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Trading Focus and Strategy: Making the Right Moves

The last 2 weeks have been challenging and gut-wrenching.  I have watched as my penny stock investment moved toward a $10,000 loss and, at least on paper, my goals seem further out of reach than they were before.  But after reviewing some of my previous trades I believe I am in a good position to have a major bounce back if I can stomach the roller coaster ride.  I am concentrating on keeping strong trading focus and strategy in place and not deviating from the path I am on.

As the share price sank some good news appeared, a related company with close ties to UITA filed financial reports with the SEC (Security and Exchange Commission) increasing the legitimacy of the company and the faith that the management has their act together enough to create a profitable company.  This gave me enough faith to make additional orders.

On 6/4 I bought 300,000 additional shares for $0.004 each, a total cost of $2,177.40.

There is more to this story and as I have always promised, I will share it all.  Since the trade is still active the results are uncertain, I am withholding some details to discourage anyone from engaging in the trade with me.  While my story is just that, my story, it is never advised but you are welcome to match my moves.

Penny Stock Review

In the weeks prior I purchased 1,000,000 shares of UITA, an up and coming company that has ties to the airlines.  The price has dropped far below it’s high of $0.017 to closer to $0.005, losing about 2/3 of the value.  Stocks that trade around and below a penny can be extremely volatile and this appearance can be extremely hard on the nerves.  You watch as the price sinks and a loss of a few hundred can quickly turn into a few thousand.

Good news came for UITA shareholders.  A related company with close ties to the UITA filed its required reports with the SEC (Security and Exchange Commission).  This increases the legitimacy of the company and the likelihood that the management can indeed turn a profit one day.  This gave me faith that my investment is good.

I am being purposefully vague and holding back a lot of details of this trade.  I will tell the whole story after the trade is no longer active.  A large part of this blog is sharing every detail of why I make the trades I do.  I don’t provide financial advice, only my story.  You are welcome to follow my trades and if you like one follow along, but realize it’s always at your own risk.  This trade is so incredibly dangerous I am purposefully discouraging anyone from following along.  I will tell the full story after I have the ending, whatever it may be.

6/4 Bought 500,000 shares of UITA for $0.0044 each, total cost $2,177.40.

Dave and Busters Cash Out

Back on 5/2, I purchased 235 shares of Dave and Busters (PLAY) for 42.53, you can read about that here.  The stock has been a rollercoaster ride, dipping as low as $38.00.  Finally, the stock rebound and went into positive territory.  On 6/4 I cashed out for $43.55 per share, total sale $10,229.13.  This was a profit of $249.60, a profit of 2.5%.  At this writing, the price has climbed further, as high as $56.00.  A win is a win and I will take it and move on, but once again I left money on the table by cashing out too soon.

Trade of the Week

Every week Trade-Ideas.com releases a trade idea of the week, you can sign up for free.  This week it was Shake Shack (SHAK), as it approached an all-time high price there was a large number of short sellers.  The theory is that when the price reaches all-time highs, the short seller are forced to buy their shares at a loss.  The buying drives the price per the rule of economics.  More sellers than buyers makes the price go down, more buyers than sellers makes the price go up.  When short sellers are forced to buy back their shares, it drives the price up.

SHAK hit a 52-week high on 6/6 and I bought 160 shares for $62.73 each, a total cost of $10,041.75.  The target price they gave was $70 per share.  As the week progressed the price rose but then began to retreat.  I sold on 6/8 for $65.26 per share, total sale $10.436.88.  This was a profit of $395.13, about $3.9%.  A solid profit and well executed per the direction of free expert advice.

GOOGLE

I took some time over the weekend to review the most profitable stocks I had traded with.  Amazon (AMZN) was up 60% over the past year, Netflix (NFLX) was up 140%.  Facebook (FB), Apple (AAPL) and Microsoft (MSFT) were also at record levels making records gains.  As the NASDAQ, which has mostly tech stocks, is trading at record highs, the S&P500 and the DOW JONES were about even on the year.

I looked to a stock lagging behind but ready to join its peers.  Google (GOOG) was one of the only major stocks not at an all-time high so I decided this was the stock to make a bigger profit on even if it took longer.  I bought 13 shares for $1,140 each, a total price of $14,824.95.

Final Thoughts and Notes

I have decided to be less active, I have made several bets and I will give them time to play out.  I have some cryptocurrencies, weed stock, a true penny stock, a big name and even an Initial Coin offering.  One or more of these is bound to bring me a large profit.  Please follow this blog to see where this investing adventure goes.

I transferred $2,000 from my Robinhood account to the E*trade leave only about $9 behind.

I contributed $50 and $105 to my brokerage account and IRA respectively on 6/8 and 6/15.  On 6/14 I contributes an additional $125 from my side hustle checking account.

Thanks for reading and happy trading!

Week of 5/28: Holding for the Right Opportunities

Last week I managed to turn a decent profit with some day trades.  I am not able to do that much more because my day job is currently too demanding to do both.  Since I need that income to pay my bills, I must be patient and find the right opportunities to profit.

I have a 1-2 month plan with the penny stock UITA.  I am holding out for some sort of news in June that will send the price through the roof.  With that position showing a loss of more than $4,500 currently, I am deeply committed to this trade.  If it doesn’t pan out it will set me back several months.  No risk, no reward.

Robinhood & The Right Opportunities

I still have my Robinhood account, follow this link to learn about setting up your own. I have invested about $2,000 into that account and currently have about $1,950.  I want to see if I can get it into profitable territory while I wait out some the positions I’m holding in my E*Trade account.  You can always see my current positions and values here.

If you sign up for a free account at trade-ideas.com, you can log into the chatroom and see what actual day traders are trading.  You will also receive a trade of the week every Monday.  I decided to look at the trade of the week and see if I could make some money with it.

The trade came in around 8 am on 5/28.  Microsoft (MSFT) was near an all time high and they said that if it got above $99 per share it could rise significantly more.  They suggested putting a stop at the 50 day moving average, about 5% below the current price.  Typically I like to have tighter stops around 1%.  Lets see if I can combine their idea with my strategy.

The Trades: MSFT

5/29 I bought 19 shares for $98.35 each, total cost was $1,868.65.
I sold those shares with a Stop-Loss order for $97.85, total sale $1,858.97.  A Loss of $9.68.
I didn’t wait for the price to top $99 like the idea suggested, I tried to get in early and it backfired.

5/30, second attempt, I bought 19 shares for $99.08 each, total cost of $1,882.50.
These sold a few minutes later with a stop-loss order for $98 each, total sale $1,862.59.  A loss of $1,862.59.
My stop was too tight, and it kicked out of the trade-in, losing territory.
I decided after 2 failures to leave MSFT alone for the rest of the week.

The lesson I take from this experiment is don’t try to combine strategies.  If it is my strategy, I should play it by my rules.  If I borrow another strategy I need to follow those rules and not try to mix the two.  MSFT ended the week at $100.80.  Had I used the stop they suggested I would have turned a profit.  Instead I’m licking the wounds from 2 losses.

Final Notes and Thoughts

As the week progressed I was still looking for another RIGHT Opportunity to find another swing trade with my Robinhood account.  I got a tip from the chatroom that QTS had been rising and was showing no signs of slowing down.  I bought 50 shares for $34.38 each, total cost was $1,918.95.  I hope to sell these for $45 each.  I was still holding these at the end of the week.

On 6/1 I made my usual contributions, $50 to the E*trade brokerage and $105 to my IRA.

Thanks for reading and happy trading!  Please ask questions in the comment box below.

Week of 5/21: Refreshed and Ready to Profit!

I took last week off of all trading and took some time to reflect on what brought me to this point.  I am coming back in fresh and ready to profit!  Without futher blabbering here are the trades:

On 5/21 I bought 2405 shares of CHK for $4.16 each, total cost $9,999.85.
Sold these share for $4.28 each, total sale of $10.294.85, a profit of $295!  Not a bad start to the week!

On 5/22 I bought 564 share of AMD for $12.83 each, total cost was $7,239.04.
These shares were sold the next day for $13.15 each, total sale was $7,466.78.  Another solid profit of $172.44!  This week is looking better already.

5/23 I bought 982 share of TCS for $7.60 each, total cost $7,466.78.
The price fell and I exited this trade quickly when the price hit $7.50, total sale was $7,357.73.  A loss of $109.05.

5/24 I bought 1,500 share of GERN for $4.77 each, total cost $7,419.77.
Sold them later that day for $4.95 each, total sale $7,419.77.  Another solid profit of $259.97!

The Difference a Week Makes

After taking a week to reflect I came back strong.  I netted a profit of $618.36 with 4 trades.  All these trades were my own and not from the chatroom that I tune into most weekdays.  I am more confident than ever that I am ready to do this full time.  The down side is I don’t have enough cash to make the move right now.  As my workload increases at my day job it is very hard to monitor my trades during the day.  I will not be making as many day trades until I get my bankroll in order.

The next level I need to be at is $40,000 excluding my IRA.  View my current account values here.  Once I’m there I can afford to purchase the required hardware and have a cushion equivalent to 3 months worth of paychecks.  How will I get there you ask?  Penny stocks and swing trades.  I can’t reveal everything yet but I am currently holding 1,000,000 shares of a penny stock, UITA.  We are expecting the company to release news during June.  Right now I have paid around $10,000 and the current value is $5,300.  I am betting that this stock will reach a level much higher than it is right now.  I hope to profit up to $10,000 during the month of June with this stock alone.

Final Note and Thoughts

On 5/22 I sold the GERN that I had held in my Robinhood acount for a profit of $81.37.  That purchase was made on 4/27, so this trade was worth waiting out.  While I bought in at $3.98, the price bottomed out near $3.20 and rebounded to $4.15 where I finally cashed out.  Like I saw in the past week of reflection mos,t stocks will rebound when held long enough.  It does take nerves of steel and it is not an exact science. When playing with highly volatile stocks, you need to have an exit plan in place if things go wrong.

On Friday 5/25 I made my usual contributions of $50 into my brokerage account and $105 into my IRA.

In the coming weeks I will be explaining options trading, a complex subject that I managed a 600% return on my first attempt.  The website is almost ready to go live with a new design, too!

Thanks for reading and happy trading!  Feel free to ask any questions in the comment block below.

No Trades: A Week of Reflection

For the week of 5/14, I decided to slow down.  I’m taking some time to reflect on the journey I began one year ago.  I have no trades to report this week but will be explaining my strategy changes.

The Wins

As I reviewed all the trades I made over the past year, I began by looking at the profitable trades and small losses.  Even though some trades did lose money, I made a quick exit with minimal loss so I still consider those to be winning trades.  Any trade in which I have no more than a 1% loss up to any profit is considered a win in my book.  My strategy is, after I choose a stock to trade, I remember that neither myself or any other person on the planet knows what will come next for that stock.  Being that I don’t know if a stock will go up or down, I must develop a game plan that allows me to make money, in the long run, during my trades.

The plan is to set a “stop,” a maximum loss I am willing to take on a particular stock.  Typically I set the stop around 0.5 – 1% below my entry price.  This will allow the price to move around a little and give it a chance to move upward.  I set this stop using a Stop-loss order so it happens automatically and I don’t have a chance to overrule myself when a stock moves the opposite way I want it to.

When a stock moves in the right direction, I target a 2-3% profit.  If it goes further I am happy to take additional profits but I’m trying to be realistic and not get greedy.  As a stock moves up I will move my stop up, protecting any profits I make from a sudden downturn.  When the stock reaches a 2% profit, I will set the stop at 1% profit.  When it reaches 3% I move the stop to 2%.  I will watch stocks very closely and if the price seems to be stalling in a profitable area I will not hesitate to sell in order to protect the profits I have made.

Penny Wins

Penny stocks are extremely volatile and require a different strategy to capitalize on.  For these stocks I have been the most successful buying and holding for the right moment.  That means holding the stocks even when they drop 50% in value.  My most profitable trade was buying about $800 worth of SGMD. After riding the roller coaster as it dropped to less than $400 in value only to cash out a few months later for more than $5,000 in value.

Right now I am holding UITA which is down nearly 50% in value.  The $8,000 I invested is worth around $4,000 right now.  As the company makes announcements I expect the price to spike up dramatically.  I have no idea when this will happen, though.  It could be next month it could be next year.  I placed a big bet so I could reap a large reward if I’m right.  In the meantime, the company could go bankrupt, get sued or shutdown by regulators.  So it is a very risky move but no risk, no reward.

The Losses

I have taken some sizable losses that have directly harmed my bankroll and ability to move toward full-time self employment through day trading.  The losses have almost always been when I went against my own strategy.  I would let the price fall below my self imposed stop then end up losing 4-5% instead of the 1% I have set in my strategy.

PLAY is one example of this.  In order to stop this from happening, I am setting a Stop-Loss order to take myself out of the equation.  However, I did review all those large losses and noticed something interesting.  Almost all that I sold for a large loss could have cashed out a profit if I held them for 2-3 weeks.  So for the current misstep I made in PLAY, I am holding out for a profitable exit.  I have decided to see it through for a month or so and see if I can get back positive.

The Future

I have carved out my basic strategy and will seek to become a full-time day trader as soon as my bank roll will allow.  In the meantime, I will continue to learn and teach.  I hope you have learned something through my experiences and will continue to follow me on this journey.

The website is being redesigned to better accommodate new traders and investors.

I have new lessons in the works including a 600% profit trading options.  What does that even mean?  I’m learning that now and will explain as soon as I can.

Feel free to ask questions in the comment box below.  Until then, thanks for reading and happy trading!

Week of 5/7: Slow Trading

My plan for this week is Slow Trading. I will make only a few trades as I get back into the groove after a week of travel and relaxation.  My day job was especially demanding this week because nothing gets done right while I’m gone.  I look forward to leaving every day!  My goal this week is no more than 3 trades with no minimum.  If there is not a good trade to be made, I won’t make it.

In The News

I use Coinbase, one of the largest digital currency exchanges in the world, to hold my cryptocurrencies. Every year they hold a conference in New York.  You can read more about my purchases of Bitcoin and 2 other currencies here.  In years past, the price of bitcoin has climbed during this conference, last year the increase was nearly 70%.  I read several articles about the upcoming conference and decided there might be a way to profit even if I don’t buy more bitcoin or other cryptocurrencies.  This week I will be keeping an eye on crypto-related stocks.

The Trades

Riot Blockchain (RIOT) is focused on building, supporting and operating Blockchain technologies.  Blockchain technology is what makes cryptos unique and decentralizied. If you are interested in learning more about how they work check out my post here.  This stock tends to rise and fall with Bitcoin.  It looked to me like it could be at a fairly low point and is primed for a breakout with the conference on the horizon.

5/10 – Bought 1324 shares of RIOT for $7.55 each, total cost was $ 10,001.15.  I usually put a stop order in place about 1% below my buy-in price, but I wanted to give this one enough room to move around a little.  I put a stop loss order in at $7.27, about 3.7% below my buy in price.

Later that day the price hit the stop and sold for $7.25 per share.  Total sale was $9,601.11, a loss of $400.04, about 4%.

5/10 – From the chatroom I was turned on to LUMA and decided to make a day trade.  I bought 494 shares for $18.20 each, for a total of $8,993.87.  This stock stalled and I quickly exited the trade.  I sold the shares for $18.08 each, total sale $8,926.30, a loss of $67.57, about 0.8%.

5/11 was a new day with new possibilities.  Through the chatroom, I was alerted to CALL, which was in the midst of a breakout.  I bought 1,169 shares for $8.51 each.  Total cost was $9,957.35.  I was still holding this position at the end of the week.

Notes & Thoughts

A few things to note, I deposited $200 from my side hustles.  On 5/9 I received $49.20 in dividend payments from LOW stock.  On 5/11 I contributed $105 and $50 to my IRA and brokerage account respectively.

This was not the most profitable week in trading for me and, upon reflection, I realized I seemed to have stalled in the past few weeks.  I will be working on tweaking my strategy in the coming weeks.  Stay tuned to see what I do next.

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, a 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 too 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!