I decided I wanted to play around in the stock market. I was completly new to stocks (still am learning). Many say you need 10k minimum to invest in stocks. This is not true. You can register with discount brokers $3.99 trades, free trades, etc.
So to start off I have always had much interest in investing but zero experience with stocks. I wanted to experiment with a relatively small ammount of money. After a profitable concert I invested in payed off very well for me. Rather than putting all the money in my regular accounts or spending it, I created a fidelity account (now have switched due to lower fees) and put $1000 in.
Knowing that I only had $1000 and fidelity charges a $7.99 fee every trade and also knowing that most stocks go up slowly I came up with a rather differant way of investing.
I invested in stocks immediatly after very bad news was released and the price drastically droped/Bio-tech stocks that had new drug results waiting to be released. For example temper pedic dropped to less than 20% of its week before price. I bought a few hundred dollars worth of its shares. I sold these shares later at 35% above my purchase price.
I invested in ZOLT after it crashed and sold the shares at a 40% profit. I than re-bought Zolt when it wen't back down to $8.00. Now it is at a %14 loss. But even with this loss my gains from the prior sale of ZOLT still make up for it. I predict ZOLT will come back to life and raise to roughly $9.50 in the near future in which time I will sell again at a profit.
I than invested in PPHM at .86 and sold at 1.39 I made some decent money on this one. I see the potential in many bio-tech stocks to be very lucrative.
My new investment is in ONCS which I bought at .282 and is now at .292 This company has zero profits so many may be hesitant to invest. I invested in it due to a prediction that when its next drug goes to trial and shows success the stock price will jump drastically and I will make out at a very lucrative profit.
Many may say this tactic is risky. I disagree due to spreading out the investment and looking at risk to reward on a multiple stock scale as a safety net for if one goes bad the other lucrative gains will back you up. One guideline I use is I look at the companies assets and if they have enough cash to debt that I believe they will not go bankrupt I see the potential for lucrative profit and I invest.
Right now my portfolio has increased at over 30% in less than a year. If I had put 100k in I would have made 30k profit in less than a year. Not bad.
I have used the same strategy sorta, 300 % ROI and 50% in one year, I do however check financial background information on a company, and never invest if they haven't made a profit last 3 years. Also trying to find company's with low debt. You should check out Oslo Stock exchange if you can access it, its pretty volatile.
Now ONCS is 7% above my purchase price.
Yea I'm open to any advice. Also if any of you know any good articles on trading volatile stocks feel free to post them.
Just sold ONCS at 22% above purchase price lol I am starting to think I am just getting lucky
Just curious, how do you monitor the bad news and whether or not the price drops? I certainly believe in your core model; Wait for good companies to suffer from emotional selling and swoop in for the bargain. It's the reason why I don't subscribe to rational market theory.
People say it's risky because it is. Unfortunately, most people have to learn this themselves with their own money.
BTW, this is also on my list of things I don't talk to others about because it's a no win argument: religion, politics & stock trading.
At this fast rate of growth my account will have a decent ammount of money relatively quickly. I will not put anymore of my personal assets at risk, but I have no problem re-investing the profits which is what I have been doing. As my account grows the profits of each transaction will grow also and the more diverse I can be also which is my safety net as well as the stop loss setting.
Also I find it fun. I like watching my stocks on my phone. Sitting bored at work and realizing I just made way more in a click than I would the entire day at work. Plus I see it as a great learning experience.
The premise of your system is sound, buying emotional over reaction.
Beware though, buying a bunch of similar stocks is not diversification. Another risk for you, which can be controlled is overall market risk, so be careful if you are buying the biggest losers, and the entire market is tanking.
Learn position sizing, this is the most important way that pros control risk.
The other thing to be aware of when it comes to risk is that most people get done in by risks that they don't expect, not the ones they plan for, so you'll need to be constantly expanding your knowledge of money and markets and trading to be able learn to predict the unseen risks.
Overall though, a great start, keep trading small and safe, keep detailed records of all your trades and your inner dialog and review often for ways to learn.
Because it's fun?
It's a learning experience?
Bored at work?
These are statements to protect your feelings in case you lose money. They make you feel better about what you are doing. You are investing your hard earned money. It's not something you take lightly.
You probably do take it lightly because it's only $1k. I'm not saying not do it. We've all been there. We've all traded stocks, made and lost money. Anyone can throw $1k at a stock for fun. It's like a lottery ticket. No stress in looking at your portfolio go up and down.
But don't start thinking at you could have turned $100k to $130k in a few months. If you treat $100k as a fun learning experience you won't have it long.
Step back and learn more first.
I have to agree with biophase. When I invest it's not for 'fun'. When I want fun, I take a trip with my wife and daughter. When I invest, I seek, to destroy my competition, to take advantage of others' folly, and make money. There's no fun involved. It's all cold, calculating, and methodical.
Of course I would not put 100k in un-experienced.
No they are not feeling to protect if I lose money although I do understand the risks. Yes I said it is fun because it is fun.
Just my philosophy on life and how I spend my time. If you are not making significant ammounts of money off something (which with my portfolio size I am currently not) you better be having fun at it and if you can have fun while making significant ammounts of money even better
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