Truth be told, I have always understood the whole concept of Stock Investments, which is usually a long term investment. You buy a certain amount of shares when you think the company’s value will increase its value, and you sell when you think its value will come down. The concept is easy to understand, but hard to apply, since usually Stock Investments require a fundamental analysis more than anything. However, Stock Trading was asked a lot in my YouTube Channel and I really thought I should give it a go, since with Stock Trading we are talking about a whole different deal. We need to combine Fundamental and Technical Analysis, which is what I like the most.
I want to say upfront that it was a super interesting ride, and that it is by far one of the most valuable weeks that I have had in 2020. Below I will post the link to the video where I shared my entire experience. I recommend you to watch it in case you want to see the whole beginner experience.
Stock Trading as a Beginner
We started Day 1 with the suprise that I could do nothing with my $90 dollar left-overs account, since the price of each position was kind of high, compared to usual Forex positions. I was looking to buy some Apple and Facebook shares (like a Warren Buffett), but it turned out that I didn’t have any money to trade. Therefore, I made a deposit of $500 into my trading account. After my deposit, I was ready to rock and roll.
I placed the first 2 positions: One for Tesla Motors and the other one for Apple Computer. In a super lucky spike, my Tesla Motors trade hit the TP level and I made $81.93! I was all super hyped so I decide to buy another stock on Tesla Motors (because you know, it was my best friend), and so I did.
This was until Monday since I don’t usually trade on Fridays. My Tesla Motors trade was barely moving, so I decided to place some more trades, and there I realized how limited I was with my small balance. I could only place 2 more trades, one for Apple and one for Facebook, and then THE WORST HAPPENED! Since I had 3 positions placed, and they all started going on the negative direction, my margin was exceeded so the broker automatically closed my oldest trade, my Tesla Motors trade, in loss od $36.22. I was kind of surprised as I didn’t even see the margin before that, and I thought all was doing okay. The trade was going to go in my predicted direction because I had done my analysis. After the trade was automatically closed, the stock price of Tesla jumped back up again and I lost a very big opportunity to win that trade. Lesson learned. Watch the margin.
The previous Apple trade that I had placed was in profit for $16.8 so I decided to close it, wait for new drop and enter again, and that is what happened. I entered again at a drop on an Apple trade and made $12.5 in profit. I was now getting a lot more familiar with the system.
This was on Wednesday since I didn’t close any trade on Tuesday and the Facebook trade was still opened. On Tuesday I had placed a pending order on Microsoft and it got activated. In addition, I opened a trade on Tesla Motors again and these were the results: Facebook Trade = $27, Microsoft Trade = $22.62 and Tesla Trade = $1.92. I decided to close Tesla Trade to not keep it open during the weekend and focus on new opportunities next week. so in total I made $126.55 in profit, which is not bad at all after just one week.
Here are some things that I learned about this week that I want to share:
- Stock Trading requires a bigger balance to start trading than Forex
- When you apply Fundamental and Technical Analysis, it gets a lot easier
- Over trading can blow your account in hours
- It is not as volatile as the Forex Markets
I will continue trading this week with Stocks, but I wanted to share my experience with you. So let me know in the comments what do you think! and AGAIN! Below I will post the link to the video where I shared my entire experience. I recommend you to watch it in case you want to see the whole beginner experience.