Hey all, I was going to do this post on DD but I thought about it and one really needs to understand how to use the trading platform before DD is going to do much good. I do apologize this has taken me a bit longer to get up here. I've had a very busy few weeks with all my doctor appointments and such. Just finished my nerve tests on both arms this morning... Yeah. When a guy who's been doing the same job for 40 years tells you "I've never seen this kind of damage in someone your age" it certainly knocks ones hope down. I have already been told the strength loss in my hands is permanent. I'll never recover any of it. I am looking at carpel tunnel surgery on both wrists and them cutting the muscles that go over the nerves in my elbow to hopefully allow them to work a little better. Possibly, this is what the nerve doc said will more than likely happen, I don't talk to the doc that will do the work and make the call until the 15th. I was told my nerves are very slow compared to what they should be. I was expecting this. I know because I have worked my ass off and now I will pay for it the rest of my life.. But I will survive and thrive because nothing but death will ever stop this guy. I don't know how to quit. So from here on out I really don't have a choice but to use my brain to make money with because my hands if I keep it up, I have now been told 3 times by 3 different docs (2 are specialists) if I don't stop using them like I do I will lose them. They'll just stop working altogether. But enough crying about my hands, it is what it is and just like that life goes on. It has to, you cannot let ANYTHING derail your train. It's all in your head, gotta keep that mental edge sharp because just like a knife a dull edge doesn't make a good cut, it rips and tears and the end result can be far from pretty. Keep your head on straight. I cannot stress this enough and you'll see this many many times over the coming months. IT'S HARD!!! to keep that mental edge, just remember nothing good happens over night. If you're like me it's taken you 40 years to get this fucked up so don't expect you're just gonna be the mental zen master in a week. It takes time and lots of it. REMEMBER these words.. KNOWLEDGE IS EMOTION CONTROL!!! Do you're homework and you'll have much fewer worries. Lets get to know your platform. This will be an as detailed as possible overview without writing a book. I hope lol. Its gonna be long. And remember this is just my opinion from my perspective and its an overview. I am not going to take the time to define every single thing for you. You won't learn if I do it for you, period! I'm going to stress points you should follow on your path of learning.
I am going to start with the stock market. I live in the United States so for those who do not live here keep in mind what I say here applies to U.S. stock exchanges. I would think other markets are very similar. Looking at the platforms for other countries they do look very much the same. Our rules however are probably very different from yours. The SEC (securities exchange commission)https://www.investopedia.com/terms/s/sec.asp writes all the rules here in the U.S. and they will hang you if you don't abide by their rules. For Example. Pattern Day trader (PDT)https://www.investopedia.com/terms/p/patterndaytrader.asp. Now there's a title you DO NOT want unless you have the funds for it. A pattern day trader is anyone who makes 3 or more trades within the same 5 business days (you buy and sell on the same market session, aka buy monday sell monday). Now this is fine if you have a minimum of 25,000 US dollars in your account at all times. And they mean all the time. It dips below that 25k and they're going to let you know about it VERY soon. They did with me anyhow lol. Now if you screw up and do 3 day trades within those 5 days and you get flagged as a PDT and do not have 25k in your account you can have the flag removed 1 time. Once. Uno. That is it. You can be forgiven 1! time and that is it. After that if you get flagged again and still do not have 25k you can and more than likely will have your Social Security Number red flagged for life. You're banned from trading in the U.S. forever. You're done, its over. They catch you trading using someone else's SS# and you're going to prison. I have been flagged once and did not have the 25k, that is how I know this as explained to me by TD. I use TD Ameritrade and I love them. Absolutely great every time I have to call in which thankfully has only been a handful of times. Just to avoid it remember this PDT rule and don't do it.
VERY VERY IMPORTANT: If you read the rule on PDT it will tell you you're allowed 4 trades in 5 business days. You'll find with just a quick google there's people out there telling others you can do 5!!! This is FALSE!!!!!!! The second you make the 4th trade the red flag flies. So you can do 3. NOT 4! This is one of those VERY GRAY areas they hang people with. Sadly how its worded and how its applied are TWO VERY different things. I have been through it, you're allowed 3, I don't give two shits what that link says, it is 3 in 5 days. You're trading platform will tell you how many trades you have made in the time frame. Simplest way to avoid it is simply not to day trade at all. If you're new, day trading sounds great to some, but trust me its not what you think. Yes you can make money VERY quickly if you jump in on the right run. However jump on the wrong one and from hours and hours and countless more hours of watching both stocks and cryptos run, they tend to drop WAY faster than they go up. If you think you're the man and you're going to prove everyone wrong about day trading well I wish you my absolute best. You're going to need it. I'd take the bet that your cocky ass gets shot down and beat to hell long before you show everyone who's the man 999.9 times out of 1000. SO good luck, my advise if you're new just don't. Seriously just don't!!
I use TD Ameritade, they had the best account options at the time I signed up for the account out of all their competitors. I haven't looked in the last few years at what others are offering now but I know many of them still have minimum deposits but TD still does not. I certainly didn't have 2500 bucks or more to open an account with at the time so it was TD. They might actually get annoyed if they read this part lol because I am going to teach you how to get the most from it for the least money. But if just a few sign up I'm sure they'll get over it very quickly lol. Now when you sign up with TD in a week or two they are going to send you an email offering you a class on how to trade stocks. If its still the same and as of about 6 months ago when I signed my sister up it was, they offer you a free trial to this class. This is a paid class. TAKE the free trail and USE it. You have one week to learn everything you can. I learned all the basics in one night. It's very easy to learn and I really thought the explanations in the videos and text are great. I then went on to teach myself everything else. You can pay for the class, its not that expensive and I'm sure it would be very detailed and you'll learn a ton. I'm a cheap ass, I'm not paying to read stuff I can read for free. But that requires a lot of research. If you don't have time for hours in front of a computer it might be easier to just pay for the class because all the information is right there. This is from one companies perspective, even after the class you should look at other perspectives. There are 1000's of them. You can NEVER EVER learn enough about this I promise you that.
Ok so you've opened your account and taken the class, you know the basics of making a trade. This is where DD starts. Your trading platform is full of numbers and letters/abbreviations that you must understand. EPS for example, Earnings Per Share. This is one of the main things you need to really really understand. This is how much money the company is making per each single stock, in other words as stated by https://www.investopedia.com/terms/e/eps.asp it is "
What is 'Earnings Per Share - EPS'
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability. EPS is calculated as:
EPS = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares"
If they have a positive EPS the company is operating in the green which is clearly good. Now if it is negative this can be bad yes, but not always. You have to find out why the EPS is in the red. As an example if you read my post about the end of cancer you saw LLBO is the stock I hold. LLBO has NOTHING in the EPS box. It is not negative and it is not positive it is just blank. Well that's bad right? NO. They are in R & D and have been for ever it seems lol (I still got their back) so they have no revenue yet to generate an EPS figure. If it is red do not just dismiss them, find out why. Market cap is another thing you need to understand. It's the total value of the company as valued by its shareholders. This can go up with good news and down with good news and yes of course it can go down with bad. I have seen several stocks drop with good news. All have valid reasons that you probably won't understand at that particular moment simply because you and I are not on wall street. They know things and get news well before us. This is where having a broker might come in handy.. But you'll pay for it. Get a good one and he/she will pay for themselves in the long run. But once again I'm not paying someone else to do stuff I can do myself. But you're not me, I'm not you so as you learn a broker/advisor might be very beneficial to you.
Same subject, just keeping the paragraphs smaller, drives me crazy when something is 100k characters and one giant paragraph, I usually have a hard time reading stuff like that. But moving on.
Institutional holdings(IH). This one is a major major indicator that a company is doing well. IH is the percent of the stock that is owned by other companies. If it is very high that means lots of other companies see value in them and own their stock. Yes companies can own stocks to, not just individuals. If they have no IH that is not a bad thing either. But some is always better than none from my observations of performances in relation to IH.
Volume. TD will tell you to make the 250k rule part of your plan. I concur. The 250k rule is simple. If it has a long solid run of months or even better years where everyday its moving 250k or better in volume DAILY then it is worth a look. Under 250k? Stay away. That is a pretty good rule. The only time I would break it is if I got in on a newly listed company early on before everyone else. And naturally if I'm doing that I clearly am convinced they're going places. The VERY LAST thing you want to do is buy a dead or dying stock. If the volume is down you need to figure out why if the company has your interest enough to look into it. Low volume DOES NOT always mean the company is dead or dying, once again they could be in R&D and haven't really been discovered yet. There are some gems in the penny stocks so if you're learning to invest but have limited funds this is where I think you should be looking. Find that gem. Look at it like this. You have 100 bucks to invest. You buy 2 shares of whatever for 50 a pop. It goes up 2 bucks a share. You made 4 bucks. Try not to spend it all at once now lol. You find the gem that's in the garbage stocks as penny stocks are often called and you're hundred bucks has bought you 100,000 shares. If you did your homework and this penny stock is a winner and you've managed not to take the smaller profits on way to its rise you potentially a few years later made a very nice profit. But penny stocks are just that, garbage mostly. 99% of them will fail. 99 out of 100. Let that sink in. To make money long term you need a winner, and you need a lot of them. QUANTITY is everything here. The more you have the more you make. With that 99% in mind consider the stocks that are maybe in the 5-25 maybe even 50 cent range. These are a little more established. ALWAYS look at a companies age. Your platform should have a good part of this information. How you invest is entirely up to you. You can even buy less shares of much more valuable/stable stocks. But then it has to run massively or you have to hold it for 30 years to make any kind of decent profit. The ones with dividends if you compound(reinvest 100% of dividend profit) can also pay off in the long run. It has worked rather well for Mr. Buffett. Compounding is wealth building!! For me finding that gem seems like the better play but I am also ok with taking rather large risks. If you're not.. DON'T!!! Keep your head on straight!!
OK this is getting long so to sum up your stock market account get to KNOW it. Everything. You know that if you are reading a book and you do not know the meaning of a word and you continue to read the book without learning the definition of said word? Well that might make the ending of it very disappointing because that ONE word. That one word was so massively important that it had the power to change the ending for you!!! Same thing here with your account. If its on a page in your account, KNOW what it means. It, whatever it may be, could be the reason you made money or lost it. UNDERSTAND every abbreviation/letter/number box/combo before your eyes. KNOWLEDGE is emotion control. KNOWLEDGE is POWER! Only you can decide to be the man or the mouse. Don't let that little thing you where to lazy to look up burn you.
ONE of your BEST!! tools to help you learn is what is called a paper money account with TD Ameritrade or something similar. Paper money is a play account more or less. They give you 200k of fake cash to play with. Paper money uses all the real stocks and all the real prices delayed 10-20 minutes. It simply would be a ridiculous waste of real money to run paper money with real time quotes. That computing power is better used elsewhere like it is. But this delay should not even matter. You're not practicing to be a day trader, you can't.. the delay thing.. you're learning to trade for the long term. I still have and still use my paper money account. Daily. I haven't bought anything in a year or so but I did buy a lot of things a year or so ago. So how am I doing in 1 year? The 200k they give you I have managed to turn into 1.5 mil at one point. Its down today but its fake and I'll probably just keep it like it is to track these stocks over time. I have pretty much all the weed stocks in paper money. Doing rather well until today, THANKS JEFF, you stupid old ass closed minded fuck.. Sessions is who I'm talking about.. Jeff Sessions. Just gonna stop there on that.... NOW from what I have learned I feel you will benefit a LOT more by being realistic with how you spend the 200k. You can only afford a few hundred bucks? ONLY USE a few hundred bucks of that 200k. KEEP IT REAL!! It's all about perspectives. Buy a few stocks that you think are good. Keep it real. Then spend an amount you don't have. Say 50k. Buy it and forget it for a year. Think of it like this. I'm new and I'm learning. In real life I can afford to lose 500 bucks. Wait did I just say LOSE? Yes. NEVER invest more than you can afford to lose. EVER!!! But back to my point, spend that 50. Have your realistic ones. Now here's the question. Can and if yes, how long until your realistics become that unrealistic one? CAN it at all? Did you pick right? USE THIS TOOL!! You will start to see everything in more and more detail. THIS IS SIMPLY the best tool if you really want to learn to trade like a pro. It is the ultimate test of your DD except in paper money if you're wrong it doesn't cost you real money. IN the end all we have is the time we have here and what we do with it. Use yours wisely. Know this isn't gonna pay off your home tomorrow. But like I have said when you make the move to start investing then you have made the move in your life where you're living and planning for rest of your life. More or less you've become an adult. Not sure how the hell this happened to me but I'm rolling with it haha.
Chapter 2 lol Crypto exchanges.
Before I get into the crypto exchanges I personally feel you should learn to trade stocks first. It gives you an advantage. However that takes a lot of time. Right now is one of the best times to get into crypto. So you might not really have the time to learn it all. So while I think you should learn to trade stocks first I think you should get crypto accounts set up first. They take way longer to get done but crypto is just a bigger better market for now. Reason I say this is the SEC hasn't put the smackdown out yet on crypto. I do believe its coming very very soon. SO there's that risk. Kinda hard to argue with the historical gains the stock market has that crypto simply doesn't because of its young age. So historically stocks are the best but history is still being written everyday. The stock market also will never be banned, crypto might. I do not think it will in the states but it is an ever looming threat surrounded with great uncertainty. So which path you choose is up to you. Willing to risk it all? Yes? Then you're ready to invest in the stock market. Really Really willing to risk it all for quicker profits? Then crypto is for you. Or you can do stocks related to crypto, quite a few and growing and some of them are doing VERY well. There's all sorts of other things you can invest in also. Stocks, crypto, bonds, hedge funds, mutual funds... the list goes on and on. Its all about the risk you're comfortable with. Some things are very safe but don't have huge returns but a return that is almost certain. So again what's your risk level. This is more of the mental stuff. Set your level and STICK WITH IT! Just cause you wrote your own rules doesn't mean you get to break them. A plan to invest will work the best when it is followed to the letter!
Ok now the exchanges themselves.. Coinbase, simple to use, high fees. One of the safest places to buy bitcoin or either or LTC.. and hopefully RIPPLE come later this month. IF you know nothing about trading crypto the simplest explanation is BTC or Ether are the two main currencies that you use to buy all the other alternate coins. They are the cash to buy the stock aka coins in this example. The alt coin exchanges are a list that is ever growing. I personally have several accounts with several exchanges because they all seem to have their own selection to choose from. Some are full and I mean full of shitcoins that are going to fail. Some have far fewer shitcoins. Bittrex is my favorite by far but they are not accepting new accounts currently. Keep in mind as you go to set up these accounts you and probably no less than 10,000 people are doing the same thing at that very moment. This has been happening for months and its only gonna get worse until they get their systems up to par. So getting these accounts verified can take weeks. They say that there are enough people on this planet now that the second you have a thought 10,000 others just had that very thought with you. Hence the 10k reference. This is also why going a little off topic here, if you have a great idea for a new product.. you'd better act on it and fast because you're NOT alone with that idea! While there is not a single way currently to say if this is actually true but I'd bet its actually far too low of a number. While we all think we are special and unique which we are to a point.. we are not all that different at all.
Now just like the stock market exchanges you need to understand absolutely everything on every page of your account. You need to watch some videos on how to transfer your coins and how to store them away. There are many options for many types of people. So you'll be able to find something you like I'm sure. I've seen the Nano Ledger is a very popular item.. If you do not transfer your coins from your wallet or whatever your doing correctly you can send your money into cyberspace forever. It is estimated that over 1 MILLION BITCOINS have been lost from for lack of a better term, stupid fucking people who didn't take 5 minutes to learn how to do it right. Here's an idea... Write a program that basically goes fishing to find those bitcoins? I have no idea about that crap so that might not even be possible but it crossed my mind so why not. I'll throw it out there.
Understand everything. Tired of reading that yet? Good. Understand everything in your account. KNOW what it all means. I'm not doing it for you so you have to. Knowing your accounts and how they work takes away stupid unnecessary stress. Read and/or watch videos. Know where you're going to land BEFORE you jump.
Here is the really great thing about trading crypto. There are ZERO day trading rules more or less. You can buy and sell as fast as you can push the buttons. However each transaction under the 2018 tax code makes every transfer a taxable transaction. So keeping you're trades to a minimum will help greatly at tax time. Understanding captial gains tax long vs short holds is very important.
I cannot stress enough how important it is to understand absolutely everything you see on the pages of your accounts. Why its there and how to use it to find winners. The crypto exchanges are far less detailed than the stock market. They do not have a 1/16th of what a stock market account has for built in tools and resources. But they are still young. Currently, twitter, reddit and google are your better sources for info on crypto. The two types of exchanges do have some differences. For example crypto has a % column. This is the change in value represented in percent in the last 24 hour period. Every second time moves forward right here and now the second that happened exactly 24 hours ago moved forward also. This is why one minute you will look at this number and it will say -6% and two minutes later it says +100%. Its because that second 24 hours ago just entered a huge drop in price. So if you do not realize this it can fool you into thinking you're having a great day when really the price/value hasn't moved hardly at all.. only thing that has is that second 24 hours ago. Pay attention to your overall value of your holding not the % of the 24hours. You will learn to use it like this but this could be WAY WAY better. Now my stock market account it has a % column also. This one is actually IS how it should be. It tells me the percent of my account now verses when I bought the stock. So if it says I am +22% I am sitting at a 22% profit. No guess work, its just there, what it says is where I'm at for the year. Simple and straight forward. Hopefully a crypto exchange comes out that has both. That would kick ass. Poloniex does have a pretty good break even calc thing.. I played with it once lol. I know where I bought in and what my average is.
Alright I think that is enough. Learn what it all means. Everything. As you learn all these basics of how these exchanges work you will get a feel for your own risk level. Risk/comfort same thing. You will find yours and do yourself a favor, don't push it too far. Stress kills. Takes years off your life. Learn it and pick the good ones. Look for things you like if you're not sure what to invest in. Is it something you use? Solar and space.. GOOD long term investments with the RIGHT companies.
If you're not sure what stage in life you are at let me present this. Life is all about perspective. How you see things and what stage you're at can more or less be answered by looking at the following two charts. Which one do you look at as important? They are the same chart, at the same time about 30 seconds apart. Its all about perspective. Zoom is changed is all.
Are you the type that looks at this?
Or THIS? (the one below) If you're looking at this one then congrats, you're growing up and getting the foundation poured for many years to come. If you're still looking at the first one, don't worry you'll look at the BIG picture soon enoough.
The line will be explained later on when we get into how I read the charts. I've called it over 90% of the time when the run is over. All the answers are right there with that line as primitive and simple as my method may actually be. So far its not broke so I'm not fixing it. Next one will be DD. I'll be giving you all the things I look at as super valuable information. Some of it was mentioned here already.
Cheers all!
WANT A BETTER LIFE? well...then... WHAT??? are you waiting for? Not going to change itself..
