|Forum - Gurus Answer Questions
||Gurus answer your questions about the art of trading.|
|From: SiliconMagician (Rep: 0)||Date: 09/20/2019 03:02|
|Forum: Gurus Answer Questions - Msg #686||Thread #674099714 (Rec: 0) |
|2 Questions from a rank beginner. |
I'm brand new to stock investing. It's really funny how I became interested in it. I watched The Big Short a couple months ago lmao.
But anyway it got me thinking about it so I got a copy of Analyzing Securities and The Intelligent Investor and started watching hours and hours of videos on YouTube and reading everything I could find about the basics of stock investing. I started analyzing stocks and learning how to use candlesticks with bollinger lines to predict trends.
I opened an account with WeBull am now paper trading with $500 to simulate my opening account.
Wednesday I made my first trade. I figured that natural gas and oil was a good buy this week and started screening around for fossil penny stocks and found an LNG carrier with 6 ships that for some reason had a noticeable repeating pattern over the last 6 weeks. Every 7 to 10 days the price would spike from 1.20 a good 20-40 cents over a 2 day session and then drop back down to 1.20 a share.
So I saw it was in the trough and the timing was about right on Wednesday morning so I bought in at 1.29 a share for 200 shares. Sure enough the trend repeated again and the share price jumped to 1.45 a share and I sold my position 15 minutes before the bell at 1.44. Not bad for a first time.Today it climbed to 1.67 a share but then the price dropped drastically and quickly down to 1.43 and triggered my sell order but then continued to drop all the way down to 1.32 at close. So I ended up breaking even for today.
Now here is my loss strategy. I set my stop-loss for 1 penny below what I paid for the stock. I know what this means. If the price drops early and then rallies big for the day I lost out on profit. Well that's fine with me. I'd rather lose profit and break even for the day than take a loss on my initial investment. For now that $500 is sacred. Because my goal isn't to make the biggest amount possible that I can that day. My goal is to add incremental amounts to my account daily. $10 here, $20 there. $1-5 dollars on bad days. Over 6 months to a year of consistent 5, 10,20,30 dollar days. That $500 will pretty rapidly become bigger. Then once I have a comfortable egg of a couple thousand dollars I can take a few risks. But you won't see me doing any shorts or margin buying ever. Not for years anyway. Right now I just want to pinch a few pennies and eke out a dollar here and there over the next year.
So now that that is out of the way first question:
Is this a bad strategy?
Question #2 has to deal with the fact that until I get $25,000 in my account I cannot day trade. So I have to find a good swing strategy where I try to anticipate a stock rising and possibly peaking the next day and purchasing that stock before the closing bell, or during aftermarket trading in the hopes that I can then sell the stock the next day for a small profit.
Is this a bad strategy?
Basically, while I would like to maximize ROI as much as possible, until my $500 has grown to at least $1000 I'm sacrificing at least some profits to avoid risk.
So that is it for my questions. I'm an RTFM kinda guy so if you point me to the right links I'll read whatever is necessary so feel free to post any good links to knowledge. I will read them for sure.
NOTE: This message was originally posted on 2019-09-20 00:46:23 by the SiliconMagician.
|NOTE: This message has been revised 1 time. Read original version of this message.|
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