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

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

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

The Structures

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

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

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

Government & Finance

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

The Market & Tour

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

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

The Attack

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

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

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

The Result

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

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

The Original Ticker

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

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

Final Thoughts

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

 

Thanks for reading and happy trading!

The Bear Market

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

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

Investing in a Bear Market

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

Dow Jones Year to Date

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

IRA Transactions

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

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

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

3/30
Contributed $110 from my paycheck

Trading in the Bear Market

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

E*Trade Brokerage Transactions

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

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

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

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

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

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

Robinhood Brokerage Transactions

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

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

Final Notes

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

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

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

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

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

Trade War Ignites

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

In The Margin

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

3/19 Trading:

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

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

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

3/19 Recap

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

3/20 Trading:

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

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

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

3/20 Recap

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

Swing Trading:

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

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

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

Swing Positions:

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

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

My Next Moves:

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

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

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

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

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

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

Final Margin Notes

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

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

E*Trade IRA Summary

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

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

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

3/23 Contributed $105 to the account.

Robinhood Summary

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

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

The Trade War

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

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

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

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

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

The Early Bird gets Rich on Bitcoin

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

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

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

Got to be in it to Win it!

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

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

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

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

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

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

The Future of Bitcoin

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

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

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

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

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

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

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

Keeping up with Amazon

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

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

E*Trade Brokerage: 3/15 United Airlines

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

The Dogs

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

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

E*Trade Brokerage: 3/16

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

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

Robinhood: 3/13

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

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

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

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

Robinhood: 3/14, Happy Pi Day!

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

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

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

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

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

Robinhood: 3/16

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

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

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

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

Cash Management

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

*A New Tool: Stop-Loss

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

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

  Contributions:

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

 

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

Thanks for reading & happy trading!

How to Save Money: Live Like a Billionaire!

Perfect, now you have an image of a butler making you breakfast, 7 fancy cars in the driveway of your multi-million dollar mansion!  Now forget it, none of those things will help you save money.  I want you to live like the world famous investor billionaire Warren Buffett.  There are a lot of lessons to take from him.  First he is a genius investor who has built an empire and become one of the richest men in the world.  Secondly and what we will focus on today, he is frugal.  Buffett doesn’t waste money.  In fact, his number 1 rule is never lose money, rule 2 is remember rule 1.  If you want to save money you should steal his methods.

The biggest lesson we can take from Buffett is, we need to develop healthy spending habits.  The habits we have create recurring spending.  The one time splurge for a $4 coffee drink at Starbucks is rather inconsequential.  But if you get that drink everyday Monday thru Friday for a year, it’s over a $1,000.  This is an unhealthy spending habit that someone who struggles to save money should avoid.  Buffett is known to drive himself to work and grab breakfast at McDonald’s for about $3.  When the markets are down he will only spend $2.50.  When the markets are doing well he might splurge and drop $3.50.  People must eat to live, so spending money on breakfast is not optional.  Spending money on the drink of the day at Starbucks is optional.  Let’s look at three places typical people waste money and how you can avoid it.

Save Money on Your House

The house Buffett lives in is the same house he bought in 1958 for $31,500.  In today’s money that would be $270,000.  By no means is this a cheap house, but is affordable.  Don’t over extent yourself and buy the biggest house you can afford.  Buy a house you can live in and be comfortable.  Buy a house that meets your needs.  Putting all your money toward a mortgage payment leaves little room for saving, investing and upkeep on the house.  Remember the top 3 rules of real estate, location, location, location.  Live close to the places you need and want to travel to.  If you can save $2 per day on gas driving to work that is over $500 per year you can put toward your investments and your future.  Buffett lives only 5 minutes from his office in Omaha.

Save Money on Your Car

Cars are expensive and depreciate quickly.  Don’t buy a new car, ever.  It is a waste of money.  Buffett likes to buy reduced price cars.  One of his favorite finds is a car repaired after hail damage.  The car looks and drives fine once it is fixed but sells at a lower price than one that was not damaged by hail.  Drive a reliable car that will last beyond their payments.  If you have a $300 per month car payment that’s fine.  When you pay the car off keep driving it, you now have $3,600 per year you can invest.  Buffett loves driving his Honda Accords for years on end, putting about 3,500 miles per year on them.

Save Money on Your Hobbies

Don’t start expensive habits.  If you already have them you need to stop.  Buffett’s favorite hobby is playing bridge.  He once joked during an interview that he would be happy in jail as long as he had the right 3 cellmates.  The cost of playing bridge is under $5, the cost of a deck of cards.  I like to run, I spend about $120 twice a year on a good pair of running shoes.  Compared to Buffett, I am a big spender on my hobbies.  For perspective, a round of golf with a cart costs an average of $36.  Play once a week and you will spend over $1,800 over the course of a year.  This cost does not include clubs, balls and the stylish pants.

Your Priorities, Your Choice

The truth is, saving money is not without some pain.  If you want to have your cake and eat it, too, you will have a hard time getting ahead.  Prioritize what you want out of life and make sure you’re working toward it.  If your priority is driving new cars and play golf that is just fine.  If your priority is preparing for the future for you and your family, you need to save money.  In order to save money, you must prioritize saving over other things in your life.  It is a simple concept that can be difficult to swallow.

Today you have an assignment.  Decide what you want in your life, what is important to you.  Everyone will have a different answer and there are no wrong answers.  If you have decided that coffee, cars and golf are your priorities, great!  You can prioritize your spending toward those things. If your priority is to retire one day, take control of your finances and build a healthy, fulfilling life for you and your family, then start putting your money toward your priorities.  This likely means you must take money away from things that are not a priority.

Anything worth having will not come easy.  Develop healthy spending habits and put your money to work for you.  Even if the idea of the stock market and cryptocurrencies are too scary for you I hope you can take a lesson from Warren Buffett and live frugally.

Shifting Investments March Madness

As March begins I have begun shifting my investments out of my losing investments and into better performing investments.  Last week I made a poor decision to take the 3rd position in Lumber Liquidators (LL) in my Robinhood brokerage account.  You can read more about that here. The number one reason I did this is, I had an emotional attachment to the stock.  LL was my first purchase last May when I began this experiment.  I truly did believe there was a good chance of a strong earnings report that would result in short-term profits.  It ended up being the opposite and I lost over $50 on that transaction.

This week as the LL stock price recovered and the rest of the market rallied, I decided it was time to sell.  I made the following transactions using limit sales:

E*Trade IRA, sold 71 shares of LL for $25.00 each.  Total sale $2,082.99, loss of $733.19.
E*Trade Brokerage, sold 18 shares for $25.00 each.  Total sale $443.03, loss of $34.17.

Remember, when you trade, you will not make money on every transaction.  Knowing when to cut your losses and get out is an imperative skill that I am working hard to hone.  The goal is to win more than you lose.  Don’t kid yourself into thinking you will never make a bad transaction.  Everyone that trades makes some losing trades.  Time will tell if this was the right decision.  I believe it was the right time because of my emotional involvement.  Trading on emotion is always wrong.

New IRA Strategy

As for my individual retirement account (IRA), I have been shifting that portfolio into investment funds and out of individual stocks.  You can see all my portfolio’s current holdings here.  My year-end goal is to have 75% in the mutual fund PRGFX and 25% in the ETF MJ.

PRGFX has a 5-star rating from Morningstar.  It holds stock in Apple (APPL), Amazon (AMZN), Microsoft (MSFT), Google (GOOG), and Boeing (BA), to name a few.  I like this for the long term as it has a strong history of good growth beating the market consistently over the past 10 years.  The only downside that might affect investors is, it has a minimum investment of $2,500.  If you are not at this level yet you can always find an ETF that you can purchase as little as 1 share of.  Here is a list of ETFs to consider.  I will not make any further recommendations since I am not personally invested in any of them.  I will only name specific funds and stocks that I have personally invested my hard-earned money in.  That is one of the core principles of this blog.

The MJ ETF holds stock in many cannabis-related stocks both here in the states and in Canada.  It has struggled to gain much since I invested at the end of January (side note it was called MJX when I initially invested).  Sometimes they will change the symbol of an ETF, not sure exactly why but it doesn’t seem matter at this point.

Cannabis Stocks Gamble

Cannabis stocks surged at the beginning of the year but have since levelled off and begun retreating.  The reason for the surge was a host of new laws taking effect that legalized the medical and recreational uses in different states across the country and in Canada.  There is still much uncertainty, which has caused the stock prices to stall for the time being.

The federal government still classifies Marijuana as a Schedule 1 narcotic, which defines it as having no medicinal purpose and making it illegal to even consider for medical and research purposes.  As you are well aware, many states have passed laws directly contradicting this.  Many countries across Europe have been studying it and there is much evidence that proves it does have significant medical benefits.  The Obama administration issued what is known as the Cole Memo.  This memo stated that federal law enforcement will not prosecute those in full compliance with state laws.  The feds would only prosecute for a marijuana offence if there were other laws broken, too.  This essentially provided a free pass until the end of the Obama administration.

Administration Change

The Trump administration has rescinded this memo, stating that they would give no special treatment to anyone in violation of federal laws.  The justice department has not begun making arrests or prosecuting any offenders who are in compliance with states laws.  The move seems largely symbolic right now but has left the door open for federal raids in the future.  There are 2 strong indicators that the Trump administration will leave it as merely a symbolic move and not make moves to shut down the industry.

The 1st is that marijuana producers and retailers pay federal and state taxes and no government is looking to reduce their income.  The federal government has cashed every tax payment check that producers and retailers have sent in.  A crackdown on the industry would stop these payments, therefore, reducing federal revenues and increasing the deficit.

The 2nd is that the justice department has not allocated any money to investigate and prosecute the industry.  Without money, you can’t stop the process.  Government and businesses must allocate money in order to take action.  As individuals, sometimes we can take action without investing any money, we can invest our time instead.  Organizations don’t have this luxury, time is money.  If an organization wants to spend more time on something, it must spend more money.

My Take

Considering all these factors, I believe the industry will continue to operate in this ambiguous grey area for the foreseeable future.  I expect the country to continue to allow both medical and recreational use and keep collecting taxes.  Money makes the world go round and if you follow the money, we are shifting toward more tolerance of cannabis in our society.  It will take an act of Congress to allow full legal status.  Presidents don’t write laws, they interpret and enforce them.

The Short-Term Profit Experiment

Over the past few weeks, I have begun making small trades with my Robinhood brokerage account in an attempt to make short-term profits.  I left off last week with AMD set to sell when it met the target price of $12.00.  On 3/5 this happened and I made a net profit of $15.53.  Bringing my experiment to a net profit of $2.38, finally erasing the loss I endured with the LL trades I talked about earlier.

I set a limit buy order for 78 shares of BBG for 4.80.  This executed on 3/6, total cost was $374.40.
I set a limit sell order for 78 shares for $5.00.  As of this writing the sale has not executed.

 

This month I will be diving further into Cryptocurrencies and watching the Spotify IPO.  So check back soon and share with your friends.  Don’t forget to follow this blog if you haven’t already!

Thank you for reading!  Happy Trading!!

The Case for Investment Funds

Picking individual winning stocks can be an uphill battle.  Sometimes when you think you have made all the right considerations, the price still goes the opposite way you were hoping it would.  To some extent this is part of trading, you will never be right all the time.  Even the best in the business are not perfect, so fret not!  The goal of trading and investing is to be right more often than you’re wrong.  Beating the market is not easy or everyone would do it.  The fact of the matter is, sometimes you will lose money and that’s OK, its all part of the process.  I’m going to tell you about the easiest and safest way to invest in the market: investment funds.  First, let’s start with a lesson from one of the greatest investors of all time.

The Warren Buffett bet

First off, the bet was not for any personal gain, all the proceeds went to Girls Inc., an Omaha based charity that provides after-school care as well as summer programs for girls.  The background is, Warren Buffett bet a host of hedge fund manager that he would earn more over the course of 10 years by investing in an S&P 500 index fund.  While the hedge fund managers would invest in their hedge funds.  All investors started with $320,000 and a goal of reaching $1 million at the end of 10 years.

The men made the wager in 2007.  If you remember, the economy and stock market collapsed in 2008 & 2009.  The market rose from 2010 through the current day in 2018.  Can you guess who won?  Warren Buffett’s fund averaged a 7.2% gain per year, despite the recession at the beginning.  The hedge funds managed an average of only 2.2% growth per year.  Buffett beat every single hedge fund by a significant margin.

The take-home message here is many times those who trade in the market for a living don’t manage to beat the market.  If they can’t beat it, what makes you think you can?  This is why index funds are a great option for everyone looking to get started.  If they are good enough for Warren Buffet, they are good enough for you.

Fun with Funds

Funds are single shares you can buy that have ownership in multiple companies or investments.  Think of all funds as pre-diversified investments.  Fund managers can make funds from anything they want.  The most well-known Index Funds are ones that follow the S&P 500, the Dow and the Nasdaq.  I am investing in several funds, more on that soon.

Safe Investment Funds

Mutual funds trade only once per day and have only one price per day.  Finance websites provide estimates throughout the trading day but if you decide to purchase shares of a mutual fund, the order will be processed at the end of the day once the price has been determined.  Selling shares of a mutual funds is the same, your order will be settled at the end of the day once the price has been established.  Mutual funds have minimum investment levels, too.  The only mutual fund I am currently invested in is PRGFX which has a minimum investment of $2,500.  Each subsequent investment must be at least $100.  Once nice thing is, you can buy a partial share, so you can invest any amount you want as long as it meets the minimum.  On 2/22/18 I bought 5.204 additional shares for $66.32 each, a total price of $345.13.  I had exactly $345.13 to invest, so mutual funds offer that convenience.

Mutual funds can be traded for free as long as you meet the criteria.  The criteria typically include minimum holding times ranging from 60 to 120 days.  If you cash out too soon the brokerage will charge fees.  If you are investing for the long term this will not be an issue.  In my case, I use E*Trade and have shares in PRGFX.  I pay no fees or commissions so long as I leave the money in the fund for at least 90 days.

Mutuals Funds as a Passive Investment

Mutual funds provide a safe way to invest in multiple companies without having to pay much attention to the market.  If you have limited funds and want to be a truly passive investor look no further than a good mutual fund.  You can research different mutual funds using Yahoo! Finance or Google Finance.  Be sure to consider the Morning Star rating, 5-stars being the best and 1-star being the worst.  I will not list a bunch of different finds for you to research because that is not my style.  I will only tell you about investments I am personally willing to invest my own money in.  Currently, the only mutual fund I am invested in is PRGFX.

ETF’s

Exchange Traded Funds or ETF’s trade just like stocks.  The price of ETF’s vary throughout the day and can be bought or sold at any point so long as markets are open.  These funds will trade with typical fees and commissions.  E*Trade charges $6.95 per trade, buying or selling.  Robinhood doesn’t charge any fees.  The SEC has strict approval procedures for anyone wanting to start a fund of their own. Needless to say, that’s an entirely different animal that I don’t understand and will not be covering today.  SEC regulations provide a level security for investors, while they don’t protect against market losses they do help protect against theft, fraud and bankruptcy.

ETF’s have Morning Star ratings too, the same as mutual funds.  If you are researching new ETF’s to invest in be sure to consider this rating.  While not perfect, Morning Star does provide an independent analysis and review of the fund’s past performance.  Keep in mind that past performance does not guarantee future performance, many factors can affect a fund.  Funds can maintain the same symbol but can get a new person managing them.  The new manager may take the fund in a different direction or invest in different stocks.  You should check your fund’s rating at least once a year to verify that it has not decreased.

My Safe/Risky Investment Funds

I currently hold investments in 2 ETF’s.  The first is MJ a fund traded on the New York Stock Exchange or NYSE.  It has exposure to many companies in the existing tobacco industry and the emerging marijuana industry.  So far this fund has stayed mostly flat but with all the new laws going into effect both here and with our neighbors to the north in Canada, I believe this fund will explode in the coming years.  My guess is it will perform in the same way HMMJ:TO has.  HMMJ:TO is a Canadian-based fund that has exposure to their emerging marijuana industry. Since this time last year, the price has doubled.

The other fund I am invested in is ARKWHere is a link to the full story on why I picked this fund.  This fund is unique because it holds Bitcoin and other large growth stocks.  ARKW has 7% of its assets held in Bitcoin.  ARKW allows me to be invested in the cryptocurrency market without having to set up an additional account with a cryptocurrency exchange.  The fund also eliminates the complications of dealing with the banking restrictions associated with the crypto markets.  Federal regulators require all brokerages to be insured against theft and brokerage bankruptcy. Cryptocurrency exchanges are not regulated in the same way. Cryptocurrency exchanges are therefore susceptible to theft and bankruptcy while my Bitcoin investment, held through a brokerage, is not.

ETF Advantage

If you want to invest in a certain industry but are unsure about the particular companies, pick an ETF that is aligned with that industry.  Google is your friend here.  Say you want to invest in oil or natural gas, Google “natural gas ETF” and you will have a selection to pick from.

 

Thanks for reading and happy trading!  Please follow this blog to learn the market with me!

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Can You Make Money Day Trading? Here’s What Happened when I Tried

Last week I began the process of buying and selling extremely volatile stocks in order to make small, quick profits.  Although I do not currently meet the IRS’ & SEC’s definition of a Day Trader, I have been, in essence, day trading.  Last week I managed to profit by about $7.90 from a $560 investment, you can read all out that adventure here.  I left off with 230 shares of SGYP set to sell with a limit order at $1.92.

DAY TRADING–Sort of…

2/26
This morning the alert came through on my smartphone that the sale of SGYP was executed, the total from the sale was $441.60.  A nice profit of $13.24! While $13 is not all that impressive, it was a gain of more than 3% of the price paid.  My strategy right now is to play with smaller amounts to limit the damage I can do while I learn.  I do keep track of the percentage gains because they will be extremely important if I decide to scale up and become a full-time day trader. The percentage increase would be the same if I made the same trades with larger amounts.  For example, had I made this same trade with $10,000, I would have profited $300, $20,000 would be $600 and so on.

A day trader is one who makes their income doing trades like these.  One might set a goal of $1,000 per week which comes out to $52,000 per year.  If your goal is $1,000 per week and you manage a $600 profit on the first day of the week, you are well poised to meet your weekly goal. Day trading is all about the numbers and making them work for you.

LUMBER LIQUIDATORS (LL)

If you have been reading this blog, you know LL was my first trade in May of 2017.  Initially, it did very well and seemed like it was on its way up.  Before the last earnings report, I bought even more shares.  The share price then fell because they settled a lawsuit and used a large portion of their profits in the lawsuit settlement.  The fundamentals still looked good and I still believe in this company, both in the short term and long term.  So as the day drew to a close and none of the other short terms stocks I monitor were at a good level to buy, I went ahead and made my 3rd investment in LL.  With my Robinhood Brokerage account I made the following trade:

2/26 Bought 17 shares for $24.88 each, total price was $422.94

When the earnings report came out the news was good!  They beat their estimated earnings by a small margin, their earnings were $0.10 per share.  The analysis was predicting $0.09, a small beat, but it should mean a good day with some upward movement, or so I thought.  When the markets opened, the price tanked, dropping more than 10% within the first 30 minutes.  During the earnings conference call, they mentioned that they missed expected revenue, the actual was $260 million while the expected was $264 million.  Lastly, the promotions that LL ran at the end of last year did not produce as many sales as they anticipated.  These numbers seem like small apples but for a company trying to regain it’s footing, all this news led to a large drop in price.  It might be a good long-term stock but the short term was looking bleak.

I went ahead and exited my position, selling for $21.86 per share, total cash from the sale was $371.64.  A loss of $51.30, about 12%.
I will hold my other LL positions for the time being and hope for a better cash out point in the near future.  I wanted the stock to make some profits for me but it just wasn’t in the cards today.  Better to cut my losses than watch it bleed.

Here is a summary of the trades I made the rest of the week:

All the following trades were made within my Robinhood Brokerage account.  If you have trouble following the exact timelines, click here to see a summary of all the trades in chronological order.  My end of the week holdings are listed here.

BBG

I bought 26 shares for $5.35 each last week
I set a limit sales of $5.45 which executed on 2/27.  A nice profit of $2.60, about 1.8%

ZIOP

2/27
ZIOP, which I traded some last week, read about that here, was falling again.
I set a Limit buy order for 43 shares at a price of $3.75 each, which was executed a few minutes later, total price was $161.25.
I set a sell limit order for $3.85.  This sale executed on 2/28 for $165.55.  A profit of $4.30, 2.6%.

BAS

2/27
BAS had fallen about 6% this morning, well below my established buy price of $19.40.
I bought 19 shares for $18.66 each, a total price of $354.54
I set a sell limit order for $19.60

SGYP

2/26
Sell limit order executed for $1.92 per share.  Total sale was $441.60, a profit of $13.24, about 3%
3/1
The price was falling again so I took the opportunity to try for more profits!
I set a limit buy order for 101 shares at $1.80 per share.  This executed within a few minutes, total cost $181.80
I set a sell limit order for $1.90. This executed near the market open on 3/2, for $191.90.  A profit of $10.10, 5.6%.

AMD

3/2
This price was falling with the rest of the market on Friday morning.  Looked like a great buy opportunity for a short-term profit.
I bought 31 shares for $11.50 each, total cost of $356.47
I set a sell limit order for $12.00.

 

TAKING A BREAK

2/28 After taking a beating on the LL trades yesterday, I decided to slow down.  Some of the other stocks I had set for short-term gains were also doing poorly.  I have read in many day trading articles that you must keep emotion out.  If you have a hard day there is no shame in taking a day off.  Rather than trying to outsmart the market, I decided it would be better to observe for a day or two.  I decided to make no active trades on 2/28 and leave all my sell limit orders in place.

One of my longest and best profiting stocks, Lowes (LOW), dropped more than 10% at the beginning of the trading day on a poor earnings report.  By midday, it had recovered to a 5% loss but it was still difficult to stomach. I’m glad I took today off (of trading).  Day trading is a mental game and when you’re not in the right state of mind, the best bet is to do nothing.

As promised, I have shared my gains and losses.  In these past 2 weeks of quick trades, I have profited $38.14 on 7 successful trades and lost $51.30 on 1 poor trade.  Net loss is $13.16.  We have learned that one poor, undisciplined trade can erase a week of good profits.

I felt better and more confident the next day, 3/1.  So I began trading again with a strict mindset to follow my plan or not trade.  I was fairly successful despite a rocky end to the week.  Next week will be an adventure for sure, join me then to see what happens.

 

End of Week Contributions

3/2 I contributed:
$105 to my IRA
$50 to my Etrade Brokerage
$170 to my Robinhood Brokerage from the side hustle account.

 

Thanks for reading and please FOLLOW THIS BLOG!!
Don’t forget to check back next week to see if I can fully recover from this and get back in the black!

Happy Trading!

Last Week: Website, Day Trading & Price Alerts

WEBSITE

We’ve got lots to go over for the past week.  We have successfully moved to a new host and have begun making improvements to the website.  Thank you for bearing with us as we make the site better for everyone!!

UPDATES

Last week I sold my position in Rite-Aid (RAD) to basically break even.  I transferred the resulting $900 over to my Robinhood brokerage account so I would have more money to experiment with in the Price Alert Experiment.  I wanted to see if I could generate some short terms gains by placing limit order sales so my trades automatically happened at predetermined levels.  On 2/22 I transferred a total of $980 to Robinhood, combining all the cash I had in the E*Trade brokerage account with a few dollars that were in my side hustle checking account.

E*Trade alert / Robinhood Trade

On 2/22 I received a price alert from E*Trade that ROKU had dropped below the level I had set a price alert for: $41.00.  I jumped into action and did some quick reading.  ROKU had a poor earnings report but I still like the volatility and believe there is a strong chance it will go back up as soon as any good news is heard.

With my Robinhood brokerage account, I bought 10 shares of ROKU for $43.09 each, total cost was $430.90

 IRA transactions:

2/22: I bought 5.204 additional shares of the mutual fund PRGFX for $66.32 each, total price of $345.13

2/23: I contributed $105

In my E*Trade Brokerage transactions:

2/23: I contributed $50

FAST, SMALL PROFITS

To date I am monitoring AMD, TCS, & ROKU for large price swings that I will try to capitalize on for large profits.  I was thinking that with using Robinhood’s platform to avoid fees, I could possibly make some smaller profits with other known volatile stocks.  All the stocks I mentioned above are ones I discovered over my past 6 months of trading.  I needed to find more stocks that had some short-term potential.  That’s why we have Google.

I Googled this phrase “stocks good for day trading.”  Right at the top was an article from Investopedia called “Four Great Stocks for Day Traders (BBG, SGYP).”  I love Investopedia. They offer free play money accounts you can practice with.  Their articles are factual and as actionable as any on the internet.  So, I read the article even though it was more than 2 years old; the stocks were all still as volatile as ever.  I decided to set up some limit trades to try and make some short-term profits.  I had about $560 left and they offered me 4 stock picks, so I set up 4 orders for about $140 each.

The following transactions are based on my best guess from looking at the graphs from the past week and month.  I tried to find a number near the low end of the recent price it had hit several times in the past week or month.  I tried to find a similar number that was a little higher.  Inside my Robinhood brokerage account, I made the following transactions:

2/22:
Limit Buy ZOIP, 37 shares for $3.75 each.  Executed, total price $138.75
Limit Buy BBG, 26 shares for $5.35 each.  Executed, total price $139.10
Limit Buy BAS, 7 shares for $19.40 each.  Executed, total price $135.80
Limit Buy SGYP, 75 shares for $1.87 each.  Executed, total price $140.25
Limit Buy SGYP, 4 shares for $1.85 each.  Executed, total price $7.40 (Had a few $$ left)

Once all the trade executed on the first day, I started setting sell orders.  I set new buy orders once a sale was made.

2/23:
Limit Sell BAS, 7 shares for $19.70 each.  Executed, total price $137.90. $2.10 profit!
Limit Sell ZOIP, 37 shares for $3.85 each.  Executed, total price $142.45. $3.70 profit!
Limit Sell SGYP, 79 share for $1.92 each.
Limit Sell BBG, 26 shares for $5.45 each.
Limit Buy BAS, 7 shares for $19.40 each.  Executed, total price $135.80
Limit Sell BAS, 7 shares for $19.70 each.  Executed, total price $137.90. $2.10 profit!

Both BAS and ZOIP were drifting away from the previous buy levels.  I looked  at the others I owned and decided to triple down on SGYP.  The price of SGYP had fallen even further since I bought the first batch.  I had a chance to make some extra money on this stock.

2/23:
Market Buy SGYP, 151 shares for $1.86 each.  Total price $280.71
Limit Sell SGYP, 151 shares for $1.92 each.  There is now a total of 230 shares

I placed the limit sell order for my big swingers, too:

Limit Sell WMT, 4 shares for $100 each.
Limit Sell ROKU, 10 shares for $49.85 each.

If there is not a note of “Executed” next to the order it is still open as I write this on 2/25/2018.  Please read the subsequent posts to see if I end up making any money on those.

 

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