FWIW: A few things to consider!
MISTAKE NUMBER 1:
Long ago a friend of my daughters turned me on to a stock called USVO.
~ It’s a penny stock & the first time I'd ever heard of "penny stocks"
~ Making a relatively small investment & holding it, it grew my worth to well over $40K.
~ Being inexperience to the market, holding it way to long I lost most of my profits.
LESSON: Take PROFITS!
Trading USVO left me longing for knowledge in how to trade penny stocks.
~ Being an Internet junkie I surfed and surfed and surfed.
~ At some point I found the hub.
~ Patsy board was $5.00 & under – which caught my eye.
~ As many of us here I stayed quiet and read her board. (She is an excellent trader & a very kind person).
~ Patsy traded fundamentally with an interest in insider trade plays.
~ She turned me on to Steve another highly skilled investor and very kind person.)
~ Bill was on her board at that time and he is breakout trader. (A totally different trading style).
MISTAKE NUMBER 2:
~ Like any other trader I got upset when others were making money and I was loosing money.
~ No one's fault but my own right? RIGHT!
LESSON: Don't blame SOMEONE ELSE for YOUR INVESTMENTS.
~ No one twists your arm to trade so don't follow anyone into a trade unless you know the trader (style) and you know how YOU are going to trade that stock.
~ That way if they post a moving stock and you find yourself trading on EMOTIONS, the knowledge is with you as to how they may be thinking of trading it.
~ Don’t follow others into a trade… that doesn’t mean don’t learn from them!!!
~ Find YOUR OWN trading style and stick with it.
~ Being consistent will pay off for you!
MISTAKE 4:
It took a long time to figure out when people posted a stock it was based on the way THEY TRADE IT.
After loosening money playing breakout traders (mind you this was only due to the lack of knowledge of how to trade them) Chips kindest lead me to his board, in addition I read Michael’s board (another very skilled investor and an awfully nice fella) and floated around to a couple of other boards.
~ Many of the posters I was following are very skilled traders, however I became in over-load.
~ Get the picture?
~ Watching way to may styles of trading and being a rookie can be most damaging to your finances!
LESSON:
~ Paper trade stocks from the poster you are watching for as long as it takes for you to make profit on paper!
~ Once you have master that, then and only then start to trade with real money!
MISTAKE 4:
It’s hard for ANYONE to stay focused when reading negative comments that poster makes.
~ (Don’t even try to figure out negative people - the sooner you learn NOT TO READ their post the faster you will learn to master the TRADE and start making profit!
~ Most will quickly learn that when someone is putting down a stock or another person it’s the posters own shortcoming and immaturity!
~ Reflecting their own inability to function as a trader, interact with others or venting on the board from their bad trade.
*Ever heard if mamma aint happy then no body’s happy? Well it certainly applies to some here!
~ We all want to be happy successful traders so don’t waste your imputing bad information into your bank of knowledge!
LESSSON:
~ Surround yourself with positive, successful people.
~ It will help you financially and emotionally.
MISTAKE 5:
Ok I finally got it right? WRONG!
~ Finding a trading theory that worked for me (ha ha) I decided to:
~ Buy stocks let them ride until I could sell for a profit and keep a few freebies (building on the freebies as the stock channels in the upward trend)
~ Sounded perfect to me! WRONG sorta!
~ The problem was I was playing to many types of plays to keep up the amount of trades I was making.
~ Biting off more than I could chew – Way to difficult to remember which trades were strictly a scalp and which ones were fundamental plays.
~ Trying to hold a stock until I got freebies out of them was getting me into trouble fast!
One day I while I was still in the “lost sheep stage of trading” and very frustrated, another trader asked to see my portfolio, which I freely shared with them in hopes they could tell me what I was doing right/wrong and what I needed to learn.
~ They laughed at me and asked me questions as to why I was holding so much and why was I holding all these POS & shell stocks.
~ WELL!!! I certainly didn’t know lol – all I knew was I had a plan and it wasn’t’ paying off.
~ They suggested I sell everything.
~ Of course being very grateful for someone’s help I quickly sold my stocks (including my freebies) only to watch some of those stocks hit breakout and KEEP GOING AND GOING like the friggen energizer bunny!
UHGGGGGGGGGGGGG!
Was it my friend’s fault for telling me this? NOPE!
~ It wasn’t either or our faults!
~ It was simply that à their trading style applied to my portie was like mixing oil and water.
LESSON:
~ Don’t take on more than you can handle!!!!
~ Master ONE trading technique at the time.
~ Not sure if I was trying to grow my money to fast or not but it cost me a bundle and left me feeling pretty low as a trader.
~ Hope that does not happen to you!
~ Also keep your private information about your investments to yourself... Someone may be trying to help you and innocently give you bad advise for your trading style!
It’s better to NOT to trade at all than to trade to many different types of plays when you are a newbie.
~ There are hundreds of ways to trade… pick ONE master it then move on.
EXAMPLE OF TRADING STYLES:
Short- term investing or Long-term investing
Fundamental or Technical
Shells or Real Companies
FUNDAMENTAL INVESTING: (Research)
~ Focusing on a companies events. (Swing Trades)
~ Many buy and hold (however, some are clearly short-term traders).
~ Researching: Earning, P/E ratios, Dividends, Acquisitions, Stock Splits, Reorganization etc
TECHNICAL INVESTING: (Chart & Graph Analysis)
~ Monitoring the lines and index graphs for indicators showing a buy signal.
~ Bottom plays – first signs of a trend reversal
~ Indicator cross-over - indicating a positive indicator of a trend reversals
~ Breakouts – (Momentum Trading) - riding the upward trend on high volume.
~ Channel Trades – finds a defined area between the trend lines (the low and the peak of the stock) and how often it takes a stock to reach those points.
~ Riding the moving averages
~ Over/Over Sold Stocks
~ Money Flow
~ Shorting Stocks
SCAPLPING:
~ A trader may make dozens of traders per day making large investments taking smaller profits.
SECTOR PLAYS:
~ Finding the hot sector for the day/week/month or finding a sector which you anticipate will be hot in the upcoming months.
PUMP AND DUMP: known as B/S plays of trading it takes no skill – it’s purely the influx of money manipulation to a stock.
~ Clearly a POS that groups buy and run it up then dump quickly.
~ If you happen to get in one of these plays it will normally leave you stuck in a stock or taking a loss on the trade, unless you were in the stock before the group entered and exit way before they start to dump!
IN CLOSING:
Needless to say after much failure and being a business owner growing a company from the bottom up…
~ There came a time when I stop reading others post, buckled down and started using business principals I had acquired, combined with the knowledge from trading and learn how to master ONE technical bottom play watching chart indicators.
~ Bottom trading works best for me, based on what I plan to do with a stock after the investment is entered.
~ This was a good decision for me because: most at the hub didn’t play bottom plays at that time so the temptation was not there to read others post and slip into a trade I couldn’t handle.
There is so much more that one can learn about trading stocks, the above information only scratches the surface.
~ One can spend a lifetime learning the many aspects of trading.
Again IMHO it's best to keep it simple and find your own trading style and stick with it!
Lets face it the market is based on pure emotions of the market's anticipation of what a stock will do, no more and no less!
~ That in itself it what drives a stock, if you remember nothing else this knowledge should serve you well in trading.
Best to all that enter and exit the investment
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