So I'm thinking of doing a bit stock trading online - Stories, Advice?

[Koinek]

A friend of mine made a few hundred bucks the last couple of week trading GM stocks. I'm thinking of following in his footsteps. I mean with Citigroup at $.97. It's not a terrible time to get in and start. I have very little experience but as an economics major in college, I've at least got basic understanding of how things work.

So I'm just about ready to jump off the edge and get in. I was thinking of signing up for an account with e-trade to get off my feet. Just starting out with a hundred of so USD. I'm not looking for huge gains. Just a way to ease the strain on my wallet a little.

I was just wondering if anyone else here is or has done the same. Got any hints or advice? Any caveats? Any stories of success/failure?

 

[Plecostomus]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

Yeah.

Do you understand the market exists as a way for companies to raise operating capital? It's not a god-damned slot-machine that exists for people to make a "quick buck" on.

My advice is look up the "dot com" bubble, and study the effect "day traders" had on some of these start-up companies.

 

[Mr Awe]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

Here's some advice. In the best of times it's not very wise to just take a chunk of change and toss it in the market in the hopes of making some quick cash. Odds are you'll lose it. That's even more true now! Haven't you been paying attention to the freaking news?!

You need to ditch the notions of picking an individual stock and making some quick money. You need to dollar cost average your way into the broader market over time. Stocks are cheap and the returns for investments made now are likely to be above average in the future based on historically comparable P/E ratios. But, a one time investment in a single stock is not the way to go. You'll lose more often than not.

Find a no load, low fee broadbased mutual fund. I like Vanguard and their S&P 500 Index fund is very low fee. Then, invest money regularly into it every month, even if it's only $50 or so. By investing regularly like this you'll buy more shares when the price is low and fewer when they're high. By investing in a broadbased fund, you reduce the risk with an individual stock nosediving.

And, it'll take time. Don't expect quick cash. Be patient. Invest regularly now and down the road 5 years or more you should see the returns.

Mr Awe

 

[Mr. B]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

If you're looking to make money you'll probably have better luck at a craps table. $100 is a good amount for experimentation though, just to learn how e-trade works.

 

[Holdfast]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

I was just wondering if anyone else here is or has done the same. Got any hints or advice? Any caveats? Any stories of success/failure?

Do lots of research and be prepared to spend a lot of time on the net or you will lose money day trading.

 

[Docbrown777]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

Don't go shooting from the hip saying "Oh that stock seems low."

You'll lose a ton of money.

Do tons or research, learn to read charts, read tons of news etc. There are chat rooms and other message boards about this stuff.

If your disciplined and know what you are doing you can make money. However, don't think you're going to figure out a way to get rich off it. You can make money though.

One of the biggest problems people have is that in order to make money and make all the work worth it you have to work in large amounts . I'm talking about opening brokerage accounts with 25,000 in them with margin that gives you up to at least 50,000. You can't just take 1,000 and turn it into 5,0000 or 10,000 in a year. That's pretty much impossible. You can take 25000 and turn it into 100,000 in three years though. IF YOU KNOW WHAT YOU ARE DOING.

So many people get into the market and don't know what they are doing and just shoot from the hip and lose their money. When a stock goes up they sell right away cause they want their profit before it goes back down and when it goes down they don't sell because they think it will come back up and then it keeps going down and down till they finally sell for a huge loss. (this is called eating like a bird and shitting like an elephant and many beginners do it).

If you're interested there is a site that I visit now and then at

www.daytradingradio.com

It has a good community and isn't just for day trading people. The guy that runs it also makes a lot of trading education videos. Many which are free. The being successful at the stock market is just like anything in life. If you work hard at it it can pay off. If you just throw darts at the stock symbols in your local paper and buy based on that you will probably lose.

Edit: oh also, I would stay away from any bank stocks. There is a ton of bad news there and when the market does rally the banks will not return nearly as fast as many other sectors. GM also recently took a dump because they say they might not be able to avoid bankruptcy. Hope your friend didn't get burned by that.

Also, you might want to just try paper trading for a while before you jump in with real money. You say you want to try with 100 bucks first but commissions alone will take away possible a 1/4 of that right away. So you'll have to make back 25% just to break even.

I think most online brokers require you to put in a few thousand just to open an account.

 

[Tomato]

Re: So I'm thinking of doing a bit stock trading online - Stories, Adv

Here's my advice granted this is coming from somebody who has currently lost 40% in the market. I would pick a stock that is going to be around for a long time (ie your cokes, McDonalds, etc). fine a low price you like. Buy it and wait ~5 years for us to get ourseleves out of this economic mess.