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A Winning Trading Strategy

In the past few weeks I have looked at my trades for the past year and realized I don’t have a winning trading strategy.  I have been making a lot of trades with varied amounts of success.  The trades put me in the hole quite a bit and I knew I needed to change something.  I signed up for one of Timothy Sykes’ education courses and hit the books studying!  Follow the links to get more details about those items.  Here are some of my early trades as my education starts to show.

Losing Trades = Learning Opportunities

On 8/29 I watched as GOL, a Brazilian Airline, was on the upswing after bouncing off support around $5.  As the stock pushed higher, I decided to buy in order to capture the momentum.  I bought 911 shares for $5.55 each, total cost $4,997.23.  The price seemed to stall but I stayed optimistic that it would stay above $5 and soon make a move toward $7 or $8 as it had earlier in the year.  On 9/4, I saw the price drop toward $5 and decided to buy more in order to lower my average cost.  I bought 1956 additional shares for $5.12 each, total cost $10,014.00.  My total position was 2,867 shares with $15,011.23 invested at an average of $5.24 per share.

That same day the $5 support didn’t hold and I sold all 2867 shares for $4.98 each.  In hindsight I could have seen this coming.  See the graph below, notice the obvious downtrend?  Despite the $5 support level, when the trend is down it will eventually come to a point, quite literally.   When it reaches this point, it will either reverse direction into an uptrend or fall through support.  The thing to remember is no one knows what it will do.

So the only safe move is no move.  Sure, you could guess and maybe you’d be right, but maybe not.  Either way, it’s a gamble, and to me it’s not worth taking.  This lesson resulted in a loss of $737.66, about 5.3%.  In perspective, I paid $1900 for my educational material.  I now have a firm understanding of what can happen on a downtrending chart.

Ford: Downtrend with Good News

Ford (F) had a similar graph when compared to GOL.  It was downtrending in a similar manner but was slightly different.  They released earnings and the initial reaction was positive.  I believed it could reverse its trend.  On 9/4, I bought 1571 shares for $9.54 each, total cost was $15,007.74.  Turned out I was wrong, the trend reversal didn’t hold.  I cut my losses quickly when the price dropped to $9.35 the next day.  This resulted in a loss of $305.53, about 2%.  Despite being wrong I think this was still a good trade.  They had positive news and were bouncing off a support level.  But it didn’t go the way I thought so there was no reason to stay with it and hope I turned a profit in a few days or weeks.  Hope is not a strategy; I am committed to playing my strategy.

ALERT!

On the morning of 9/5, I received an alert from the education program I bought.  WATT was flying upward and Tim Sykes himself had bought in.  In pre-market trading, I bought 361 shares for $13.94 each, total cost $5,036.97.  I didn’t have any other reason other than the alert to buy this stock.  I did take a smaller position, around $5K instead of my usual $10K – $20K, to limit my risk.  As 9:30 approached, the price jumped all over the $13-$14 range but never went above $14.  Tim had sold out only a few minutes after buying in but I held until the market opened.  After a few minutes the price continued on a downward spiral and I sold when the price reached $13.  Total loss was $349.03, about 6.9%.  The lesson I learned here is not to go blindly into any stock even if it comes from an expert alert.  You need a plan to make a trade, I had no plan.  $350 to learn that lesson.

The WINS!

OK so I’m down $1,392 after making those trades and learning those lessons.  Not everything went wrong, after enduring those losses, two of them completely avoidable, I hit a stride and started making money again.

NLST is a penny stock that had been moving quite a bit this week.  Twitter and chatrooms were buzzing and there was plenty of volume to support a quick trade.  On 9/7 the stock opened at $0.36 after closing at $0.16 the day before.  That is more than double in price!  It quickly moved up to $0.40 before going back to $0.30 in the first 10 minutes of trading.  After touching $0.30 it hovered around $0.31 until it began an upward move.  I bought 35,000 shares for $0.315 each, total cost was $11,029.95.  The chart moved up slowly and seemed to stall at $0.35, when the price retreated I sold.  I sold all my shares for $0.345 each, total sale $12,065.72, a profit of $1,035.77, about 9.4%!  All this happened in the first 20 minutes of the market opening.  I had ideal conditions, no one was bothering me at work.  After this trade I went on with the rest of my day!

This trade was on my watchlist of 6 stocks in the morning pre-market.  As 9am rolled around I checked again and 4 of those stocks weren’t acting like I wanted.  As 9:30 hit, NLST was moving quickly so I ignored the other stock I was watching.  Had this pattern not emerged I would not have traded.  Here is the chart I was looking at as the market opened:

It doesn’t matter that some people held overnight and doubled their money.  It doesn’t matter that the stock now trades at $0.38, so I “could” have made even more.  What matters is that I saw a pattern and took some profits from that pattern.  Don’t get greedy and don’t get scared.  Keep emotions on the sideline and take predictable profits when they are available.  This is the winning strategy of a day trader.

More Victories

With a similar mindset as the trade above, I typically select a few stocks to watch between 7am and 8am, before the market opens.  As it gets closer to 9am, I check on all those stocks again for a strong open.  At 9am I typically cross off any stocks that are not acting favorably.  As 9:30 arrives, the markets open and this is when I look for patterns to develop; the one above held support at $0.30 and began moving up.  I don’t try to predict the move, I wait for the move to show itself and then capture a portion of it.  If the stock moves against me I get out immediately.  No “hoping” because hope is not a strategy.  If you are hoping for a stock to go in your favor, you are better off buying a lottery ticket and hoping you win.

9/11 CVSI was just one of these stocks on my pre-market watchlist, and survived multiple list reductions to be the sole survivor.  I bought 3,000 shares for $5.25 each, total cost $15,754.95.  Within a few minutes I sold them for $5.37 each, total sale was $16,104.48.  This was just another disciplined trade.  Total profit was $349.53, about 2.2%.

The Gap-Up Strategy

Another strategy I am using is the Gap-up strategy.  This is a simple move that is relatively safe.  All you do is look for a stock that made a large move, 5% or more, and see if it closes near or at the high of the day.  The next day, after a strong close, you will typically see a strong opening.  Even when you don’t get a strong open, you will usually have a chance to get back out even.

9/12 No trades in the morning but as 4pm neared I bought 50,000 shares of SGMD for $0.1175 each, total cost $5,879.95.  I was attempting to use the gap-up strategy.  The next day it worked!  The stock opened at $0.1190 and began inching upward.  I got distracted in another trade and missed an opportunity to sell above $0.13.  I did manage to sell at $0.1227 per share, total sale $6,126.52.  Total profit $246.57, about 4.2% a solid profit!

The trade that was distracting me was NIO.  Today I worked from home as hurricane Florence moved toward North Carolina, so I had plenty of time to prepare a watchlist and narrow it down as the market open came close.  I was still holding the SGMD I discussed above so I had to pay attention to that, too.  RIO is an IPO (Initial Public Offering) that claims to be challenging Tesla (TSLA).  The day before it made gains but failed to break through $7.  Today it moved through and rocketed past $7.  I made a typo on my first order and ended up buying higher than I hoped at $7.20.  I bought 1,000 shares for a total of $7,204.95.  A few minutes later I sold as it was rising and distractions from house guests increased.  I sold for $7.49 per share for a total sale of $7,484.83.  A profit of $246.57, about 3.9%!  I made over $500 before 10am!

Final Thoughts and Notes

From all the trades above I netted a profit of $519.53.  Including all my trades since beginning the training course, my profits are $1,558.60!  I have nearly recouped the entire $1,900 cost of the course.

Contributions of $450 in side hustle income.

Contributions from my paycheck totaled $200, $100 each week.

I am finally beginning to feel more comfortable trading!  I am confident in my plans and the profits are proof of concept.  There is still much more studying to do.  Please follow my blog to learn with me and get inspired yourself!

Check out all my trades here at Profit.ly, the social media for traders!  You can keep your account private to create an easy to use trading journal.

Follow me on Twitter for live trades!

Thanks for reading and happy trading!

Trading Education Begins

Read my last post here to get up to speed on my new game plan and direction.  I took a hard look at my success, or lack thereof, and redirected myself to better align with my goal of full-time self-employment by the end of  2018.  There is way too much to review here so you will need to go read it if you want to understand the drastic change in my trading.  Basically I know I need a trading education, so I have begun a course!

Pre-Education Trades

Here is a look at my trading account, where the majority of my losses have come.  You can see I am holding many losing positions that I have held way too long.  Take a look at the right hand side of the table.  These losses are not helping accomplish anything.  The account value dropped all the way to $15,300 at it’s lowest point.

Please feel free to browse my previous blog post to read all about these trades.  Here is the only trade I had not yet discussed:

HIPH, is another weed stock.  They are currently producing a sports heath drink that contains CBD (cannibus oil) and has been endorsed by Ice Cube himself.  The company was being promoted by a Twitter account that is providing free penny stock picks.  They were also promoting the fact that their success rate was better than 90%, with only one loser since beginning the free service a few months earlier.

I have decided not to share that Twitter handle because I don’t trust them.  They might be legit but I have no way of knowing.

The trade:

After seeing the alert on Twitter on 8/8/18 I purchased 72,000 shares of HIPH for $0.0131 each.  The total cost was $948.15.

Education Begins, Cash Needed

I did pay for my educational materials, and for copyright and ethical reasons I can’t share the information from that material here.  Tim Sykes’ business is selling trading education, posting it for free would be wrong.  I will, however, share the new rules I created from Tim’s teachings.  The first thing I needed to do was free up some cash from all the trades that weren’t serving me well.  Without cash I can’t trade.

On 8/21 I sold the shares of HIPH from 8/8 for $0.0135 each.  Total sale was $960.58, a profit of $12.43, about 1.3%.

I had no reason to believe this was a good trade with a positive upside, so I sold them.  The price did rise more than 100% in the days following but since there was no indication, I have no regrets.  I need to focus on trading profitably, not buying lottery tickets.

On 8/22 I sold 120 shares of Lowe’s that had been purchased in 1999 for $14.23 per share, the total cost was $1,707.60.  They sold for $106.76 each after a good earnings report; total sale was $12,805.07, a profit of $11,097.47, about 650%.  Now that I had a plan, it was time to liquidate this position and eliminate any excuses for not selling.  I knew when I sold this one there would be a tax bill, but now I have no tax bill excuse.

On 8/27 I sold my position in RIOT for $5.78 per share.  I waited a few days to sell because it was on the rise following Bitcoin’s lead.  Once it started to turn back I sold, the total sale was $3,751.92, a loss of $1,865.47, about 33%.

Trading the Charts

As I began my new chapter I decided to stick with the stocks I knew and trade the charts, not the companies.  You invest in companies, you trade charts.  I will only trade stocks that show a good technical chart that has promising short terms gains.

8/23 I bought 400 shares of MU for $50 each, total cost $20,004.95.
I sold these shares on 8/24 for $50.24 each, total sale was $20,134.73, a profit of $134.73, about 0.7%.  After this stock showed signs of an upward move it reversed direction.  I sold out to preserve my profits.

8/28 I bought 120 shares of WWE, yes professional wrestling.  It was the trade of the week from Trade Ideas and was moving toward all time highs.  The shares were $82.83 each, a total cost of $9,945.57.  This trade worked well and I watched for several days as it moved upwards with a moving average or MA.  Once it dropped below that moving average I set a stop-loss order.  It continued downward and on 8/30 I sold for $85.97 per share.  The total sale was $10,311.30, a profit of $365.73, about 3.7%.

On 8/28, as weed stocks continued to rise I bought 500 shares of ZYNE for $6.80 to try and capitalize on this.  This stock was making an upward move after bouncing off support.  I sold it the next day for $7.13 per share, total sale was $3,558.94, a profit of $153.99 about 4.5%.  This stock is currently trading above $8 per share but I have no regrets as I took a solid profit and didn’t get greedy.

Long Hold: Cash Out a Loss

On 8/29 I sold the last 30,000 shares of SGMD the stock that gave me a $5,000+ profit last year.  I realized there was no guarantee of future movement and they put out a press release describing their plan to dilute their shares.  You can read about the dilution here.  The shares sold for $0.13 each, the total from all SGMD shares sold this month was $5,645.14, a loss of $427.41 about 7%.  This stock just didn’t fit with my strategy; they needed to go.

On 8/29 I bought back into MU because it seemed to be continuing an upward trend which I had already profited from in the same week.  I bought 388 shares for $51.55 each, total cost $20,005.30.  I sold these the next day for $52.51 each, total sale was $20,368.61, a profit of $363.31 about 1.8%.

TSLA, one of my favorite stocks, was making an upward move right after I sold those shares of MU.  I went ahead and bought 66 shares for $301.45 each, total cost $19,900.53.  The price rose but quickly reversed, I sold before it moved me into negative territory.  Sold for $302 per share, a profit of $26.25 about 0.1%.

The last trade I am still holding but have a stop in place near $5.  GOL, a brazilian airline was making an upward move after bouncing off support.  On 8/29 I bought 911 shares for $5.48 each.  At writing I am still holding these shares, they closed at $5.52 on 8/31.  As of right now I have a small profit.

Final Notes and Thoughts

Additional income, expenses and contributions:

I recieved a dividend from LOW stock on 8/8 for $57.60.
$760 was added from side hustling during the month of August.
I made $400 in contributions from my paychecks during August.
E*Trade charged me $81.88 in interest for using my margin account.

You may be asking yourself what is technical analysis?  What on earth are you talking about?  What is “bouncing off support?”  I will explain all in an upcoming blog post so subscribe to this blog below to keep learning!  I want to first prove there are profits to be made using technical analysis, then explain it.  You will want to learn after you see me making money using these techniques.

Thanks for reading and happy trading!

Penny Stocks to Watch: HMNY & SGMD

The past couple weeks have brought MoviePass and it’s parent company HMNY to its knees.  With no path to profitability and massive losses piling up, the stock has lost 99.9% of its value in just a few weeks.  The reverse split puts its original share price at $0.0002, that’s 2 hundredths of a penny!  With the original share structure it would take 50 shares to make a full penny.  Is this company done-for?  Or is this an incredible once-in-a-life-time opportunity to make some killer profits?  I’ll share my thoughts and moves below.

Sugarmade (SGMD), is a small California-based company that supports the legal cannabis industry.  They have a few innovative products and have made several acquisitions in the past year.  This is also the stock I have made my single largest profit on, you can read more about that here.  They sent out a press release last week which sent the share price soaring!  It gained 40% in just one day!  This company has a lot of potential between now and the end of the year.

The Fall of MoviePass and Impacts on HMNY

HMNY (HELIOS AND MATHESON ANALYTICS INC.) is the parent company of MoviePass, MoviePass Ventures, Moviefone, and Zone Technologies.  We will start with the big news, MoviePass, which has been in the news and has been declared dead by many.  I disagree and actually see some potential with its new business model.

MoviePass’ original offering was to allow subscribers to pay $10 a month and see as many movies as they wanted with a few restrictions.  Moviepass was paying full price for the tickets, which can run well over $10 per movie.  I have read many articles where analysis have theorized that MoviePass wanted to use the gym subscription model where they sell many subscriptions but few actually get used.  I reject this completely because movies are already big business and the industry is making money hand over fist through people who come and pay more than $10 to see a movie.  If you offer them the same entertainment at a fraction of the price, people will flock to it and use it.  This is what Moviepass was counting on.

According their annual filing, HMNY intended to grow the subscriber base quickly and exponentially and leverage their  purchasing power into multiple revenue streams from studios, theaters, concessions and advertisers.  At the time of the acquisition, MoviePass accounted for about 6% of movie ticket sales in the United States.  With the incredibly discounted offer, they hoped to grow that number to well over 50% at a lightening pace.  If they control that much of the ticket purchasing they will have a lot of negotiation power and push movie goers toward or away from certain movies and theaters.  They would essentially take control of the market and be able to dictate the terms to the rest of the industry.

The Future of HMNY

Keep in mind that MoviePass is only one of HMNY’s multiple companies.  It is possible for a company to have one company go bankrupt and keep the others intact.  That in and of itself tells me that HMNY has a future even if MoviePass does not.

MoviePass Ventures is set to release a movie staring Bruce Willis, a top A-list celebrity.  His name alone will bring in $50 million in revenue even if the movie is terrible.  Moviefone is a website that has more than 6 million monthly visitors.  Zone Technologies is working a unique GPS that keeps you away from high crime areas.

The current market cap, or valuation, for HMNY is about $100K even though they have more than that in cash on hand.  At $0.05 this is a bargain in my eyes.  There is a chance the whole company gets de-listed from the exchange or declares bankruptcy, which means I could lose everything I put in.  On the other hand, the share price could climb back over $1 within a few weeks or months and even see $6-$8 in the next year or two.

My Move:

As the share price fell over several weeks I kept an eye out for a buying opportunity.
On 8/3 the price appeared to bottom out at $0.06 per share.
On 8/6 the price spiked to $0.18 on news of a new business model for MoviePass, $10 for 3 movies a month.

I sold 650 shares (1/2 my position) of RIOT for $6.75 each.  Total sale was $4,384.19 a loss of $614.31, about 12%.
I bought 52,000 shares of HMNY for $0.085 each, total cost $4,429.90.

I could be dead wrong about this stock, please trade at your own risk.

Sugarmade’s Upgrade

A press release from 8/8 stated that the company was now current with all it’s filings.  They had been behind for a while and many investors grew weary of the company because they took so long to get the proper filings in.  The press release, not yet confirmed by regulators, stated that they were now current on all filings required by the SEC.  They further stated that they were upgraded back to the OTCQB market.  See below for an explanation of these markets.

The Markets

OTC, over-the-counter markets, is where penny stocks live.  The OTC market is divided into 3 segments in order to give traders and investors an idea of how risky the stock is.

The lowest is OTC PINK, also known as pink sheets and OTC other.  These stocks are behind on their filings and no one really knows how legit the company really is.  There are few requirements to be listed in the pink.  Some are shell companies, some might not actually have any revenue, the pink are the wild west, this is the place to buy lottery tickets.  Some might skyrocket while most will fizzle out.

The next tier up is OTC-QB.  These companies are required to have a share price of at least $0.01, not be in bankruptcy, be current on all their filings and have a qualified sponsor.  This is the tier that SGMD claims to be in.

The top tier is OTC-QX.  These companies must have a minimum share price of $0.25 and market cap above $10 million. Filing and sponsorship requirements still apply.  These are the least risky of the riskiest stocks.

All stocks have some risk, the NYSE has the most stable and least risky stocks.  The NASDAQ is very tech stock heavy, so there is much more volitility here.  The OTC markets are the wild west.

Sugarmade (SGMD)

Last year the price spiked to $0.43 without prospects of an upgrade.  I am currently holding 41,000 shares with an average price of about $0.15 each.  My intention is to hold these as the price climbs and set a stop-loss order at $0.40 after it breaches this level.  The price has the potential to reach $1 or more within the next year.  I will likely be involved with this stock to some extent for the foreseeable future.

Final notes and Thoughts

The two penny stocks I discussed today are extremely risky.  My personal investment in these companies is not advice to do the same.  Please keep in mind that I could lose my entire investment in either of these companies.

On a personal note, I got a raise at my day job.  My new take home pay is about $100 more per week.  Beginning 8/3 I will be contributing an additional $50 per week to my trading account.  That is now $100 per week to my trading account and $105 to my IRA.

Please follow this blog to see if I can make trading my full time job by the end of the year.  Follow me on twitter for live trades.  Thanks for reading and happy trading!

Facebook: the Biggest Loss EVER! plus BITCOIN: It’s Your Move

In the past 2 weeks, I have become a little more active in my trading, Bitcoin is on the rebound and Facebook recorded the biggest single-day loss in the history of the stock market.  Bitcoin it’s your move. This may be the last chance to get in cheap(ish).  Facebook and FAANG decline, what you should make of it.

Bitcoin’s $6,000 Bounce

Bitcoin, as you can see on the graph to the left, has been a bit of a roller coaster in the past 6 months.  With its all-time high of over $19,000 from December seeming like a distant memory no one was quite sure how far the price would fall.  In June the price dropped just below $6,000 and quickly jumped back up above it.  After getting back over $6,000 it seemed to stall for several weeks, which led to much speculation about the end of Cryptocurrencies.

Nothing could be further from the truth, Bitcoin is not dead and likely has a long future ahead.  Many institutional investors have been flocking in since the beginning of the year.  Some governments around the world are holding large quantities and even Goldman Sachs, the bank with the closest ties to the US government, has invested heavily in setting up their own Bitcoin exchange.  Goldman is one of the few large, well recognized, well-established banks that is welcoming the world of cryptocurrencies.  In my opinion, they see the writing on the wall and don’t want to get left behind.  If you can’t beat them, join them!

At this writing, the price has rebounded above $8,000, essentially bouncing off of the $6,000 support level.  The coming weeks may see a strong continuation, $10,000 will provide a challenge; if it can break through that, the sky is the limit.

Bitcoin It’s Your Move

This is quite possibly the last time that Bitcoin will trade this low.  A year ago today Bitcoin traded at $2,800 and the early investors celebrated with lobster and champagne.  While Bitcoin is a long way from its all-time high above $19,000, it is currently trading at an attractive level for those wanting to get started.

I invest in Bitcoin with Coinbase, follow this link to start your own account.  We will both receive $10 worth of Bitcoin if you purchase at least $100.  While I believe the price of Bitcoin will grow exponentially in the next few years, there are no guarantees.  Invest only what you can afford to lose.

FAANG and the Fall of Facebook

FAANG is an acronym for the big tech stocks that seem to have limitless growth potential.  Facebook (FB), Apple (AAPL), Amazon (AMZN), Nexflix (NFLX), and Google’s parent company Alphabet (GOOG, GOOGL).  These stocks have been exploding, gaining between 50% and 150% each year since the great recession ended in 2010.  The bigger the gains the bigger the falls.

NFLX was trading near its all-time high of $420 per share when it’s earnings report came out, the share price has dropped to $340, a 20% decline in about 1 week.  This was a result of slowing subscriber growth.

FB was trading at $217 per share but when it reported a loss of users, it dropped to $175 in a single day.  This loss equated to more than $100 billion, the largest single-day loss in value of any stock in the history of the stock market.

AMZN reported strong earnings but with the constant attacks coming from President Trump’s Twitter account the stock has declined since the earnings report’s rally.

GOOG, GOOGL, and AAPL all showed strong earnings but have been declining over the past week, too, most likely being brought down by the rest of the FAANG stocks.

Your take away from this earnings season is to understand that all stocks can be dangerous.  Stocks are capable of falling faster than they gain.  The market has no sympathy for anyone who decides to play in its dangerous waters.  If you are an investor you can ignore this headline.  If you are trading, take note and know that no matter the indications, it is dangerous to hold a stock during an earnings report.  Past results have no guarantee of future earnings and growth.

The Trades

Here are the trades I have made over the past 2 weeks.  These moves have brought me $792.61 in total realized gains, not bad for part-time work!  Follow me on Twitter for all my trades live!

7/16 Sold 13 shares of GOOG for $1,180.00 each, total sale $15,334.85.  Profit $509.90, about 3.4%.
I had bought those shares on 6/13.
I sold these before earning because I did not want to take the risk of losing the gains I had already made.

7/16 Bought 56 shares of TSLA for $309.32 each, total cost $17,327.39
7/17 Sold the same shares for $312.00 each, total sale $18,429.15.  A profit of $139.42, about 0.8%.
When the share price declined, I took the small profit that was available.

7/17 Bought 48 shares NFLX as it rebounded from the poor earnings report.  The share price was $383.84, total cost $18,429.15.
Sold them a few minutes last as the price reversed direction.  Shares sold at $380 each, total sale $18,234.80.  A loss of $194.35, about 1%.

7/18 as oil prices have jumped around I saw that MRO was at an attractive level to buy in.
Bought 920 shares of MRO for $20.17 each, total cost $18,557.49.

7/24 sold all 920 shares of MRO for $20.74 each, total sale $19,075.49.  A Profit of $518.00, about 2.7%.

7/24 Bought back into TSLA, 66 shares for $301.56 each, total cost $19,907.57
I missed several great cash-out opportunities because I was working and not able to watch it.
7/27 Finally sold for $302.95 per share as the price began to plummet.  Made a profit of $81.91, about 0.4%.

7/27 Bought 548 shares of TWTR, for $36.44 each, total cost $19,974.07.
I was thinking the share price might rebound after a bad earnings report sent the shares on a premarket slide.
I was wrong, the price continued to decline, I sold when the price reached $35.98.  Total sale $19,711.80, a loss of $262.27, about 1.3%.

New CRYPTO Investment

As the week drew to a close and Bitcoin continued to look strong I bought into RIOT, a company whose primary business is the mining of cryptocurrencies.  I bought 1,300 shares for $7.69 each, total cost $10,001.56.  As the price of Bitcoin rises this stock will likely follow.  If the price of Bitcoin declines this stock is likely to follow.  I will hold this stock until I can cash out a good profit or Bitcoin collapses.

Final Notes

Every Friday I contribute $50 into my Brokerage account and $105 to my IRA.  I did so on both 7/20 and 7/27.

On 7/27 I bought 25 shares of MJ an ETF that follows the legal weed industry.  I paid $26.50 per share, $667.45 total.
This is part of my retirement, my goal is about 25% in this ETF and the other 75% in PRGFX, a fund that follows the S&P500.
You can always view all my current investments here.

I had a side hustle come through for a nice profit of $1,270.00.  I deposited this into my brokerage account on 7/17.

R2B coin, a new cryptocurrency, that I put $543 into back in February, is scheduled to begin trading on 8/23.  The current listed value is over $32,000. Follow this blog to see if I can actually sell the coins for anything close to that.

I have made several high-risk, high-reward bets in the past few months.  Follow this blog to see what makes a profit and what goes bust.  Real Profits, Real Losses, FREE LESSONS!

Thanks for reading and Happy Trading!

New Trader Experiment

If you are looking at my current holdings you might be a little intimidated.  The value of all my accounts is more than $40,000!  For me, that is a lot of money!!  The real purpose of this blog is to help people who have no experience get into the market, so I have started an account that has very little money in an attempt to grow a small investment over time to something larger.  As a new trader, it is best, in my opinion, to start small with some skin in the game.  You will pay more attention to the market if you have some of your own real money invested.  For this account, I will start with just under $10.

The Setup

As I have been getting my feet wet as a new trader and investor over the past 14 months I have had several ups and downs.  Here is a screenshot of my Robinhood Account which I funded with $2,000 back in February.  You can see plenty of ups and downs, the lowest point my loss was $468, nearly 25% of my investment.  Through several trades over several weeks, I brought it back to the positive and even turned a profit of $9.53.

I cashed out my initial investment and put it back into my E*Trade brokerage account for larger trades.  I will take the $9.53 left over and attempt to grow it into something more without adding any more cash.  Given that it is not much money I will be very limited in my selection of stocks.  Since I can’t spend more than $9.53 on any one share.

The Trades

6/19 bought 2 shares of CHK for $4.63 each, total cost $9.25.
6/27 sold those share for $5.25 each, total sale $10.50, a profit of $0.75 or 8.1%.  Not bad percentage-wise but still only 75 cents

6/27 bought 3 shares of GERN for $3.55 each, total cost $10.65.
7/6 sold those shares for $3.75 each, total sale $11.25, a profit of $0.60 or 5.6%.  Once again a solid profit!

7/6 bought 20 shares of GST for $0.55 each, total cost $10.98.

At writing GST has dropped to $0.13 per share, about a 75% loss.  I am giving it a little time to see if it comes back.  One thing for certain, you will not make money on every trade.  You must take the wins with the losses and come out a better trader on the other side.

 

Please follow this blog to see where this account goes in the coming months and years!  Thanks for reading and Happy Trading!  Feel free to ask questions in the comment box below.

The Secret Sauce: What it Takes to be a Winning Trader

We all have aspirations of buying into the next Apple or Amazon for a few dollars or even pennies a share.  The problem is the waiting, we all want that return tomorrow.  Take a look at the charts for Amazon and Apple below; a $10,000 investment 15-20 years ago would make you a millionaire now.

I want you to understand something right now, no one knows what a stock will do tomorrow.  Apple is an industry leader with revolutionary products.  One of Apple’s most successful products was the iPod.  It’s mostly obsolete now but they were all the rage in the early 2000’s.  Do you remember the Zune?  That was Microsoft’s competing product, it was a total flop.  Had the Zune become the dominant product, Apple might never have achieved all the success that the iPhone and iPad have brought it.

AAPL was able to build off its success and start the smartphone as we know it today.  Without that initial success of the iPod, we might only remember that AAPL built the first personal computer  then competed with HP and Dell in the personal computer market.  Instead, we have a revolutionary company that leads the tech sector in innovation.

One more thing to note on these charts, look at the dips that occur as the stock price rises.  Some of the dips are 10-15%.  Not everyone has the nerve to ride this roller coaster for this long.

Investing vs Trading

The INVESTMENTS in Amazon and Apple could have brought you fortune if you were able to accurately predict the future 15-20 years ago and had the discipline to hold the stock even during down times.  Trading is very different than investing.  While both are essential parts of the market, but they have very different requirements.  Investing requires patience and diversification.  Trading requires you to be able to gauge reactions in the short term.  The topic of trading v. investing is more complex and I have addressed it further here.

Ok enough is enough, I promised you the secret to profitable trading.  I can bore you all day with definitions and charts.  What does it take?

The Winning Trader

Nothing worth having in life comes easy or fast.  So if you are expecting to stand on your left foot and jump three times and trading success will arrive please stop reading and find another scheme.  The secret to being a winning trader is experience.  Not a special formula or chart overlay.  No amount of artificial intelligence or reading will make you a winning trader.  If you want to learn to trade and get good at it, you must start trading!  That’s it!  Simple right?

Simple, yes, but long, tedious and excruciating.  You will lose money at some point, guaranteed; maybe not your first trade and maybe not in your first week.  The key is to manage your money and manage your risk.  Managing those two items takes, you guessed it, experience!  Before starting this journey I read Toni Turner’s A Beginner’s Guide to Day Trading (follow the link to get a copy for yourself).  She spent the first 4 chapters talking about the mental game of trading.  It wasn’t until chapter 5 that she discussed actual trades and actual stocks.

Trading is a very emotional game and if you have read enough of my earlier posts, I have plenty of tales to tell about losing money when I let emotion get in the way.  You must condition yourself to detach from the trades.  Forget that the money you are trading with is real and your own.  You must concentrate on making good trades and then you will become a profitable and winning trader.  The discipline is only achieved with experience.

Your Next Step

Start trading!  Open a FREE account with Robinhood and start trading for free!  The money is real but they don’t charge any commissions.  I have a full review of the platform here.  Follow this link and when you sign up and make your first deposit you will receive a free share of stock!  What better to start off you trading endeavor than with a guaranteed profitable move?

Thanks for reading and happy trading!  Follow this blog for lots more insights and lessons.  Follow me on Twitter for live trades.

Investors and Traders: Why We Need Both

Investors and Traders are both vitally important parts of the financial market.  Investors give stability to the market and don’t care much for the day-to-day swings.  Traders only care about the day-to-day swings and have ways to make money either way whether the prices are going up or down.  So which is better?  What should you do?

The Truth

Only you can decide what you should do.  The market needs both investors and traders.  One would be in trouble if the other didn’t exist.

Investors

Investors leave their money in the market and in the stocks they have invested in.  If there were only investors, you would have a hard time selling your shares when the time came.  Traders give the market liquidity and provide investors with a sense of comfort knowing they can sell their shares at any time and there is always a trader standing by ready to buy them.

Traders need the investors to provide stability to the marketplace.  Image if every share of every publicly traded company was in play every day.  The swings would be outrageous and horror stories would far outpace the triumphs, scaring off would-be traders.  The stock market provides a way for companies to raise cash.  If no one was willing to buy shares of a new IPO, the economy would stop growing, at least at the rates we have become accustomed to.

Traders

Trades give the market liquidity and it gives investors confidence that they can sell their shares when the time comes.  Without liquidity in the markets, investors would not put their money in because they would not be sure when, or even if, they could sell their shares and get the money back out.  Traders buy and sell billions of stocks every day.   Most shares are sold to and from other traders, but some to investors who will hold longer than the traders.  Knowing that traders want to buy and sell these shares every day gives confidence to investors that when they decide to sell be it a week, a year or a decade, they know there will be a trader waiting to buy the shares the investor no longer wants.

Which are you?  Which do you want to be?  Do you even have to choose?

Decision Time

Good news, you don’t have to decide.  I am both a trader and an investor and there is nothing stopping you from doing the same.  I have multiple accounts and use each one differently, one for investing, one for trading and one for both.  htere are long-term investing strategies and short-term trading goals.  Here is how I use my accounts.

The Accounts

My IRA (Individual Retirement Account) is my investing account.  Currently, I have about 75% in an S&P 500 index fund.  The other 25% is in a cannabis ETF.  ETF, Exchange Traded Funds, are a great investment tool and will help you capitalize on the growth in the market without taking on risk that individual stocks contain.  Now, with less risk comes less reward, but that’s OK.  This account I am growing quietly for my retirement and I want it to stay healthy even if the rest of my trading efforts crash and burn.  Learn more about ETF’s here.  Every week I contribute $105 to this account to maximize my tax benefits.

I use my Robinhood account for trading only.  Nothing I hold here is for long-term gains. It is for short day trades and swing trades only.  I am trading with small stocks only as I attempt to take a small investment of around $9 and see what I can turn it into.  The second purpose of this account is to train me to make the right moves and apply those skills to my last account. I share every trade I make as I make them, follow me on Twitter for live trades!

My Etrade brokerage account is used for both trading and investing.  I am holding two stock, LOW and SGMD for long-term growth potential.  You could buy LOW for $14 per share back in 1999 and it continues to grow today.  This week it is near $96 per share.  SGMD is a long-term hold for me because of the huge potential upside.  SGMD supports the legal cannabis industry and I expect it will explode in the next several months to years.  The rest of the cash and margin (borrowed money) I use for swing and day trades.

Click here to see where my accounts currently stand, this page is updated weekly.  Don’t forget to follow me on Twitter for live trades!