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A Time to Trade

The time of day you trade matters.  I just finished looking over my trades for the past month, since I opened my SureTrader account.  They allow me to make as many trades as I want without any PDT restriction.  So naturally I am trading more often.  The results surprised me.  You can learn more about the Pattern Day Trader rule and how to avoid it here. When is the best time to trade?

The Numbers

Since opening the account, I have made more trades for sure.  I have lost about $500 total from various trades but the thing that stuck out to me was the time of day I lost the most money.  Pre-market and even the first 15 minutes can be the most volatile, but this has been the most profitable time for me.  Lunch trades, or midday trades have always ended up with me breaking even or losing money.  I did not have a single profitable trade in the midday hours of trading.

Let’s examine one of these trades that should have been an easy win and definitely had the potential to be profitable, but I ended up losing almost $300 instead.  MJ is an ETF that tracks the emerging weed industry.  The day was 11/6/2018 mid-term elections day!  With several measures on the ballots across the country to legalize marijuana in the medical and recreational fields, I expected the excitement for many of these stocks to be high the day after the ballots were cast.  This assumption was based on previous years’ elections.  Almost all similar measures were approved by voters with wide margins.

The Trade

Of course I needed to manage my risk; since any stock can go in any direction at any time, one must always budget the maximum loss one is willing to take.  Since I was looking for a 6-8% swing with a relatively low risk, I was willing to risk 2-3%.  I found that the last resistance level was at $33.98 and I decided to place my stop just below that price, at $33.95.  At 1:37 PM I placed my order for 300 shares for $34.70 each and the trade executed promptly.  The price held steady between $34.50 – $34.75 until 2:15 when the price began to fade.  The price fell rapidly until it broke down below $34, then quickly dropped below my stop, executing my sell order at $33.83, $0.12 below my stop.

The Time to Trade

Now, I had proper risk management in place and only lost about $270 total, but it also cost me a day trade when I had no intention of selling the same day.  So, I was pleased with my plan to the extent that it didn’t jeopardize a large portion of my trading capital.  But the fact remained, every midday trade I made lost me money, and this “easy” trade proved the point.  There may very well be money to be made midday, but it has not been working for me.

So, from here on out as a general guideline, I will not be trading between 11am and 3pm.  Before and after those times, the market is more active and the directions are better defined.  Long-term breakouts that occur midday are fair game, but swing trades and most day trades will be made between from 9:15 – 11 AM and 3 – 4 PM.  Few exceptions will be made.

Side note, I’m working on a guide to summarize all my rules.  I will make it available for free as soon as it is profitable.

What If…

What if I had used this rule with the same assumptions and plan but waited until after 3pm to buy in? Would I have fared any better?  Yes, without a doubt!  If you look at the chart below, you can see I would have had a much better entry point and used $33.50 as a stop.  It’s also worth noting that all my other assumptions proved true.  The votes on election night allow for more access to marijuana in both the recreational and medical fields.  The price opened at $35 and spiked up over $35.50 within a few minutes of the open.  Now, it didn’t hold it during the day, but I would have been able to exit the trade with a profit of $300+.

The key to looking at what could have happened is learning the pattern and looking for it again in the future.  Don’t sit around and beat yourself up for missing out on profits.  After all, there were literally millions of other trades that you didn’t know about that “could” have made you rich.  You don’t stress about those so you should not stress about these.  It is always worth learning from what could have been, just make sure you are constructive.

Final Thought and Notes

As the year draws to a close, it is becoming more apparent to me that I will not likely have the bankroll to quit my job and pursue a full-time career in day trading by the end of this year.  However I do fully intend to continue this quest.  Once I have the skills, they will never be lost.  Traders today are no better than they were 100 years ago.  It is truly one of the last professions that has not been figured out.  Please join me on this journey to financial independence. Follow this blog by signing up below.

All my trades can be found here: Profit.ly
Profit.ly is the social media for traders.  I encourage you to post all your trades as well.

Thanks for reading and happy trading!  Follow me on twitter for all trades, live!

FREE Resources for Traders

Being new to trading, one will quickly find a massive number of resources available through books, software and educational programs.  Most will tease you with a few “free” resources but before you make your first dollar in the markets, they start asking for payment.  While I have paid for a few courses and resources, I have discovered many of the best are free.  The only thing you will be required to give is an email address.  You can even setup a separate email for all these junk emails to go to.  There is an immense amount of free resources for traders of all levels.  You can stop looking, because you found them!

FREE Resources for Traders

Don’t crack open your wallet until you know you are getting a good value.  While you must spend money to make money, don’t overdo it at first.  Try to make sure your trading profits exceed your expenses.  Start with these free resources before you break the piggy bank open.

Trading Platform

Robinhood has free trades for everyone!  This link will take you to my full review of the platform.  They do sell your data to other trading firms so beware that you are not their customer in the traditional sense, but you are actually the product.  I don’t think it is the best platform for those with medium to large accounts above $2,000.  But for those just starting out, putting anywhere from $5-$2,000 in the market, it is a great place to get your feet wet.

Education

The trader checklist is a free 11-hour education guide for those who want to get serious about trading.  The course concentrates on penny stocks and small accounts.  It provides a scoring metric to determine what stocks are worth buying and which ones you can ignore.  The course is given by Tim Sykes, who is well known in the industry for turning $12,000 into more than $4 million.  I am a student of his and fully believe in his concepts.

There is a small downside for some.  Tim, while being an expert in his field, can be extremely crude.  Being a Marine, my skin is thick and I happily let his cussing roll right off my shoulders.  However, if you are more sensitive you might want to find another course. If you have small children around, consider using earphones.  The information is excellent and I hope to demonstrate this with solid profits in the near future.

Watch-list

Dave Mabe tweets out a watch-list every morning to all his followers.  He provides many stocks that are moving or likely to move based on news or the previous day’s action.  Dave is a long time day trader who works for trade-ideas.com.  Not all the stocks will fit with everyone’s trading style, but it is a great resource until you can learn how to make you own watch-lists.

Dave does some tweeting about the markets, local running groups and occasionally a good beer.  I have never seen anything offensive in his feed so it is safe to say he is family friendly.  Please do remember that a watch-list is just that: a list of stocks to “watch.”  A watch-list is NOT a recommendation to buy, it is just a list of stocks that are “in play” and could move in a favorable direction throughout the trading day.  Typically for me, 80% of the stocks on my daily watch-list never move in the direction I want and 90%+ I will not trade.   A watch-list can and should evolve as the day progresses, I will typically add and remove several stocks from my watch-list throughout the trading day.

Chat Room

There are dozens of chat rooms available and most charge to get in.  One in particular, though, is completely free, has an excellent moderator and is open to everyone!  The moderator even shares all his own trades in real time.  Trade-ideas.com sells trading software but offers the chatroom for free as a marketing tool.  You will need to give them your email to create an account but the rest is free!  Make sure you have your sound on as, Barrie, a mild mannered Canadian, calmly watches the market and tells you what he is looking for in the market.  He is also very polite and I have never heard him cuss.  Those Canadians sure do things differently!

Even as a free subscriber you are welcome to ask questions and offer input.  If you want to see what it’s like to actually day trade full time, tune in around 9am each morning and just observe.  The perspectives and knowledge that is available in the room is incredible.

When to Pay

Now that I have given you plenty of free resources for traders, you may think you will never need to pay for anything.  That may be true but I don’t know any full-time day traders who don’t pay for something.  Whether it be special software or chat room access, you must treat trading like a business if you are going to take it seriously.  Like any business, you must invest in your business if you expect it to be profitable in the long run.  Just make sure you place limits on your spending and track expenses and profits to make sure you are getting a good value.

Final thoughts and Notes

This month the markets are in rough shape; traditionally, major crashes happen in October.  The great depression stock market crash started on 10/24/1929.  Black Monday was 10/19/1987.  The great recession started on 10/11/2007.  Be careful in these markets as things are choppy right now and history has a way of repeating itself.  I’m not predicting a crash or anything like that, just a reminder to be mindful, no one knows what the markets will do tomorrow.

The resources listed above are what I use and have found value in.  I’m sure there are tons more out there.  I try to limit the noise and keep my posts short and only provide resources that I personally use or have used.  Feel free to share your own in the comments below.

 

All my trades can be found here: Profit.ly
Profit.ly is the social media for traders.  I encourage you to post all your trades as well.

Thanks for reading and happy trading!  Follow me on twitter for all trades, live!

 

PDT Designation and How to get Around It

The PDT designation or Pattern Day Trade designation, simply put, is a law intended to discourage over-trading.  The SEC states that you qualify as a Pattern Day Trader if you make 4 or more day trades in 5 business days.  If you meet this designation, you are required to maintain at least $25,000 in your brokerage account.  As a result, brokerages have limited all accounts with less than $25,000 to a maximum of 3 day trades per 5 business days.

Q: Why Have a PDT Designation?

As stated above, it is to discourage over-trading.  New traders have a tendency to have FOMO and will over-trade and end up losing money.  Limiting the number of trades you can make forces you to be more selective and can help save your account from being depleted.  The laws in the US are far more strict than in other nations around the world.  In Canada, they require only a $10,000 account balance for unlimited day trades.  Some nations have no minimum whatsoever; we will come back to that in a bit.

A: For Your Own Good

I will not encourage anyone to work around this rule as it is a safety feature for your own good.  Over-trading is one of the easiest ways to lose money.  That being said, I have established a way to work around it for my own personal trading, with a few rules to limit my personal risk.  Every dime I put into the markets comes from outside my family’s budget and outside my retirement accounts.  It is fine to take risks but don’t risk what you can’t afford to lose.  I have funded my accounts with side hustles and gains from within the markets.

3 Ways to Avoid the PDT Designation

Hold trades overnight sounds simple enough, right?  A day trade is a position you enter and exit within the same business day.  After hours and pre-market trades are counted toward the business day on the calendar day they are made.  If you hold a position overnight, it is not a day trade.

One of my favorite strategies is look for stocks that are likely to “gap-up” overnight.  This strategy requires only a few minutes a day.  I run a scan for stocks around 3:00 pm each day, looking for stocks that have gained at least 5% during the trading day, cost between $1 and $10 per share and are closing near their high of the day.  If there is no expected news such as earnings being declared overnight, I will take a position near the close and plan to sell at opening the next day.  You can many times get a 5-10% gain, and even if it doesn’t work out you can usually at least break even or sell for a small loss.  For me, the reward outweighs the risk.  The most important thing to remember is to cut your losses quickly when a stock moves against you.

Open multiple accounts is another easy way to work around the rules, but can stretch your resources thin if you have a small account, say under $5000.  If you have between $5,000 and $10,000, you can split your cash between 2 accounts at separate brokerages and double your day trades from 3 to 6 per business day.  I have the majority of my trading capital in an E*Trade margin account.  Here is a link to the best brokerage to use based on your needs.

Open an off-shore account with SureTrader!

SureTrader.com is an international brokerage based in the Bahamas and therefore, outside of SEC regulation.  They are not allowed to solicit US based customers. They can’t even pay referral fees to people like me who steer new customers in their direction.  SureTrader does have some advantages such as no PDT rule and 6:1 margin accounts.

There are significant downsides that must be noted.  Sending money to offshore accounts is costly.  I funded my account using a Visa debit card linked to a business checking account with First Citizens Bank.  SureTrader charged a 3.5% processing fee and my bank tacked on another 2% as an international transaction fee.  I was charged $167.10 in processing fees to fund my account with $3,000.  In addition, I had to call my bank to set up a travel notification and extend my daily spending limit.  I have not tried to withdraw money from the account yet but have heard it can be difficult, too.  Follow this blog, I will update everyone when that time comes.

Another downside is very lousy executions.  Historically, when I trade with E*Trade, they will execute my trades in the best manner possible for me, their customer; SureTrader does not.  For example, with E*trade, if I place a Limit Sell Order for $3.50 but the price is currently $3.60, E*Trade will execute the order at $3.60 or very close to it.  SureTrader will execute the trade at $3.60 but only give me $3.50 and keep the other $0.10 for themselves.  You can’t complain to anyone because they fall outside of all US laws and jurisdictions.  They have higher fees than the mainstream US brokerages, too.  Commissions are typically between $5-$7 at most discount US based brokerages, SureTrader’s minimum is $5, maximum of $50, based on $0.01 per share.

Final Notes and Thoughts

The Pattern Day Trade rule is there for your protection.  After dealing with SureTrader, I recommend against them.  If you really want to trade, the best way is to open another account and use the gap-up strategy.  It is vitally important that you protect your account for a massive loss while you are learning.  No one trade will make you rich but one trade can bankrupt you.  You can read about me learning that lesson the hard way here.

I’m not yet totally sure of the tax implications of my new offshore account.  You’ll want to consult with an accountant or tax expert for that.  Just remember to answer all questions honestly, and keep in mind that gains made in the markets are always taxable.  US Citizens are required by federal law to report all income and pay taxes accordingly.

All my trades can be found here: Profit.ly
Profit.ly is the social media for traders.  I encourage you to post all your trades as well.

Thanks for reading and happy trading!  Follow me on twitter for all trades, live!

 

My Rules of Trading and What Happens When You Break Them

The past 2 weeks have been a bit rough and I am still a bit gun shy.  I am working to rebuild my confidence and start making profitable trades again.  First I will explain the rules of trading I established for myself.  I will then explain how I managed to break all of them and how much of my account I gave up while learning these rules.

The Rules

Rule #1, Cut Losses Quickly.  This is a rule from Tim Sykes and he makes no secret that it is the most important rule.  Everyone who has read or watched any of his free content knows this rule.  This is so important because when you trade lower priced stocks, almost all of them are eventually going to zero.  You never know when that is going to happen and you don’t want to be trapped in the trade when the stock does go to zero.

Rule #2, Plan Every Trade.  I keep a pen and paper at my desk and sketch out a basic plan before I make the trade.  The notes include the stock symbol, position size (number of shares), entry point, and 2 exit points.  I include 2 exit points, one is a stop, the price where I will get out to protect my account; the other exit is the target price, where I hope to sell and take a profit.

Rule #3, NEVER CHASE.  Plain and simple, if I miss my entry point that’s it, I missed it.  I will never buy above my entry point again.  It is better to keep my account intact and use it to fight another day.  There will always be another spiker, when you miss one use it as motivation to find the next one.  Never sulk and think about what could have been, because it is not what happened.

Rule #4, Stick to the Plan.  A plan is only useful if you use it and stick to it.  Not only must you make a plan but you must stick to that plan.

Rule #5, Cut Losses Quickly.  This rule is so important I listed it twice.  Everyday before I trade, I read all these rules and remind myself that they are the ticket to my future success.

A successful trade, in my book, is one that is executed according to these rules.

Sample Plan

Here are the actual notes I was taking on 10/8.

Note the top line is the only position I took, my position (P) was 1000 shares for $5.03 each.  My stop was $5, and my target was the top of the initial spike.  Given I had an issue selling and sold below this price, I made a plan and stuck to it for the most part.

Everything else on there was part of a watchlist for the day.  I keep a few notes on each one as the morning progresses.  I have noted some entry points for DNR and UUU.  Neither got to the target price so I didn’t trade either one.

Breaking the Rules of Trading

On 9/21 I was watching the market and all the weed stocks were continuing to blow up.  IGC, one I had traded last year was in play and moving fast.  It had closed at $2.14 the day before and opened at $2.70.  I decided that if it broke through $3 I would buy it and ride the spike as long as I could.  I placed a buy order at $3.05 but was too late.  Another order at $3.25, too late again, $3.50, $3.75 I couldn’t catch it as it was moving too fast.  Finally as it blasted above $4 I placed another order at $4.05, it executed at $4.03!  I bought 6000 shares for a total cost of $24,184.95.

I was happy to finally be in as this had the potential to keep running!  After the order executed I realized that I was actually too late again, my order had filled because the price had reversed.  I was suddenly staring at a $1,000 – $2,000 loss.  What a disaster I had created for myself!  Not wanting to just give up 10% of my account, I looked for reasons not to sell.  I got a nudge from someone on twitter encouraging me not to sell, they thought it would come back.

As the day progressed the price rebounded, I placed a break-even limit order at $4.03.  As the price moved quickly above and back below that price, my order never executed.  Not enough people bought at that level to take my shares.  As the price slipped further from $4 I was a wreck mentally.  I kept looking for and finding reasons not to sell.  In the back of my head I kept saying, the first loss is the smallest, but I managed to drown out this voice.

Planning Again

At the end of the day the stock completely crashed closing at $2.81.  I never sold and was looking at a loss of $8,000 on paper.  I took my time over the weekend and came up with a plan, I would sell at the first sign of weakness after the markets opened on Monday.

Monday morning rolled around and the stock opened at $2.57 and started dropping, I sold as soon as I could at $2.38.  The sale was $14,292.01.  This was a loss of $9,892.94, about 40%.  This was also about 1/2 of my trading account since I was using margin.  The rest of the week I kept my trade sizes small and cut my losses quickly.  I have begun picking back up again but am concentrating on trading based on the rules listed above.

As an additional reminder I have scheduled an automatic text from myself everyday at 9:25 AM.
“Cut losses // Make plan // Don’t chase
-Future self (you’ll thank me)”

Since this time I’ve had a few decent wins and several small losses.  I’m still a little trigger shy but I am conditioning myself to be a profitable trader by first minimizing losses; now I am working on maximizing profits.

Final Thoughts and Notes

I had a long delay between this post and my last, I needed time to get my head right and wait a few weeks before I revisited this story.  While I wish it hadn’t happened, I will use this as a learning opportunity and will hone the emotions in a positive energy.  90% of traders lose, I’m working everyday to join the 10% on the other side.  Check back often to see where I am on my journey.

All my trades can be found here: Profit.ly
Profit.ly is the social media for traders.  I encourage you to post all your trades as well.

In my next post I will tell you about the Pattern Day Trade rule and how to get around it.

Thanks for reading and happy trading!  Follow me on twitter of all trades live!

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.