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Discussion Starter · #1 ·
guys, i am thinking about starting very small in the stock market, just to get a feel for it and to see if i can find a way not to lose my shirt :)

let's say i want to start really small, maybe below $5000. i want to do everything online. what is the best broker/website to use for low volume purchases and subsequent sales of stock? any suggestions?

i just really want to learn the ropes, mess around and hopefully earn more than the 3.5% PA i am getting for my savings account right now.

any input would be appreciated :)

andy
 

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Discussion Starter · #3 ·
cool, i saw the etrade commercial with the baby and the iphone/smartphone and it was funny.

do they have really low volume tiers? or pay per trade only? i kinda went over their site and it looks like the most basic will be a commission of $12.99 per trade? does that seem correct?

andy
 

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I went with TD Ameritrade because they have branches everywhere. Be careful >small investments can quickly dwindle these days.
 

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Discussion Starter · #6 ·
yup, i am thinking of putting in just a little money. i am not really a gambler, so i will not keep throwing money away if i make bad investments. maybe even just $2000 to learn the ropes.

i will do some research on TD ameritrade and Etrade.

andy
 

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try zecco.com that's what i use, it's not as big as those mentioned but for october they are offering free trading soooo that's a + :), i also think there's a way u can sign up under me to get me pts or w/e lol so let me know if u wanna sign up :D
 

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Do a search for sites that allow to trade with phantom money to see if you are any good. This will cost you less and teach you about your emotional strength towards losses and gains.

optionxpress.
TD
Scottrade etc....
 

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Discussion Starter · #9 ·
so, now that my savings account is only earning 1.4%.... I am really looking at this again. I already bought my 20s, so i need a new hobby. i used to spend most of my free time after the kids are asleep looking for wheels.....now i don't do that anymore.

so i need a hobby :)

a year ago, when citi was really low, all my friends saiud, buy it now. I did not have the logistics to do it, so i just shrugged it off. i could have tripled my money by now. they said the same thing about Ford, look where they are now :)

so i will look at all the websites mentioned above and probably start out with $3000 and try my hand at this game.

anybody else with any advice? i keep reading in the news that Warren Buffet espouses the buy and hold philosophy..... any opinions?

andy
 

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1. Decide if you want to be a trader or a an investor.
If you hold stocks for 3 months or more, you're considered an investor or maybe even a marketimer. Anything more frequent is typically defined as a trader. I invested since I was 14 with the buy and hold strategy that was taught by my dad. I didn't know what else to do until I discovered technical analysis which traders use to make their decisions. If I knew about this earlier, I would have known my dad was wrong and would have avoided the recent drop which is obvious when you learn how to look at the charts. It's illogical to think that companies can grow forever. Surely you can buy and hold, but know how long you're going to hold it for.

2. Don't listen to anyone's opinion or advice on how to trade/invest (including mine) until you figure out what type of trader/investor you are. Determining factors are: how much money you trade, how often you trade, and psychologically how much money you're willing to lose. Don't lose more than 20% in any given trade.

3. How to pick a broker:
A few things to look for. I discovered the hard way that some brokers charge additional fees per share for shares under a particular amount, say $2.50. These are clearly not good for pennystock traders since you can rack up hundreds in fees on a single trade and don't forget the commission happens again when you sell. Not all brokers allow you to set orders where one cancels another. Find one that does, like Tradeking.

4. Pick a time chart that matches your trading schedule.
This means, don't pay as much attention to 1 yr charts if you're day trading.

5. Reading Doji's are hard
Some technical analysis folks look at the patterns of candles (in candlestick charts) to determine what will happen next. This never worked for me and I lost tons and have rejected it completely. Feel free to explore. It might work for you, but note that it was devestating for me.

6. Take large positions.
If you're only trading a couple hundred at a time (like I did before) then you'd literally have to get 50% gain just to make $100. It's much easier to make 10% off $1,000 to get that same $100. Just a thought.

7. Cut your losses:
Duh, but seriously some people (like me) didn't realize it at first, but if you lose 50% of your money, you need a 100% gain just to get back to where you were before the loss. Losses work exponentially against you.

8. Don't feel like you constantly have to be buying.
It can hurt to look too hard for opportunities when they don't really exist. At least that's my opinion. If you trade often and get many small opportunities and don't mind the risk, it can work out. I personally wait for the big ones.

9. Read charts:
Seriously, even if you're not a trader or not into technical analysis, it's very important to at least look at a chart. Otherwise you're just looking at price w/o any context other than what the price was before. Before what? A drop? A spike? A flat line? A $2 stock might be cheap or expensive depending on the context which you can only define by the charts. Unless you look at the charts, you'll never know.

10: Unsettled funds suck:
There's something called unsettled funds which completely sucks. Basically if you buy and sell a stock and use the money to buy again, you can't sell until three days has passed since your initial purchase. This is superimportant. If you don't follow this rule, you could be kicked out of the broker for up to 30 days (which happened to me). Meanwhile you can't do anything with your existing holdings and if it all goes to $hit, then tough. Unsettled funds rule just had you by the [email protected]

11: Stocks and companies aren't the same:
A crappy company can have a rising stock price, and visa versa. This is one of the reasons that acting on the news alone isn't the best idea. Remember, you're not investing/trading a company. You're investing/trading a stock. Stock price is more imporant than any PE ratio or news.

12: Don't buy without knowing when you'll sell:
It's no different than taking on a job. The moment you get in, you have to plan your exit strategy. Out in 2 minutes? 2 weeks? 2 months? 2 years? You want to leave on YOUR terms - not anyone elses. Set you sell limit or stop order the moment you take a holding.

13: It's more than possible to make more than your 3.5% that you're talking about with your savings account which is very high by the way. I think I'm at around 1% for my savings. The hard part is that once you do it in a year, you'll get hooked and you'll more than likely try to do it again w/in that same yr and each time you do it, you're risking your gains and can lose money. Stay disciplined. G'luck.
 

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Discussion Starter · #11 ·
wow!!!! that was a great reply.

I knew there was a lot to stock trading/investing, but boy there REALLY is a lot to it :)

makes me wonder if i should even try it or not.

i have two prospective investments back home in the Philippines to build two mixed use commercial buildings on our family land. maybe i should just stick to something that is bricks and mortar since i don't know much about stocks.

but if i never start, then i will never learn!!!!! aaarrrrgggghhhh.

andy
 

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Discussion Starter · #12 ·
BTW, my 3.5% was from the original post, my current savings account only get 1.39%

andy
 

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Sorry, I didn't mean to overwhelm you.

From hearing your response, perhaps you're less interested in the stock market as a subject and more interested in simply finding a better place to put your money because you feel like it's a wasted opportunity to just have your money sitting in a 1.39% savings account.

One important thing to think about. When do you want your money back? If you just want to park it and don't really want/need it soon (within yrs), maybe you can just invest in a Mutual Fund that follows the market. That'll be a buy 'n pray strategy which works for some people.
 

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A few things to be careful with concerning penny stocks:

1. These companies are often pretty weak. Meaning they're more likely to go down than up. If you're just starting out, you shouldn't play on margin which is required to short stocks. (Sell high, buy low.....yes, in that order).
2. There's a lot shady stuff that happens with penny stocks. (see Timothy Sykes)
3. You can't set sell stop orders for a lot of these stocks.
4. You can't set buy stop order for many of these stocks at the price you want. The Bid price is often very high percentage-wise.
5. Just the mere fact that they're penny stocks means you can lose a large percentage from even a $0.02 change in stock price. Stocks do go lower than $0.01. Sometimes even $0.0007. It's nuts.
6. As I mentioned earlier, some brokers will charge additional commission fees beyond the base that includes costs per share! That sucks.

I highly recommend against STARTING at pennystocks.
 

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zoomie said:
1. Decide if you want to be a trader or a an investor.
If you hold stocks for 3 months or more, you're considered an investor or maybe even a marketimer. Anything more frequent is typically defined as a trader. I invested since I was 14 with the buy and hold strategy that was taught by my dad. I didn't know what else to do until I discovered technical analysis which traders use to make their decisions. If I knew about this earlier, I would have known my dad was wrong and would have avoided the recent drop which is obvious when you learn how to look at the charts. It's illogical to think that companies can grow forever. Surely you can buy and hold, but know how long you're going to hold it for.

2. Don't listen to anyone's opinion or advice on how to trade/invest (including mine) until you figure out what type of trader/investor you are. Determining factors are: how much money you trade, how often you trade, and psychologically how much money you're willing to lose. Don't lose more than 20% in any given trade.

3. How to pick a broker:
A few things to look for. I discovered the hard way that some brokers charge additional fees per share for shares under a particular amount, say $2.50. These are clearly not good for pennystock traders since you can rack up hundreds in fees on a single trade and don't forget the commission happens again when you sell. Not all brokers allow you to set orders where one cancels another. Find one that does, like Tradeking.

4. Pick a time chart that matches your trading schedule.
This means, don't pay as much attention to 1 yr charts if you're day trading.

5. Reading Doji's are hard
Some technical analysis folks look at the patterns of candles (in candlestick charts) to determine what will happen next. This never worked for me and I lost tons and have rejected it completely. Feel free to explore. It might work for you, but note that it was devestating for me.

6. Take large positions.
If you're only trading a couple hundred at a time (like I did before) then you'd literally have to get 50% gain just to make $100. It's much easier to make 10% off $1,000 to get that same $100. Just a thought.

7. Cut your losses:
Duh, but seriously some people (like me) didn't realize it at first, but if you lose 50% of your money, you need a 100% gain just to get back to where you were before the loss. Losses work exponentially against you.

8. Don't feel like you constantly have to be buying.
It can hurt to look too hard for opportunities when they don't really exist. At least that's my opinion. If you trade often and get many small opportunities and don't mind the risk, it can work out. I personally wait for the big ones.

9. Read charts:
Seriously, even if you're not a trader or not into technical analysis, it's very important to at least look at a chart. Otherwise you're just looking at price w/o any context other than what the price was before. Before what? A drop? A spike? A flat line? A $2 stock might be cheap or expensive depending on the context which you can only define by the charts. Unless you look at the charts, you'll never know.

10: Unsettled funds suck:
There's something called unsettled funds which completely sucks. Basically if you buy and sell a stock and use the money to buy again, you can't sell until three days has passed since your initial purchase. This is superimportant. If you don't follow this rule, you could be kicked out of the broker for up to 30 days (which happened to me). Meanwhile you can't do anything with your existing holdings and if it all goes to $hit, then tough. Unsettled funds rule just had you by the [email protected]

11: Stocks and companies aren't the same:
A crappy company can have a rising stock price, and visa versa. This is one of the reasons that acting on the news alone isn't the best idea. Remember, you're not investing/trading a company. You're investing/trading a stock. Stock price is more imporant than any PE ratio or news.

12: Don't buy without knowing when you'll sell:
It's no different than taking on a job. The moment you get in, you have to plan your exit strategy. Out in 2 minutes? 2 weeks? 2 months? 2 years? You want to leave on YOUR terms - not anyone elses. Set you sell limit or stop order the moment you take a holding.

13: It's more than possible to make more than your 3.5% that you're talking about with your savings account which is very high by the way. I think I'm at around 1% for my savings. The hard part is that once you do it in a year, you'll get hooked and you'll more than likely try to do it again w/in that same yr and each time you do it, you're risking your gains and can lose money. Stay disciplined. G'luck.
I'm impressed Zoomie,.. very sound advise.

I've been trading as a hobby for the past three years and honestly from last March to January it was nearly impossible to loose in the market since everything was so beat down. That's how I was able to write a check for my car. The current market is much more difficult so I've slowed down on my trades and have invested mainly in div stocks. One of my larger positions is BX that I have a 9% return on since I'm avg in very low, the rest of my current investments are XOM, PM, BP.

I'm surprised that neither of the larger benz forums have a finance section.

To the original poster, good luck and you can't learn unless your out there doing it.
 

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didn't read any other posts..
i use charles schwab for IRA and general investments, $8.95 transaction, free advice, very easy to set up accounts, manage online, etc.
idealy wouldn;t buy less than 100 shares of anything or $1000 buy low sell high(not weed)
i've got different types of stocks, long term, short term. penny stocks are tricky, you can lose or gain lots of money quickly, so be careful with those. enjoy your financial freedom!
 

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Discussion Starter · #20 ·
yikes, you guys seem to be very knowledgeable.....

yup, i really want to find better value for my money but also, as one poster said, if you don't do it, you will never learn.


aaaargh
 
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