexpected event that could disrupt the continual rise of a bull market the way Covid-19 did in spring 2020. But even last year’s major March market dip didn’t cause Xtrades’ members to miss a beat — some users beefed up their positions at low prices, while Wan liquidated stocks and paused buying more amid all the uncertainty. “People might cancel their memberships or stop investing. But generally, we’ve been pretty on top of these major pullbacks so far,” he says. So he believes that another event like the pandemic or the GameStop boom-and-bust may slow Xtrades down, but it won’t kill it.
I know that my own winning streak probably won’t last. I’m withdrawing a few hundred dollars out of my account every week until all that’s left is winnings, and all the stock plays are being made only with house money. I’ve tried to play smarter and take fewer risks: When the GameStop squeeze was happening, I didn’t put any money into GME at all. The volatility of the stock made me feel it would be less a wise trade than a complete gamble. Maybe I missed out on thousands more dollars, but I didn’t lose anything on it, either. And even if some sort of sudden news-related market crash or a sustained downturn comes sooner than expected and those winnings disappear, I’m prepared to find a silver lining: I’ll get to sleep in later every day.
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