How to Make Your First $1000 investing in Stocks

Stock Market for Beginners School Blog

Day Trading and Swing Trading: Do Day Traders Make More Money Than Swing Traders?

Today’s question is: Do Day Traders Make More Money Than Swing Traders? Let me answer it this way: it depends if they have mastered their skill. You can be a day trader and make an obnoxious amount of money. You can also be a swing trader, an intermediate or a long-term trader and make an obnoxious amount of money. It doesn’t matter because it’s not about the timeframe that you are trading. It’s also about you. When I started trading, I would scream at the market and at my monitor. But the problem was not with the stock; it was me. I didn’t understand what the stock wanted to do so I got chopped up. Nobody makes more money than anybody else unless you’ve mastered your skill. The Advantage and Disadvantage of Day Trading: 1. Day traders can easily go in and out of trades over and over again for small gains with big share size. Sometimes, as a day trader, I can go into a trade with big size but I’m only looking to get 30-50 cents. And since I have  huge share size, if I get 50 cents per share, it could amount to a lot of money. With swing trading, I’m not sure if you can trade big share size and not have sleepless nights. With day trading, you can get in and out of the market by the end of the day and take advantage of small gains that accumulate at the end of the day. However, day traders pay hefty commissions compared to swing traders. Get a good day trading education if you’re interested... read more

Risk Management Definition: How Many Failed Trades Before I Should Call It A Day?

Today’s question is: How many failed trades before I should call it a day? I guess this trader is a day trader. I think a lot of day traders have an issue with calling it quits. I know that I had that problem. I would trade until my eyes were sore. This is especially true when I lost money in the first 30 minutes of my trading day; it was a disaster after that. I would try to get back the money  I lost in the first 30 minutes or the first hour of the trading day. I would find myself in like a hundred trades that day. Also, probably 70% of those trades were just bad trades; they were desperate trades. They were not well thought-out trades. You can’t really put a number on it. It depends on the following: 1. How much capital you have in your trading account If you have a $2,000 trading account, you can’t be a day trader. If you have a $30,000 trading account, you can be a day trader but with a $30,000 trading account, depending on the amount of shares that you’re trading, you might lose $5,000 and then you’re done day trading. So again, it really depends. You can’t say a specific number, say 3 trades and then you’re out. My coach once said, after 3 losing trades as a day trader, step away from your computer because you clearly don’t know what you’re doing at that moment. It was really harsh but it was true. 2. What does your trading plan say you should do If you don’t... read more

Shorting Stocks: I Want To Start Shorting But I’m Scared. Can You Help Me?

Today’s question is: I want to start shorting but I’m scared. Can you help me? I love shorting stocks so much that even in a bull market, you’ll find me shorting stocks. I’m really good at shorting stocks. I think that one of my strengths as a trader is finding those perfect stocks to short. I don’t have the patience to stay in a long position. In a short position, I know that stocks fall quicker than they rise so I usually make money quicker when I’m shorting. That is my strength but that is also my weakness because sometimes when the market is bullish, I don’t really take full advantage of the bullish moves because I’m always looking for stocks to short. Shorting stocks is so fun. Don’t be scared. A lot of investors, especially beginner investors, come into the market with a pre-conceived notion that you can’t short stocks; that it’s not very American to short stocks; that it’s not very patriotic to short stocks. But seriously, this is Wall Street. It’s not about being patriotic or being lovely-dovey with the stocks. It’s all business. If the stock is weak, short it. Remember that you’re in the market to make money. You’re not in the market to fall inlove with the company. For example, I love Apple products. However, when Apple stock is falling, I’ll short Apple. I don’t care because I need to make money as a trader. So whatever is falling, I’ll short it. Shorting stocks is no different to going long. So long as you have your probabilities right, you’ll make money. As you... read more

Advanced Technical Analysis: What Are The Common Problems With Technical Analysis?

I Love Analysis Here are the 3 common problems with advanced technical analysis that beginner traders usually aren’t aware of.  As a result, beginner traders lose money without them knowing why. But honestly speaking, I don’t think these are problems per se. It’s just a misunderstanding possibly of technical analysis. Let me shed some light to these issues. There are no absolutes in the stock market Many beginner traders buy a book or a course and they think that they know advanced technical analysis. They believe they found the Holy Grail. If a trading mentor tells them to buy at a certain area, they believe that it is the only way. They believe it is the Holy Grail and that it has to work simply because the guru said so. There are no absolutes in the stock market. The best that you’re going to get is an 80% probability the trade is going to favor you. This leaves you with a 20% probability the trade is not going to work. That is the nature of the game. If you can’t handle the fact that there is a 20%, 30% or 40% probability that your trade is not going to work, then trading is not for you. Quit now. Quit while you’re ahead so you won’t have to lose your money. You are going to lose money in trading. If somebody tells you that all your trades are going to be successful because you know advanced technical analysis, that person should get arrested. Stay away from lofty promises that look like that.  The truth of the matter is, many of... read more

Day Trading Education: How Much of Stock Trading Skills Comes From Education And How Much From Experience?

Today’s question is: How much of stock trading skills comes from education and how much from experience? It’s a catch 22. Trading education is 30% of your success ratio. If you’re only studying fundamental analysis, good luck. I’m not sure if you’re going to be successful as quickly as if you study technical analysis. What I’ve experienced is that 90% of your success as a trader is your mindset. If you believe you can, you can. If you believe you can’t, you’re also right. But to get to the right mindset, you need education. I’m referring to comprehensive education. Reading a couple of books and watching a couple of YouTube videos are not comprehensive education. It will not  help you develop the right mindset or give you the confidence to start trading. Experience is 70% of your success ratio. You can’t build the right experience without education. CEOs are not where they are now without the right training and education. Education serves as a leaping board so that they can get the experience they need to get to the management level. It’s the same concept in trading—you cannot be successful without education and training. The Winning Formula That I Used To Succeed: 1. Got structured education and mentoring I have to be honest, if I hadn’t had education, I would not be here creating these videos for you. But it wasn’t just the education that helped me get to where I am right now, it was also the mentoring. Mentoring was the key for me because I was able to ask questions, get answers, bounce-off ideas with other traders... read more

Make Money Online Trading

In this lesson, I am going to be answering a question from a new trader who wants to know how much money he should be making before he starts investing in the stock market. It’s a great question. Sometimes, we think that we have to wait until we make it to $200,000 or $300,000. Here’s the thing: you don’t need to wait. But I don’t want to give you all the juicy tips now. So make sure that you watch the video until the end. If you don’t want it to the end, you’re not going to get all the juicy details. Today’s question is from Minh. His or her question is: How much money should you make a year before you invest in the stock market? Thank you so much for this question. I’m sure there are other beginner traders who are asking the same question. My answer to that question is: There is no set amount of money you should be making before you start trading. Nobody can really put the exact figure. Nobody can say that you need to make $20,000, $100,000 or $500,000 before you start investing or trading. You could be making $20,000 a year, living with your parents and you could be saving 80% of $20,000. You can then start investing. Instead of asking how much money you should be making, maybe the best question is: “How much money do you need to have before you start investing?” I’m going to give you my take on the question… Why A Steady Income Is Important For Beginner Traders Again, you may only earn $20,000... read more

Candlestick Patterns: Why Do People Use Candlestick Charts Instead Of Line Charts?

The market communicates with traders through candles and candlestick patterns. If you fail to understand candles, you fail to understand the market. That’s when the market chops you up! Line or Candlestick Charts Candles are the footprints of money Candles give you more information about the bears and bulls than a line chart can. For example, if you see a huge green candle bar, you know that the professionals are in and that they’re committed to taking the stock higher. If you have a small green bar, you may assume that they’re not so committed or interested in taking it higher. If you see a doji, it may mean that the momentum is going to change. As you can see, candles communicate exactly what the market wants you to do. The market is not difficult to understand once you start understanding candles and candlestick patterns because you can actually understand exactly what the market is telling you, with up to 80% probability. We lose money in the market when we argue with the market and trade against it. This happens all the time among beginner traders. I tell my students to listen to the market and learn the language of the market. When I first came to Shanghai, 10 months ago, I only knew a few basic words in Mandarin. It wasn’t enough to help me communicate and understand the people here. It was very difficult for me. But as soon as I started taking Mandarin classes, life became easier and yummier. It’s the same concept with the stock market. In order for you to fully understand, appreciate and... read more

Trading Penny Stocks: What Statistics Do I Need To Look At Before I Buy A Stock?

Research Before Buying A Stock Due diligence for traders. If you are not doing your research, you are a sheep or a hog. Stock’s volume (little volume means problems) Little volume means there are little players on that stock. What do the professionals know that you don’t know as a beginner trader? What is going on in that stock? You really have to look at the stock’s volume. Stock price (trading penny stocks online eventually lead you to the slaughter house) I have spoken with a lot of beginner traders who confess their love for trading penny stocks online. They think that because they don’t have a lot of money to invest, the penny stock is where they should be putting their money. But the problem is, penny stocks are usually pump-and-dump and they lead you to the slaughter house. When you receive an email telling you that a certain stock is going to the moon, ask yourself this question: Are you that special that these nice people are telling you the secrets of Wall Street? Here’s the truth: traders are secretive. They don’t tell you what stocks they’re in. They’ve invested a lot of money and effort in their trades for them to only dole out free information to someone like you. So if someone shares a tip with you about a certain stock going to the moon, ask yourself about what that trader knows that you don’t. He must know something that you don’t, right? If you’ve bought a penny stock before that didn’t work out, don’t feel bad at all. It wasn’t your fault since you... read more

Basics Of Stock Market Investing: What Are The Advantages And Disadvantages Of Trading The Stock Market?

The basics of stock market investing are simple, but not always easy to implement. Here are some stock market basics that will help you navigate your decisions before placing your first trade. Disadvantages 1. Loss of a lot of money I remember losing a whole trading account when I was 24. Losing all my money in 2 weeks was heart-wrenching. I think this is what stops beginner traders from investing—the fear of loss. But if you dedicate and invest enough money and time in beginner stock market investing education, you’ll go a long way. 2. Loss of self-esteem and self-confidence When I started trading the Forex market, I lost money for 6 months straight. That just blew my self-confidence to pieces. The loss of self-esteem and self-confidence is worse than the loss of money. You can lose money but if you have the self-confidence you can go back into the market and make it. Losing self-esteem and self-confidence just wipes you out. 3. Loss of status I once blew up my huge trading account and I had to get a job. That was sucky and yucky for me. Getting a 9-5 job was a loss of status for me. For you, it could mean losing all your savings. Advantages 1. Obnoxious amounts of HARD CASH 2. You can work from anywhere in the world 3. You develop more strength, character, perseverance and chutzpah as a human being. Why is it important to weigh everything before getting into the stock market? Trading is not Vegas/gambling 1. Professional traders always have a trading plan. They know the following: • Where to... read more

How to Make Your First $1000 investing in Stocks

 

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