If a little child can do it? Part 4

If a little child can do it Part 4

How much are you willing to lose? That is the best question to ask yourself, because if you do not have it to lose, you do not want to give it away. With that being said, you can start with two hundred, five hundred, or one thousand dollars. When you first get started you will want to concentrate on stocks that are sub penny to five dollar stocks. For the most part stocks in this range are subject to more volatility, and they have been known to be rapid movers. If you do not get greedy, you could lose smaller amounts of money, but at the same time make quicker gains. Going in, you should set your limits, by this I mean. How many shares do you want to buy based on how much, you are willing to wager? What is the profit, or gain you are looking to make? If you are looking to make some extra money, then you should be looking to make twentyfive to seventyfive dollars a day. Somedays nothing, somedays you walk away with a smile on your face, when you look at the spreadsheet at the end of the month, you should be smiling. I should warn you, this type of trading could be very addictive. 

I had a friend who started trading in this fashion, however he never took his profits, he was doing really well playing the game. Eventually he was up by sixteen thousand dollars, the market took a wrong turn and he was left holding two thousand dollars. You must remember you are buying volatile stocks. When they fall, it usually takes a long time for them to rise again. Do not get greedy, you should take your profits every chance you get. You should stick to your limits, this type of trading takes discipline, and is not for the weak of heart. If you start with two hundred dollars, than you should wager one hundred dollars to your stock value, and keep a hundred in your cash value. Always try to maintain half of your cash value, you will never know when a really good opportunity will come your way.

OK, let’s say you have discovered that, you do not have any talent picking stocks, you figure there must be an easier way to find stocks, that will work with this strategy, or maybe you are too lazy, (no offense intended), to do the research. There is an alternative, you could subscribe to a newsletter, or several newsletters. These guys normally have done all the research, they eat, sleep, breath and live this stuff. They will give you stock picks, of course they have a disclaimer, you should read. Some receive monetary funds to promote some of their stock picks. You should never pay for their advice, unless they gaurantee their stock picks, however you will be hard press to find one of these newsletters that will guarantee their picks. If you google penny stocks or stocks under five dollars, you will find a multitude of these newsletters. I know, the question is. Can I really trust them? To that I say, read the reviews for each newsletter, and if you do not find any reviews for one, steer clear. 

Disclaimer: I am not a licensed broker, and I do not presume to make you any promises that this strategy will work for you. The information is strictly for conversation, and if you choose to use in whole or in part any of this information. You do so at your own risk.

My next post we will talk about your trading account and the trading window.

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