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Week of 4/30: Vacation Trading

For the week beginning 4/30 and ending on 5/4 my wife and I took a break and headed to Hawaii for a week of relaxing in the sun!  Given that I was not doing anything for my day job, I decided that trading while on vacation was acceptable because I actually enjoy doing it!  The major barrier will be the time difference, markets open at 9:30 AM eastern time, that’s 3:30 AM Hawaii time.  I wasn’t going to actively trade given the time difference, but I did set up some limit orders for buying and selling.

The Trades

I was holding TWTR from the previous week and decided to set a limit order for a 2% profit.  This order executed on 5/1.  I sold 330 shares for $30.97 each, total sale $10,214.87.  A profit of $210.92 about 2.1%!

5/2 was a purchasing day!  I have been eyeing Dave & Busters (PLAY) for a few weeks now.  The price had pulled back and appeared ready for another upward rally.  I bought  235 shares for $42.53 each, total cost $9,998.68.

The same day I was on Twitter doing some reading.  You can follow me @InvesTakeCharge.  I saw a decent amount of chatter about a penny stock, Utilicraft Aerospace Industries Inc. (UITA).  The company primarily provides aircraft engineering, leasing, and maintenance repair and overhaul services, as well as jet charter services.  They released a statement a few months ago saying that the board had accepted the current CEO’s resignation and was putting new leadership in place.  My Twitter friends claimed to have information about a private investor that kicked in $3.5 million in cash for equity.  That means the company has money in the bank, a new strategy and no debt.  I decided this was a company worth taking a shot on.

Penny Stock Purchase!

I purchased 250,000 shares if UITA for $0.011 each, total cost $2,754.95.  I was excited to be back in a penny stock.  At this writing, the price had risen to $0.0135, an increase of over $600, 22%!  I have set a limit order for 1/2 of my shares to sell when the price reaches $0.017.

Telsa & The Elon Musk Rant

On 5/3 billionaire CEO of Tesla was on the quarterly conference call with investors and analysts fielding the typical financial questions that Wall Street insiders like to ask.  About 30 minutes in, Musk, fed up the questions he was being asked, declared the questions to be useless and “bonehead.”  The questions were regarding the timeline in which fully autonomous Tesla vehicles will be available.  Musk ranted about the unfair treatment Tesla receives from the media and that the questions were “boring” and “dry.”

Musk got further irritated, added several expletives and told everyone to just sell the stock if they didn’t like the waiting game.  So, Wall Street did just that, the share price plunged from over $300 to about $275 in a matter of a few minutes.

I woke up around 8 AM local time in Hawaii, around 2 PM eastern.  I saw the news of Tesla’s share price and knew i needed to act quickly.  The price had begun rebounding from the low around noon and was on its way back up.  I bought 35 shares for $282 each, total cost of $9,874.95.

I sold the same shares the next day for $296 each with a limit order.  The total sale was $10,354.81, a profit of $479.86 about 4.8%.

Tesla has been a tough stock to trade, this move was slightly easier.  The price drop had nothing to do with the fundamentals of the company and was only because Musk acted out.  A normal company might have suffered more and for longer, but Tesla and Musk are not normal.  Tesla has far loo large of a fan base to be kept down over Wall Street insiders fighting.

Final Notes:

As the week drew down I was very pleased with all my moves.  I made 2 profitable trades netting about $700 in profits.  I received $295 in side hustle payments that were moved to the E*Trade Brokerage account, plus the normal $50 I contribute each Friday when I get paid from my day job.  At the end of the week I finished with about $1,000 more than I started.

Week of 4/23: Active Trading Week

I made several trades this week with a concentration on making good trades.  I was not focused on making lots of money, I am concentrating on making good decisions and trading well.  Most of the trades I made came from recommendation from the chatroom at trade-ideas.com.  The rest were mine; we will compare at the end and see what was more profitable.

4/23 I bought 377 shares of CIEN for $26.57 each, total cost $10,019.96. This idea came from the chatroom.

4/24 I sold those same share for $26.65 each, total sale $10,041.82.  A profit of $21.86, 0.2%.  I started off the week with a profitable trade!

4/24 I bought 1,000 shares of AMD for $10.00 each, total cost $10,001.15.  This doubled my position to 2,000 shares total. This was my trade.

 

The Big Loss

4/24 I sold 5,601 shares of SGYP for 1.65 each, total sale $9,235.81.  A loss of $771.17, about 8%.   I had bought them thinking there was lots of upward potential but it wasn’t happening.  I had set my floor at $1.65, and stuck with it as painful as it was.

At this writing, stock had completely rebounded, last check showed it at $1.89, up from a low of $1.45.  This was a tough call and I think I made the right decision.

Good (& Profitable) Decisions

4/25 I bought 2,415 shares of IPI for $4.14 each, total cot was $10,002.90.
Sold the same share for $4.21 each, total sale $10,166.98.  A profit of $164.02, about 1.6%! This trade came from the chatroom.

Same day I bought 256 shares of ALSN for $39.03 each, total cost was $9,997.30.
Sold the same shares for $39.10 each, total sale $10,002.37.  A profit of $5.07, small, but still a profit.  This trade was from the chatroom.

Also on 4/25 I bought 211 shares of MU for $47.43 each, total cost of $10,012.68.
Sold the same shares for $47.55 each, total sale was $10,027.83.  A profit of $15.15, another small profit from the chatroom.

My last trade for 4/25 was KLXI from the chatroom.  I bought 133 shares for $75.08 each, total cost was $9,990.59.

The Weekend Approaches

4/26 was Thursday and I had made all the day trades I was allowed to for the week, any purchase I made today I would be forced to hold at least overnight.

I made 2 purchases and also received my first interest charge for having a margin account.  Both trades were my ideas.

Bought 330 shares of TWTR for $30.30 each, total cost of $10,003.95.
Bought 191 of LUV for $52.50 each, total cost of $10,032.45

I was charged $69.48 in interest for using E*Trades money to trade with.  This account has been active for more than 2 months, so it costs less than $30 per month so far to use their money to trade.

4/27 I sold the shares for LUV for $53.55 each, total sale was $10,222.84.  A proft of $190.39, about 1.8%.

I set a limit order to sell KLXI when it reached $74.34.  The goal was to minimize my loss because this stock just didn’t seem to want to go back into positive territory.  I set that limit order to salvage as small a loss as possible.  Then came news of a buyout and my shares sold at a bargain as the price rocketed past my limit and settled near $80 per share.  I paid $75.08.  Not being able to watch each stock all the time has it’s disadvantages.  I am looking forward to trying this full time.

Final Thoughts

My trades brought a loss of $192.55.  If you take into account that sale of TWTR from next week, that becomes a profit of $18.37.

The chatroom brought profits of $97.59 for the week.  It is the clear winner at this point.  Watching what others are trading and hearing someone talk about the current market conditions is an advantage.  I prefer it to surfing financial news websites and trying to find the best trades by myself.  The chatroom is loaded with full time day traders making a living at this everyday.  If they are willing to offer free advice from their years of experience, I am willing to listen.

My trading style is starting to develop and despite the profits being small they are profits nonetheless.  I’m going to continue with this path but probably try to slow down and make only a few trades per week.

2 Weeks of Trading, Profits, Losses and New Rules

The market has been volatile the past few weeks and I have not been able to break through the $25,000 threshold to open up a Day Trading account. But I have been able to make some progress!  More progress was made 2 weeks ago with about $1400 in gains, however, I gave back about $160 last week.  I am hoping this week will provide some good momentum to get over that $25,000 short-term target.

Goals

View all my current holdings here.  I have a few goals that I am currently working toward. The following is a quick recap:

Goal 1, $25,000 in Robinhood and E*Trade Brokerage combined.  I will consolidate the funds to E*Trade and conduct all my trading with that account.

Goal 2, $40,000 including the consolidated E*Trade account mentioned above and the cryptocurrency investments.  Once this level is reached I will become a full-time day trader earning a living off the market swings.

Goal 3, $2,500,000 all accounts combined and I will retire.

Robinhood Recap

Since opening the Robinhood account in February I have invested $2,000 into it and lost $240 as of 4/7.  The week of beginning 4/9 I began to change this.  I have been concentrating on making good trades and not concerning myself with the actual dollar figures.

On Friday 4/5 I bought 588 shares of CHK, a cheap energy stock that I thought might climb with the pending military strike in Syria.  The price was $3.07 per share I paid $1805.16 total.  On 4/10 this did not gain as much as I had anticipated.  I sold all the shares for $3.08 a small profit of $5.88, exactly one penny per share.  Although it was not a huge gain I still turned a profit.  I reminded myself to make good trades and not concern myself with actual dollars lost and gained.

4/10 I was listening to the live trading room available free at Trade-Ideas.com and heard that YY was starting to take off.  I bought 18 shares for $97.05 each, total cost $1,746.00.  The price quickly reversed and I sold when the price reached $96.00, a 1% loss.  This trade netted a loss of $18.00.  After a small gain and loss, I decided to take the rest of the day off.

Oil and War

4/11 The energy sector was moving up with the threat of war with Syria lurking.  I decided to find a good stock within the sector and see if I could make a profit.  Marathon Oil (MRO) seemed to fit this bill.  It had been on the upswing prior to the energy sector surge and I thought this would be stock that could bring some profits.  I made 2 trades of this stock, both netting a nice profit.

4/11 Bought 104 shares of MRO for $17.15, total cost $1,782.55.
Sold the same shares for $17.51, total sale $1,821.04.  A profit of $38.49

4/12 Bought 105 shares of MRO for $17.40, the total cost of $1,827.00
4/13 Sold the same share for $18.00 each, total sale $1,890.00.  A profit of $63

4/13 I moved the profits to a favorite stock that tends to move with the technology sector.  AMD was at a low point so I moved my profits there to hopefully profit over the weekend.
Bought 191 shares for $9.90 each, total cost was $1,890.90.
Sold the same shares for $10.08 the same day, total sale $1,925.28.  A profit of $34.38.

I ended the week with a profit of $173.09, gaining 9.8% in one week!  This was the result of making good moves and not forcing a trade when I didn’t have a good one to make.  Remember I did make a trade that lost money but I didn’t let it drag me down.

Robinhood Week Beginning 4/16

I have traded this small pharmaceutical stock from time to time as the price drops below $2.00.  The price was at $1.78 when I bought 1086 shares for a total cost of $1,933.08.  I set a limit order for $1.90.  By the end of the week, the price stagnated and had not sold.  We will see what happens next week.  I was still holding this stock at the end of the day on Friday 4/20.

E*Trade Recap

4/9 I was holding 17 shares fo NFLX which I had purchased for 290.49 each the previous week.  The price was on the rise and took the profits, I sold the shares for $298.25 each turning a total profit of $121.90.  I have traded this stock several times in the past; when the market drags it below $300 I can usually buy some and sell it closer to $300 for a profit.  As I play the market, I have begun to recognize certain patterns in certain stocks.

Still, on 4/9 I bought 515 shares of AMD for $9.72 each, total cost $5,010.75

4/10 Sold those shares for $9.80 each, total sale $5,042.44.  A profit of $31.69!
Still, on 4/10 I bought 51 shares of YY for $97.66 each total cost $4,985.69.
Sold these for $96.85 each, total sale $4,934.27.  A loss of $51.42
Bought 101 shares of MU for $49.40 each, total cost $4,994.90

4/11 Sold those shares of MU for $50.75 each, total sale $5,120.67.  A profit of $125.77!
Bought 16 shares of TSLA for $300 each, total cost $4,804.95.
I was hoping to capitalize on the bounces I have been seeing TSLA make over the past few months.  I held this position over the weekend in a swing trade that I plan to sell the following week.

4/12 Bought 30 shares of FB for $168 each, total cost $4,954.95
Bought 2,777 share of SGYP for $1.80 each, total cost $5003.55
Both these positions are swing trades I intent to sell next week.

4/13 Contributed $50 from my paycheck as I do every week.  If you have trouble saving read my post here about living like a billionaire and saving money.

E*Trade Week Beginning 4/16

4/16 I received $25.00 in dividend payment from when I owned WDC a few weeks ago.
TSLA share price had fallen since I bought it last week.  Being confident that they would recover, I bought more at the discount price.  Bought 17 shares for $289.93 each total cost $4,933.81.

4/17 Sold all 30 shares of FB for $168 each, total sale $5,034.93.  A Profit of $79.98!

4/18 I was eyeing SPOT because I have held it for a few weeks and it has seemed to putter out around $150 per share.  The price just hadn’t climbed past that threshold.   I set a limit order before the markets opened for $150 per share.  This executed when the markets opened but the price rocketed right past $150 as my sale went through.  I turned a profit of $549.89.  Had I waited until the market opened and the sold I could have sold for closer to $155 per share and increased my profit by 50%.  A new rule is listed below.

4/18 sold all the TSLA for $297 each, total sale $9,795.82.  A profit of $57.06!
Bought 554 shares of BBBY for $18.06 each, a total cost of $10,012.96.
Sold the same shares for $17.90 each, the total sale of $9.911.35.  A loss of $101.61.
I bought this stock at the wrong time.  The price quickly rebounded and moved past the price I bought at, but it was too late for me.

4/18 I tried to make another profit on the rising oil prices.
Bought 515 shares of PUMP for $19.37 each, total cost $9,981.84.
Sold those same shares for $19.17 each, total sale $9,869.44.
Bought 519 shares for $19.26 each, total cost $9,998.30.
Sold those same shares for $19.34 each, a total sale of $10,032.21.
Total loss from all these transactions was $78.49.

4/20 I contributed $50
Bought 1,000 shares of AMD for $10 each, total cost $10,004.95
Bought 2,824 additional shares of SGYP for $1.77 each, total cost $5,003.43

New Rules

From my SPOT sale, when selling a stock it is, OK to set a stop loss order before the market opens to protect profits.  I will not place limit orders until after the market opens and I have a better idea what is going on with the stock.

I will only trade a stock with one account at a time, there is no point in having two accounts and then trading the same stocks.

Trade size is increased from $5,000 to $10,000 per trade in my E*Trade account and the full amount of my Robinhood account.  The goal here is to make sure when I do make a good trade I make a good profit.  It will also limit the number of trades I can make to two at a time.  I don’t want to trade too many stocks at the same time.

Selling Short: How to Bet Against the Market

This past week was action packed with lots of ups and downs in the market.  With these wild swings, I must be able to profit when the market falls and when the market rises.  Selling Short is a way to bet against a stock and make money when the price goes down.  It is not an easy concept to understand but I will do my best to explain it.

Sell Short:  Bet Against the Market

In a typical ideal stock trade you would buy 100 shares XYZ for $10 and sell it for $20.  You would make a profit of $10 per share or $1,000!  Simple enough and I think we all understand this most basic concept of buying low and selling high.  But what if you think a stock’s price will fall?  Should you avoid the stock and look for another opportunity?  Or you can bet against the stock and try to profit from the loss in price.  I will start by explaining the process and then explain the risks.

Sell Short: How to

So let’s say that stock you just cashed out for $20 per share starts to fall in price.  You would go to your brokerage and select the stock symbols like any other trade.  Next, select the transaction type or action.  We are all familiar with the buy and sell but, today, we will use the other options, “short sell” and “buy to cover.”

For your action select “Sell Short” this will tell your brokerage to sell 100 shares of XYZ on the market and give you the cash, lets say they were still $20 the brokerage would give you the $2,000.  You now owe your brokerage 100 shares of XYZ.  You have borrowed the shares from your brokerage and you will need to return them.  It doesn’t matter if you return the same share or some different share as long as you return the same amount of share. If you lend a friend $20 with a $20 bill you are happy to get paid back whether it by 2 $10’s or 4 $5’s.  As long as you get the $20, you are good.  The same concept applies to the brokerage; as long as you return the shares, they are happy.

As the price of the stock declines to $10, you will execute another trade.  This time select “Buy to Cover,” do the same 100 shares for $10 each and you will buy the stock back for $1,000.  The shares will be returned to the brokerage and you are left holding $1,000 in profit!

The Recap

Get it? Borrow shares and sell them, you hold the cash.  When the price drops, go buy them back and return the shares to the brokerage you borrowed them from.  The difference in price is yours to keep!

Sell Short: The RISK

When you execute a normal trade, also referred to as a “Long” trade, your losses are limited to your investment.  For example, if you buy 100 shares for $10 each you are invested for a total of $1,000.  If the stock goes to zero you lose that $1,000.  On a short sale there is no upward limit, so if you “short” a stock worth $10 and it goes to $20, you lose your investment of $1,000.  If the price goes to $25 you are actually in the hole for an additional $500.

There is a horror story of a man who invested $38,000 into a short of a failing pharmaceutical company.  The same day they were acquired by a larger competitor and price skyrocketed over 800%.  This man was on the hook for not only the $38,000 he put in, but also $250,000+ in additional losses.  So, if you decide to do any short selling, make sure you put a safety stop in place.  If you don’t know how to set a safety stop, you don’t need to be shorting any stocks.

My Play

On 4/3 I made the following transactions:
Sold Short 200 share of TCS for $5.70 each, total cash received $1135.00
Bought to Cover the same shares for $5.63 each, the total cost of $1130.95

I pocketed the difference $4.05 about 0.3%.
As my first short sale I can’t complain, I turned a profit and added another tool to my toolbox.

 

Check back next week for a recap of all the trades I’ve made over the past few weeks, I made more than I lost!

Thanks for reading and happy trading!

Spotify: IPO by Owner

Spotify had it’s IPO and yes I’m in!  In a rare move, they listed directly on the exchange with no bank to stabilize the release.  The executives didn’t even show up to ring the opening bell.  Unconventional is an understatement.  Keep reading to see if I made any money and what the future brings.

 

Spotify: Direct list IPO

Spotify, the most popular music streaming company in the world, had its IPO this week.  An IPO is an Initial Public Offering, making the jump from a privately own company to a publicly traded company.  They broke all the traditions by listing directly on the New York Stock Exchange (NYSE).  Spotify didn’t raise any money on their IPO, either.  Despite the fact that this is one of the most anticipated IPOs of the year, the executives did not come to the exchange to ring the opening bell and participate in the usual festivities.  For Spotify, it was another day at the office.  For Wall Street, it was a big deal.

In a typical IPO, a bank will essentially buy all the shares from the company for an agreed upon price, then list them to an exchange for a higher price.  Markets, as we all know, are volatile and the banks making these IPOs take a lot of risks but have a chance to reap huge rewards.  Many times the banks processing the IPO can pocket billions of dollars on the day of the IPO.  The best way to think about these banks is like a real estate agent, they handle all the paperwork and legality in exchange for the opportunity to make large profits.  One more thing to note, most of the time, the early investors in the company can’t sell their shares for a set amount of time, typically 60-90 days.  This helps stabilize the price in the early days of trading.

One main advantage of having a bank list your shares to an exchange is they will release them and buy them back to help keep the price stable in the first few days and weeks.

Direct Listing

Spotify has many investors who already held shares on a private market; reports stated that they were trading between $132 – $138 per share prior to the IPO.  Spotify did not sell any of the equity it held on the day of the IPO.  Therefore, Spotify did not raise any money.  They said they had enough cash on hand and don’t need more right now.  I took this as a positive sign that the management team believed they were close to being profitable.

Since there was no bank to list the shares and Spotify had no shares to sell, it was left to the early investors to sell their shares.  Early investors included large banks like Goldman Sachs and media companies like Sony.  There are many private individual investors, too.  For this IPO it is up to the early investors, individuals and organizations, to sell their shares so investors in the public exchange, you and me, can buy them.

The Day of the Listing!

4/3 started off with stocks opening higher than the previous day’s close.  The NYSE listed the symbol SPOT and set a beginning price at $132.  As with most IPOs, no shares were available to trade immediately after the opening bell.  As the morning wore on, the anticipated opening price began to rise, $140, $150, $160 and finally to $170.  When the shares first became available at 12:40 PM the opening price was just above $165 per share.  The price went up to $169 within the first 5 minutes.

Quickly, the price began declining.  Several traders I know eyed the $150 mark as a good buy-in point.  I was more cautious, I set a limit order for 56 shares at a price of $140.  My thought process was that since on the private market the highest price reported was $138, it would be a good value in that area.  It took every nerve in my body to not buy any shares on that opening day.  The price closed at about $150.

4/4 my bet came through!  The next morning the stock opened lower, right at $140!  My order was executed and I am the proud new owner of 56 fresh shares of SPOT, my total cost was $7,844.95.  The price did dip lower to almost $135 the same day but it closed at $146.  I was in the black already!  At writing the price seemed to have found a home between $150 & $155.  My profit is around $700 right now.

Final Thoughts

I did make many other trades this week but decided to highlight only the most significant one.  Here are links to all my transactions and my current holdings.  You can see every move I’ve ever made there.

I was very pleased with my discipline and ability to stick with my original plan and not follow others.  Had I bought SPOT at $150 I would have left $560 on the table.  Sticking with my original plan helped me make a better trade and be more profitable on this odd IPO.

Feel free to ask questions in the comment box below.

Thanks for reading and Happy Trading!

Wall Street: A Visit to the Financial Center of the World

The New York Stock Exchange (NYSE) is located at 11 Wall Street, New York, NY in lower Manhattan.  This area, for obvious reasons, is known as the financial district.  Historically, it is a crossing for our Federal Government and the financial markets.  Today, although some activities are still conducted here, the vast majority of the transactions and interactions take place online and a physical presence on Wall Street is not as important as it used to be.  Today more than $21 trillion worth of stocks are based out of this building.

A wall, yes that is why it is called Wall St, once stood directly in the middle of Wall Street.  The wall kept the natives away and allowed European businessman to trade in lumber and firs without fear of attack.  In the picture below, you see those rectangles in the middle of the street? This is where the original posts once stood.  Though it was considered a wall at the time, we would call is a fence today.

The Structures

JP Morgan has a a building there that still bears scars from a little-known terrorist attack that occurred in 1920; more on that soon.  At 40 Wall Street stands what was once the world’s tallest building but was soon over taken by the Chrysler building and then fell in the rankings again after the Empire State building’s completion.  It was originally built to be the headquarters for The Manhattan Company, which eventually merged into Chase Manhattan Bank.  Today, that building is known as the Trump Building, not to be confused with Trump Tower in mid-town that contains President Trump’s residence.

Trinity Church is actually the third structure to stand on this site and be called Trinity Church.  The first was the church of England and faced toward the Hudson River.  The second structure faced Wall St. and was standing during the foundation of our nation.  Washington, Jefferson and Hamilton were regular worshipers,  Alexander Hamilton is actually buried on the property, I’ve included a photo. The current structure is the third, it was built to replace the second after damage from a massive snow storm.

Hamilton was a strong influence on our financial system from the founding until his death.  If it wasn’t for him, every state would likely have its own currency.  Hamilton believed in a strong central financial system while many others thought it was best to leave it to each state.  Hamilton got his way.  Today some powers belong to the Federal government while other are left to each state to decide.  The decisions of who got what were hashed out on Wall St between the Federal Hall and Trinity Church.

Government & Finance

The Federal Government has the Federal Hall there, too.  Adorned with a statue of George Washington, this historical building is now a museum for all to enjoy.  It was the Federal Government’s first capital, where President George Washington was as they tallied the votes from our first election.  President Washington was inaugurated in this building.  The first congress met here and hashed out the constitution with Ben Franklin and Thomas Jefferson, to name a couple.  The Bill of rights was written in this building.  Today there is still a strong relationship between our federal government and the financial sector, not too surprising to see that they built buildings next to each other at the foundation of our nation.

The Market & Tour

Today, most transactions take place online and the trading floor is restricted to employees only.  Still, the work done here does support the financial markets around the world.  The NYSE is the largest stock exchange in the world.  From the original fir traders that pre-date the United States, there has always been trading happening here.  The markets are connecting buyers to sellers and allowing transactions to take place.  The now defunct Leeman Brothers had a building here across from the cotton exchange.  We know them as a the 100+ year old financial institution that went bankrupt during the great recession.  However, they had humble beginnings trading cotton and turning a profit.

The tour we took was called The Wall Street Experience.  We took the “insiders” tour.  The tour was scheduled to last an hour and 15 minutes, but lasted about an hour more than that.  The guide was very knowledgeable but was hard to hear especially with all the construction going on around us.  He did drone on about some of his personal experiences for a long time.  Most had little relevance and seemed to detract from the overall experience.  We did learn a lot when we were able to hear and did enjoy the tour overall.  I would not do it again, but as a one time experience it was worth the $35 price tag per person.  Here is a link to their website if you have plans to travel to NYC.

The Attack

On September 16, 1920 a horse and buggy was abandoned just before noon on Wall St. between Broad and Williams.  As the bells in Trinity Church toned at noon signaling a lunch break for many, the buggy exploded.  100 pounds of dynamite propelled 500 pounds of window weights through the air of the busy street.

The explosion killed 38 people and damaged the surrounding buildings.  JP Morgan’s building still bares the scars, I’ve included a photo where you can still see where chunks of concrete are missing from the wall.  The Federal Hall and the building currently known as the Trump Building  were also damaged. Miraculously, the statue of George Washington was untouched.

The case has never been solved, although the authorities and historians mostly agree that it was carried out by Italian Anarchists.  Attorney General Mitchell Palmer pushed to deport virtually all Italians from the country in years prior to the bombing.  He used the tragedy as an example of why they should be deporting more Italians.  After several months without a conviction or another attack, the public grew weary of the rounding up of Italians and the practice ended.  AG Palmer faded from public image not long after many considered him a strong candidate for President.

The Result

The 38 victims were mostly under 30 years old.  Although powerful men from the government and banking industry were likely the target, the victims instead were messengers, stenographers, clerks, and brokers.  The victims were everyday people who put in a hard day’s work and provided for their families.  The bombing was the last gasp of a dying militia instead of the call to arms they sought.  It also ended the practice of rounding up and deporting people based on their race and political ideology.  This bombing happened nearly 100 years ago and has never been solved.

“Those who do not learn from the past are doomed to repeat it.”
-George Santayana

The Original Ticker

On a lighter note, it was incredible to see how technology has changed the way information is conveyed and the market works.  These days when you want a current stock quote you can check any number of websites that will happily share the information for free.  I use Yahoo! Finance a lot but Google, FOX, and CNBC offer similar services.

The Ticker Tape machine was a radical new invention.  Patented and produce by the Edison Manufacturing Company, the machine used telegraph technology to transmit stock information to offices around the city and eventually around the world.  The picture I included is of one I saw at the NYC Museum.  This link will take you to a video of one being operated in modern day.  There is no information being sent to these machines so the text is gibberish but you can see how it works.  The operating starts around minute 3 if you don’t want to nerd out too much.

Final Thoughts

It’s good to see how things started because it helps to better understand where things are going.  At Wall Street’s foundation, powerful entities centralized power with physical locations.  Governments and the financial markets were, and still are in many ways, directly tied together.  Today, we have decentralized cryptocurrencies, which was not backed by any government, and exists without any regulation in many cases.  The landscape is changing but it has never not been changing, either.  If you are in NYC, stop by and see the exchange and other sites. You won’t regret it.

 

Thanks for reading and happy trading!

The Bear Market

Let me start with the basics, not the birds and the bees, the bulls and the bears.  Bulls and bears are common references on Wall Street and within all financial markets.  When a bull attacks it thrusts its horns up, when a bear attacks it will swat downward.  So we refer to increasing prices in the market as a bull market and decreasing prices as a bear market.  Bulls go up, bears go down.  Sometimes you will hear traders talk about them like sports teams, saying “the bulls have GE this morning and are charging higher.”  Another example is “The bears took control late in the day and TSLA ended up closing down.”

The thing to remember is bulls go up and bears go down. Congratulations you have added to your knowledge of the stock market!

Investing in a Bear Market

Last week the markets were only open for 4 days; Friday the markets were closed for Good Friday.  The short week in the market was not without its fair share of drama.  The markets opened on Monday with some of the most impressive single day gains the market has ever seen.  Still, after the massive sell-off the Friday prior, many experts are warning of an impending decline.  The markets are mostly flat for the year to date and are having trouble maintaining any momentum.  This should not worry investors; if you are in it for the long haul, don’t worry about this impending decline that may or may not happen.  The only thing you should be trying to do is invest more into the market, because all the stocks are now on sale and might get further discounted in the coming months.

Dow Jones Year to Date

In my IRA I am investing by stashing money away for the long haul and riding the waves of the market. I have been getting out of individual stocks and looking exclusively toward investment funds.  If you want to learn more about investment funds follow this link to my post on that topic.

IRA Transactions

3/27
Bought 1.658 shares for PRGFX for 66.36 each, total cost $110.00

3/28
Sold 51 shares of NTDOY for $54.80 when it hit its stop-loss price.  Total sale $2,789.77

3/29
Bought 43.551 shares of PRGFX for $64.04 each, total cost $2,789.00
These shares were bought at a much lower rate than earlier in the week.  In my eyes this is great because I got more for my money.  These shares will not be sold for several years so when the market contracts I always try to buy more of them.

3/30
Contributed $110 from my paycheck

Trading in the Bear Market

I have 2 brokerage accounts which I am attempting to use for short-term profits.  My strategy will be to limit my losses as the markets contract and look for opportunities to profit.  As the market dropped I did set several stop-loss orders and they began executing quickly.

E*Trade Brokerage Transactions

3/26
This was an up and down day, I took the opportunity to buy 489 shares of AMD, $10.22 each, total cost $5,002.04

3/27 The sell-off begins
Sold, 1 share AMZN for $1500.00, total sale $1,495.01
Sold, 489 shares AMD for $10.42 each, total sale $5,090.25
Sold, 48 shares ARKW for $50.00 each, total sale $2,394.98

3/27 I did try to make a few day trades without much sucess
Bought 16 shares of NFLX for $304.05 each, total cost $4,869.75
Sold the same share for $300.00 each, total sale $4,794.93, a loss of $74.82
Bought 488 of AMD for $10.20 each, total cost $4,982.55
Sold the same share for $10.05 each, total sale $4,899.27, a loss of $83.29

3/28 the sell-off continued as more of my positions met their floor (stop-loss target).
Sold 16 shares of TSLA, $263.92 each, total sale of $4,217.67 a loss of $757.12
Sold 50 shares of WDC for $91.50 each, total sale of $492.52 a loss of $492.52
Sold 76 shares of MU for $51.50 each, total sale of $3,928.95 a loss of $731.21

As the sell-off continued I looked for oppertunities to buy some stocks.
Bought 3 shares of AMZN for $1,437.91, total cost $4,318.67
Bought 162 shares of SH for $30.91 each, total cost $4,984.83

SH is an ETF that takes broad shorts of the market.  Shorting a stock is a process that allows you to bet that prices will go down.  I will be making my first short trade this week, so don’t forget to check back.

Robinhood Brokerage Transactions

3/27
Sold 4 shares of WMT for $85.91 each, total sale $343.64
Sold 19 shares of BAS for $14.14 each, total sale $268.68
Sold 20 shares of AMD for $10.00 each, total sale $200.00
Sold 3 shares of TSLA for $278.04 each, total sale $834.11

3/28 I saw an opportunity for a day trade
Bought 400 shares of GERN for $3.68 each, total cost $1,472.00
Sold the same shares for $3.96 each, total sale $1,582.00.  Profit of $110, 7.4%

Final Notes

At the end of the week I was holding more cash than usual and watching to see what the market was doing.  Virtually every one of these stocks that I sold have dropped lower.  Being that I am an active trader I will watch for opportunities to buy back in at a profit from these stocks as they begin to rise again.

This year I have lost about $1,500 in the market.  I am, however, learning the process and I knew I would have to trade in a down market at some point.  Bear markets are a natural part of the stock market and traders need to know how to trade them.  Bull markets are easy, I made over $5,000 last year just getting started.

The market may stabilize soon if the trade war settles down.  I mentioned last week that there are no real winners in war.  American businesses are extremely resilient but the uncertainty coming from the current administration does have far-reaching effects on the market.  Trump may get us in a better position in the end, time will tell.  The markets hate uncertainty and as long as our trade policies are up in the air, be prepared for choppy waters.

Check back later in the week for my story of my visit to Wall Street, I even got to see where the wall once stood!

Thanks for reading and happy trading!  Please post your questions below.

Trade War Ignites

It’s been a rough week for the market.  The DOW ended the week below where it started at the beginning of the year.  It was the worst week the market has seen in some time.  This week was also the week I decided to expand my account to a margin account.  A margin account allows you to borrow money from your brokerage and trade with it, and keep the profits after you pay the brokerage fees.  Read my full margin review here.  The end of the week had President Trump fire the opening shots of a trade war, we will consider those impacts at the end.

In The Margin

The process was fairly simple, in my E*Trade brokerage I requested that my account by upgraded.  The application was all online and it was approved within a day.  E*Trade will loan you up to the value of your account, so I received about $20,000, available on loan or in margin.  I took a few hours off of work on 3/19 and 3/20 to try some large day trades.  Here they are:

3/19 Trading:

I tuned into the trade-ideas.com webinar for some ideas.  They have a free webinar with an excellent day trader telling you his every move for free!  That concept sounds familiar…

Bought 105 shares of MFGP for $14.44 each, total cost $1,523.15
Sold the same shares for $14.78 each, total sale $1,544.90.  Profit of $21.75, 1.4%

Bought 360 shares of GERN for $4.16 each, total cost $1,503.29
Sold the same shares for $4.15 each, total sale $1,486.39.  Loss of $16.90, 1.1%

3/19 Recap

This was my first real attempt at actively engaged day trading and it worked!  I actually turned a profit and stuck to the rules of getting out of a losing trade quickly.  While I have not completely figured out the best way to pick a stock, Trade-ideas.com offers some great insight and it’s completely free! I have begun listening in, even when I don’t have time to trade.  It is very educational and informative if you want to know how day traders actually make their selections.

3/20 Trading:

Sold all 33,000 shares of HEMP that I had held for several months for $0.02 each, total sale was $687.40.  This stock had not produced much profit and while it may be a good one in the long term, my goals are short term right now.  More on that in a moment.

Bought 118 shares of KTOS for $10.11 each, total cost $1,197.47
Sold the same share for $10.05 each, total sale of $1,180.91.  A loss of $16.56, 1.3%

Bought 162 shares of AMD for $11.10 each, total cost $1,806.13
Sold the same share for $11.22 each, total sale $1,812.62.  A profit of $9.49, 0.5%

3/20 Recap

While I didn’t make a profit, I did manage to make a profitable trade.  One lesson I heard before beginning any day trading was, you have to learn to lose before you can turn a profit.  I understand now that the idea is to limit your losses and not chase things down a rabbit hole.  Be a surfer, not a salmon.  Surfers ride the waves and don’t question where they come from and why they happen.  Surfers recognize the wave when it arrives and ride it for a limited amount of time to get what they want.  Salmon swim against the stream sometimes get eaten alive trying to get back a few more inches.  While many do still make it where they are going, it is a lot of work to get there.  As a trader you want to be a surfer.

Swing Trading:

True day trades, bought and sold on the same day, are restricted by the FINRA, or Federal Industry Regulatory Authority.  You can only conduct 3 per 5 business days if your account is less than $25,000.  This is to prevent people from losing their entire life savings by wildly trading in the market.  The next level up is called Swing Trading.

Day Trade: Position bought and sold on the same calendar day
Swing Trade: Position held at least overnight, up to several weeks, typically less than a month.

My focus is now on swing trading.  I will use the margin account to leverage my skills and knowledge in an attempt to grow my account to $40,000.  $25,000 as the day trader minimum. $10,000 for a cushion to allow me to have some losing days with dropping beneath the $25k minimum.  $5,000 for a new computer and home office setup.  Once this level is reached, I will transition to a full time day trader.  Don’t worry, I’ll always be a night blogger!

Swing Positions:

3/21:
MU was scheduled to release its earning report the next day.  Every analysis was predicting great things, every indication was that the company would have positive news, so I increased my position with an additional 57 shares for $61.20 each, total cost $3,493.20.

The next day everyone was right!  MU was more profitable than ever!  The outlook was great as demand for their products was increasing, driving up prices and profits!!  The stock plummeted!  Dropping like a rock after a great report.  What caused this?!?!  I should be rich right now!  The simple fact is there were more sellers than buyers.  The laws of supply and demand are always on in the market.  Sometimes when large institutions buy or sell lots of stock it will have serious impacts on the price for a short period.  This is one reason the market is not for the faint of heart.  My best guess was that a larger player was taking profits.

My Next Moves:

I decided to do an industry double down.  WDC is a competing firm of MU.  Both manufacture and produce microchips that are essential parts of our cloud storage and computing abilities.  Demand is rising and supply is struggling to keep up.  That means the price will rise; remember supply and demand!

Bought 50 shares for $101.90 each, total cost $5,099.95

I saw the price drop and then begin to rally.  I decided to make a quick day trade, too.

Bought 50 additional shares of WDC for $101.15 each, total cost $5,062.45
Sold those 50 shares for $101.23 each, total sale $5,056.42.  A loss of $6.03, 0.1%
Even though I did sell at a higher price than I bought in at, it was not a big enough gain to overcome the brokerage fees.

TSLA had fallen to near its year low after news of more production delays.  Analysis always predicts doom and gloom but customers are not canceling orders.  As long as the demand stays strong I believe this is a good stock, this was a buying opportunity.

Bought 16 shares of TSLA for $310.61 each, total cost $4,974.79

Final Margin Notes

I exceeded 30 trades per quarter in my E*Trade account, and they now charge only $4.95 per trade, down from $6.95.  This is in line with the lowest prices I have seen advertised.  E*Trade is not the most highly recommended brokerage out there but right now it has everything I need.  For these larger trades I prefer using a desktop and Robinhood is only available on the smartphone app right now.

On Friday 3/23 I made my typical contribution of $50.

E*Trade IRA Summary

I had a little bit of cash in that account.  Seeing that the market was having a rough week I wanted to get more mutual fund shares as cheaply as possible.

3/21 Bought 1.906 share of PRGFX for $67.63 each, total cost $128.90

3/22 Recived a dividend of $5.00 from the MJ ETF

3/23 Contributed $105 to the account.

Robinhood Summary

3/19 Bought 1 share of TSLA for $317.43.  In hindsight I should have waited to buy this, but I believe the price will rebound within a few weeks.

3/20 Bought 20 shares of AMD for $11.17 each.  This stock tends to be fairly volitile, I hope to be able to sell it above $12 within a week or two

The Trade War

I took Friday off of my day job and was hoping to make some more day trades.  The President had other plans; the day prior he announced $60 billion in new tariffs with our largest trading partner, China.  This announcement rattled the markets sending them into a tailspin.  I decided to sit the day out and not go swimming with the sharks.

A few notes on the trade war.  First, there are hardly ever winners in any war, typically all sides suffer.  Second, President Trump is more predictable than some people think, at least in terms of his negotiations.  The $60 billion in new tariffs was an opening of negotiations.  In the past, Presidents have negotiated these deals quietly out of the public eye and announced the final agreement once it was hashed out.

Our current President is a showman, he enjoys making a scene and being the center of attention so long as its on his terms.  Announcing new tariffs is not necessarily a bad thing.  China does need to be reigned in, and previous administrations have failed to produce any real results.  However, signing a law into effect as part of a negotiation fails to provide certainty to the US markets as well as the Chinese.  Imagine you were playing a game and half way through the referee decides to change the rules.  That means you need to suddenly change your strategy, maybe even your team.  American businesses are extremely resilient. When handed a set a of rules they will find a way to be profitable.  Changing those rules constantly causes unnecessary pain and limits business investment in their future since they are unsure how they need to invest.

Ending a trade war is not easy, much like it is not easy to end a real war.  The wars in the middle east have been raging for 17 years with no end in site.  President Bush (W) declared “victory” in Iraq in 2003 but the war still continues today.  With any war, it is over when both sides say it’s over.  Both sides always get a vote.

Thanks for reading & happy trading!
Please feel free to post questions or comments below.

The Early Bird gets Rich on Bitcoin

The world is still figuring out what to do with Bitcoin and the rest of the Cryptocurrencies.  Several people have become millionaires from making early investments.  The question now is, will it make more millionaires, or will it go the other direction?

If you are interested in learning more, I highly suggest you take the time to read The Early Bird Gets the Bitcoin.  The book is written in plain language by a very smart author who is only 11 years old.  Don’t discount this book because it is written in simple language that a kid can understand.  I personally read this over the course of about a week and knew that I needed to be more involved in cryptocurrencies if I wanted to be part of the future of investments.  I’m not going to give a book review or summary here. Spending a few hours reading about the crypto market and understanding the process is essential before you invest.

The fact of the matter is, blockchain technology that supports cryptos is here to stay.  It has and will continue to make our digital lives more secure and safer.  There is a never-ending battle between those who hold our data and those who want to steal it.  Blockchain technology is giving a huge advantage to those trying to secure it.  Data breaches have become commonplace, almost daily we are reminded that putting out personal information is dangerous.  The recent scandal coming from Facebook over data breaches is just the latest in an ongoing trend.

Got to be in it to Win it!

After reading the book and my reading about cryptos for the past few months, I decided this was the time to invest.  I have made few rules for myself.

  1. Cryptocurrency investments will be limited to 5% of my portfolio.
  2. I will diversify my crypto investments into different coins or currencies.
  3. Crypto investment will be used to reach my short-terms goals and cashed out when those goals are met. The current short-term goal is $40,000 outside of IRA.  I’ll discuss that more in the upcoming trade war post.

On 3/14 I took the remainder of the large side hustle income, about $1,500, and began investing in CryptoCurrencies.  I am using Coinbase to hold them for me.

I do not intend to actively trade any of these.  Instead, I will let everything sit and see where the value goes.

Currencies purchased:
2.935207 coins of LiteCoin (LTC) for $167.85 each.  Total cost was $500 including $7.34 fee.
0.742426 coins of Ethereum (ETH) for $662.58 each.  Total cost was $500 including $7.34 fee.
0.056332 coins of BitCoin (BTC) for $8745.68 each.  Total cost was $500 including $7.34 fee.

At writing on 3/29, the prices have fallen well below and risen well above the price I paid.  Today my total is $1,077, down about $423, a little more than 27%.  Follow this investment here at my Current Holdings page.  I update this page weekly with the total investments I have in my portfolio.

The Future of Bitcoin

I will let you in on a secret right now, anyone who tells you anything different is speculating or lying.  No one knows what is in store for Bitcoin.  The CEO of Twitter suggested it will be the world’s only currency by 2028.  We heard similar predictions about the EURO when it began, it didn’t happen then.  Some analysts have predicted it will rise to $60,000 by the end of the year.  Others have predicted a crash to $1,000.  Some might be right, sometimes.  Much like the stock market, no one is right all the time.

Analysis, traders, investors, and people are all wrong sometimes.  The market is perfect and the market is always right.  The market will determine the future of Bitcoin and the market is always right.  As a small portion of a well-diversified portfolio, cryptocurrency is a good addition.  I would not put more than 5% of my portfolio into that market right now.  I would not have Bitcoin or any other cryptocurrencies as my only investment.

Stop-Loss & Big Names: Telsa, Walmart, Netflix

E*Trade Brokerage: 3/12 Telsa, Walmart, Netflix

As the week began, I saw that Netflix (NFLX) had been gaining very quickly since I purchased it about a month ago.  From $260 to $330!  I was looking at the charts and the growth looked ridiculous; too much too fast.  I didn’t think it was sustainable.  Not long after that, analysis started calling for a price correction.  I set a Stop Loss* Order for $325 which executed a few minutes later.  I cashed out a profit!

Sold 5 shares of NFLX for $324.73 each, total cash was $1,616.66.  A profit of $309.71, about 24%.

Looking to reinvest, I remembered that Tesla (TSLA) was trading around $325 the last time I checked.  Good news, more good news and bad news on that front.  The good news was, the price was already climbing fast.  The more good news was, I already held 4 shares that were making profits as the price rose.  The bad news was, it was too late to buy more shares because the price was near its peak level of $350.  With little room left to move up, I decided this was not the best trade right now.

Keeping up with Amazon

Walmart (WMT) had been trending down lately, so I took a small position in my Robinhood account hoping for a quick turnaround.  This has failed to materialize and the stock has continued to fall.  The price has seemed to reach a floor level around $88.00.  Walmart has been pushing its online sales hard to try to keep up with Amazon (AMZN).  While they have struggled to keep up they have been making some gains.  WMT recently launched a new line of clothes for men, women and children; this is an attempt to compete directly with Target (TGT).  This line was just launched and we have no numbers to tell us how well it’s been doing yet.  This looks like the perfect time to take a gamble since I have 2 ways to win!

I bought 24 shares of WMT for $88.63.  The total cost was $1,059.07.

E*Trade Brokerage: 3/15 United Airlines

At the end of the day on 3/14, there came a breaking story about United Airlines (UAL).  A dog had died in an overhead storage bin on one of their flights.  This sad story brought additional scrutiny upon the airline as they have struggled to recover their image.  A few hours later another story broke, they flew a dog to Japan that was supposed to go to Kansas.  Neither of these stories were helping United’s image as an airline working hard to make no mistakes.  I had purchased stock in UAL a few months ago when I believed they were recovering their image, read about that here.

The Dogs

As the media dug into reports of animal deaths on airplanes, it was revealed that there were 24 reported last year.  18 of which occurred on United.  This did not bode well for me and my family as we are a dog family having 2 pups ourselves.  My wife asked me about an upcoming trip we had planned and who we were flying with.  The trip is still on schedule since we are flying American Airlines (AAL).  We decided to sell the stock simply because we don’t want to be involved with a company that has such a hard time keeping animals safe while flying.  Being that UAL was involved in 75% of the animal deaths that occurred on airplanes last year, this indicated a potentially major problem, not just an isolated incident.

I sold all 15 shares of UAL for $71.07 each, total sale was $1,059.07.  A profit of $11.72, about 1.1%.

E*Trade Brokerage: 3/16

Micro Technology Inc (MU) is a semiconductor manufacturer that has been steadily rising for the past year.  I heard about this stock from a friend who is a full-time day trader.  He told me he was expecting it to make some gains after the earnings were released on 3/22 and any price under $60 was a good place to buy in.  I decided to take the extra cash I had from the sale of UAL and invest in this stock.

I bought 19 shares of MU for $60.00 each, total cost $1.146.95

Robinhood: 3/13

ROKU had not been doing well.  The next news coming was a flood of additional shares into the market.  I believed that this could send the price downward even further.  It was time to cut my losses.

I sold 10 shares of ROKU for $37.75.  Total sale was $377.51, loss of $53.39, about 12%.

HTBX, one of the volatile stocks I have been watching, was down but seemed to be trending upward.  I decided to try and execute a day trade for some quick profits.
I bought 186 shares for $2.05 each, total cost $381.11.
This sold with a stop-loss* order for $2.02 about an hour later. Total sale was $375.79, a loss of $5.32, about 1.4%.

Although this trade lost money, I did keep my losses to a minimum and exited the position before any major damage.  I think I am slowly learning the techniques.  You need to protect your bankroll from losses by taking a small loss the same day rather than holding a position for week or months trying to get back to even.  Setting stop loss* orders protects your funds from getting tied up for a long time and taking large losses.  More on Stop-loss orders at the bottom of this post.

Robinhood: 3/14, Happy Pi Day!

I was eyeing some volatile stocks again on my lunch break.  I saw that Dick’s Sporting Goods (DKS) was appearing to start an upward charge.  It made the following transactions:

I bought 10 shares fo DKS for $33.75 each.  Total cost was $337.50.
Limit sale of all 10 shares for $34.00 each.  Total sale was $340.00, a profit of $2.50, about 0.7%.

I had one of the side hustles send me a check which contained a handsome profit.  I contributed $450 to my Robinhood account.  This is the maximum I intent to contribute to this account for the time being.  To date, I have lost $150 of the $2,000 I have contributed.  You can see all the details in my current holdings and transaction list.  I want to make some solid gains with this amount before I add more.

Telsa (TSLA) made more headlines as there were more reports of production delays on the model 3.  Earlier in the week, the price had risen to almost $350, this news caused the price to slide back near $325, my buy level!

I bought 2 shares of TSLA for $326.49 each, total cost was $652.98.
Limit sale for $340 was set.  At this writing, the sale has not executed.

Robinhood: 3/16

Trade-ideas.com hosts a free Day Trading chat room with lots of good info on day and swing trades.  They offer paid services but the chatroom is free, just create an account and log in.  I like to listen in while I’m at work if the office is empty. CHD was stock mentioned there first thing in the morning.

I bought 3 shares of CHD for $49.96 each, total cost $149.88.
Stop order for $49.85 was placed at the end of the day.  Total from sales was $149.55, a loss of $0.33.

Limit order for BBG sold at $4.85 per share, total sale was $378.30 a profit of $3.90, about 1%
I had held this stock since 3/6 and when the opportunity to take a small profit presented itself I took it.  The original limit sale was set at $5, I changed it the day prior when I saw the price was starting to recover.

So despite taking some losses and some smaller profits than originally hoping for, I feel good about the past week of trading.  I am beginning to set some rules to guide these short-term trades, which will enable me to be more profitable in the very near future.  In the short-term, stocks are essentially unpredictable.  When you expect them to move one way they might end up doing the opposite.

Cash Management

While you might be right about a stock and it will recover eventually, you are tying up available capital when you hold a stock for a long time.  As you well know, you must have money to invest.  Having that money sit in one position waiting to get back to even is not good money management for short term trading.  If you are holding a position for the long-term, a momentary paper loss for a few weeks or even months is not a bad thing.  If you are looking for short terms gains, you should keep your money in accessible positions.  My initial rule is to limit any loss to 1%, whici is what I have begun setting stop-loss orders at, 1% below my buy-in price.

*A New Tool: Stop-Loss

*Stop-Loss Order: This is an order that causes a sale to happen automatically, much like a limit sale.  A Limit Sale sells a stock when it reaches or exceeds a price you predetermine, read more here.   A stop-loss order helps you STOP the LOSSES.  It is a floor price that you set; once the price is reached, the sale happens automatically.  I use these orders when I am trading to limit the loss I take on an order.

Typically, I set it 1% below my buy-in price.  I also use it to protect my profits.  When a stock keeps going up and up, I don’t want to leave profits on the table, so I set a Stop-Loss order well above my buy-in price, but below the current price.  If the stock suddenly reverses direction, I lose a minimal amount of money.  One thing to keep in mind is that the stop-loss order turns the order into a market order when the price is reached.  So the price you set might not be the exact value the stock sells for because the trades take a few seconds to execute.  Typically this is the difference of a few pennies but with extremely volatile stocks it can be more significant.

  Contributions:

As mentioned above, I contributed $450 to my Robinhood account.
On 3/16 I contributed $50 to my E*Trade brokerage account and $105 to my IRA.

 

In coming weeks I will make a trip to Wall Street, invest in more cryptocurrency and watch the Spotify IPO!!

Thanks for reading & happy trading!