(background) So I'm slowly just building my vocabulary here and I'm not a good student as far as accumulating info without doing what I'm studying so I'm trying to get into this and "learn the ropes" as fast and cheap as possible. And I don't see the point of fake "paper trading" when I can afford to lose $100(I'm sure I've spent a few k on video games over my lifetime) so... (plan) I've opened a robinhood account with $100($106 w/free sprint stock) a couple months ago(currently @ $104) and plan on learning by conservatively swing trading penny stocks as my schedule permits and hopefully discover by at least growing this account slowly that I'm cut out to be a winner, if only a small one in this game. I'm using robinhood to trade and other apps to track and be alerted of stocks I'm following. So far I'm learning via YouTube little vids here and there, using screeners to find stocks and news to familiarize myself with them. Still super ignorant but as best I can I try to pick a low point in a stock I feel it won't go much lower to be alerted of once reached, purchase a bit, then sell once alerted of one has reached a conservative higher point duh, but not so easy I'm learning. At this point I'm trying to stay off my laptop as I feel I'm not even ready for that level of complexity a pc brings into the game, and I learn better the more simple things are, - just a few apps on my phone. Is my "simple" "mobile" plan viable at least in the beginning to make little consistent gains from $100 starting point to learn the game? Has anyone done, or doing similar? Any advice or criticisms or points to wake me up to? Thanks for taking the time to educate a super green noob!
How much time do you have to monitor the stocks? If you have whole day then day trade. I say what you are doing is good. But it will be better if you put in sligthly more. Maybe 500-1k. When starting out trade with an amount that it is not your life savings, but an amount that means something to you so that you take it seriously. If after 6 months you are still in the green then you can consider putting more serious money.
$100 is not too much to start with even without paying for commissions. If you can afford it, I would suggest starting with $500. Learn to swing trade because it gives you more time if your entry is less than perfect. Of course, when swing trading, you enter on pullbacks. Do not short stocks by borrowing from your broker. The risk to the upside is unlimited! For now, just learn to trade on the long side. That is you want the stock you buy to go up. However, you have to also, learn to use stop losses to minimize any losses you suffer from trades that do not work out as expected. Maintain a trading journal of all your stock trades. Note the date, ticker symbol, number of shares, entry price, exit price, gain or loss, percentage of gain or loss. You need to be able to review your mistakes and minimize errors. That is the only way you can be a better trader. Also, a trading journal enables you to calculate if you have an edge in your trading. Is it a positive expectation or negative expectation result out of hundreds of trades?
Penny stocks behave very different from other stocks as they have a tendency of being more volatile. When learning to trade, you need to keep the big picture in mind. We all love to trade, and we love to pride ourselves in the great results on an account reflecting a minuscule fraction of our total net worth. But what you ultimately need is a concept of how to invest the remaining 95% of your assets. I suggest a top-down approach: first, learn about the principles of portfolio management, by simply trading 3 ETFs: VTI, TLT, and BIL. Once you know how to deal with that, chip away from the VTI allocation, and put that money towards more detailed strategies. I know this isn't the comment you were hoping for, I still hope it helps, cheers Felix
As far as the amount in starting with, isn't knowledge and skills development way more relevant at this stage and particularly since I'm bypassing the zero investment "paper trading" many recommend? I mean, if I do things right, won't whatever number I start with just exponentially grow? And again, I'm not shooting to be part of the 1% richest traders out there but just a successful one who can keep in the green who knows how to make, not lose, money in this game, and can confidently add funds as I feel fit down the road. So supposing I do the mindset/knowledge/skills dept. right, never minding the amount I start with, what do you think? What has been your experience also starting out and to where you are now? Overall what have you netted to this point? Are you at least in the positive? Are you in the negative but feel confident you can improve? Are you swing trading too? Specifically, at least for now I'm sticking to swing trading penny stocks, no currencies, bonds and whatever else
It doesn't cost anything to study it and save money. Everyone just wants action, then they get taken.
No, it is. I'll just have to study up on some of the terms/concepts you mentioned but it sounded pretty sound. The bigger picture. Fortunately I do have that in mind and have separated this little part into it's own little game, or animal if you will which once it grows into a little beast then I can start thinking more along the lines of the my entire net worth and where stocks will fit into it. Thx