Home Upgrade Search Memberlist Extras Hacker Tools Award Goals Help Wiki Contact

Stocks 

[Specialists] Stock Mega Thread |Under Construction| Feel Free To Post

[Image: 87xKQqu.png]

[Image: e6eb3c3c59087a7d605f27bd3bab7056.png]

My name is John/Jack, I first touched the world of stocks through a virtual exchange as part of a course exercise when I was 14 years old. I excelled in this earning $385,000 off the initial $100,000 given by the game. After acing the exercise and enjoying it thoroughly I decided to dig deeper into the world of stocks and through my parents invested $1,000 of my own money into the market at 15 years old. This money was quickly turned into a little over $3,000 within a month or twos time. Shortly after this I asked for a loan from my family quite literally signing an agreement with them saying I would pay back every cent given to me, no matter my success or not in the market. I was given $15,000 which I then proceeded to actively day-trade with. Since then over the last 3ish years I've completely paid my loan back and have amassed ~$270,000 for myself which I still hold in the market and actively trade with on a daily basis.

[Image: d53671751804f07828e21c461c0c0c72.png]

Please note, I am not a licensed stock-broker. Any and all information presented here is for informational purposes ONLY. Do not expect to leave this thread and be a master of the stock-market. It takes a lot of self-study, practice, and mistakes to effectively trade by any means. My only goal with this thread is to give a solid foundation for those interested, and set you on a path to be able to learn on your own and hopefully trade and be successful later on.
I highly suggest that everyone starts with a virtual stock exchange prior to investing ANY money into the real market. This will save you a lot of headache, and money.
It is also important to note that you CANNOT legally trade stocks if you are under the age of 18. If you wish to you will need to have a parent/guardian open an account for you and execute trades according to your wishes. I also suggest prior to investing you amass the appropriate funds($500+ preferably. Though $1,000+ is optimal.)

Beyond this, do not get held up if you do not earn money immediately. If you let emotions run your trading, you will always, ALWAYS lose. Before taking a position in any stock, you should always decide how much money you're actually willing to lose should it tank completely and only invest that much. After you've decided an amount you need to decide on an exit point for that given stock, if you've earned $500, maybe it's time to get out. If you've lost $250, maybe it's also time to get out.
Decide your exit levels well before entering any and all traded, and stick to them; if you don't and get greedy you very well may lose everything.
Remember that nobody ever took a loss, taking a profit. So even if it's only $50, that's $50 you didn't have before and $50 more you can invest into the market.
[Image: 44cb06bd2d45612f6511a517878a3c4c.png]

Investopedia has the best reads in terms of extreme basics and understanding of this all. So I highly suggest you navigate to the following links and read them completely(in order) before proceeding any further on this thread.

Stocks Basics: Introduction
Stocks Basics: What Are Stocks?Stocks Basics: Different Types Of Stocks
Stocks Basics: How Stocks Trade
Stocks Basics: What Causes Stock Prices To Change?
Stocks Basics: Buying Stocks
Stocks Basics: How to Read A Stock Table/Quote
Stocks Basics: The Bulls, The Bears And The Farm

[Image: 1ad241040e19e1bfaaa6bd55c0191605.png]

What is a stock?: Simply put, When you own a "share" of a stock you are a part "owner" of the company, albeit a minuscule portion you "own".
The official definition: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

What is a share?: Generally this is used interchangeably with "Stock" however they are in-fact different. While stock refers to the company's ticker or the company itself generally (GOOG, APPL) a "Share" is a portion of the given stock owned. A unit of measure basically! So you may own 10 shares of Facebook while I own 150 shares; we are however both owners of Facebook stock
Get it?

What is a ticker symbol?: "Ticker" is simply a way to refer to the symbol used to represent a given stock. So instead of saying "Exxon Mobil" I can simply refer to it as XOM. Each is unique to the company and they are never used more than once.

What in the hell are NYSE? NASDAQ?
These are what we call Stock Exchanges, basically a market where buyers connect with the sellers. NYSE refers to the "New York Stock Exchange" one of the most prestigious and commonly known exchanges in the world, with about 2,800 companies listed.

Blue chip? Pink Sheet? The fuck?: Don't worry. I said the same thing at first. Simply put, Blue Chip refers to well-established, large and financially sound companies. Think Wal-Mart, Visa, Intel, Etc.
Pink Sheets however are companies that for one reason or another are not listed on a major exchange. The majority of these companies are small or foreign companies which not a whole lot is known about, or aren't very important.

How do people decide what a stock is worth…like, what makes a stock go up and down?: Stocks move up and down based on a combination of fundamentals about a company, like earnings, leadership changes, and any news events surrounding the brand. The fluctuation of a stock’s price is also dependent on people’s expectations of what the forward motion of those fundamentals is going to be.

Is it OK or advisable to own stock in only a single company? If you put all of your money into one company and things go poorly, the stock can crash and take your investment down with it.
That’s why most people diversify their stock holdings, in order to hedge against having all of their eggs in one basket, should the basket implode. Most successful investors advise diversifying holdings by sector and allocating different amounts of money to various stocks and bonds.

Are all traders really methed out lunatics like Jordan Belfort?:
No. Not quite. Most traders are fairly normal people like you or me. (If you're normal...But then again what exactly is normal?)

[Image: bea07f15912614d35b8f2f657aabcb8b.png]
DD: Short for Due Dilligence, Generally, due diligence refers to the care a reasonable
person should take before entering into an agreement or a transaction with another party.

EPS: Is the monetary value of earnings per each outstanding share of a company's common stock.

P&D: A pump and dump scam is the illegal act of an investor or group of investors promoting a stock they hold and selling once the stock price has risen following the surge in interest as a result of the endorsement.
The stock is usually promoted as a "hot tip" or "the next big thing" with details of an upcoming news announcement that will "send the stock through the roof". The details of each individual pump and dump scam tend to be different but the scheme always boils
down to a basic principal: shifting supply and demand. Pump and dump scams tend to only work on small and micro-cap stocks that are traded over the counter. These companies tend to be highly liquid and can have sharp price movements when volume increases. The group behind the scam increase the demand and trading volume in the stock and this new inflow of investors leads to a sharp rise in its price. Once the price rise has formulated, the group will sell their position to make a large short-term gain.

Averaging Down: This is when an investor buys more of a stock as the price goes down.
This makes it so your average purchase price decreases.

Bear Market: This is trading talk for the stock market being in a down trend, or a period of falling stock prices. This is the opposite of a bull market

Beta: A measurement of the relationship between the price of a stock and the movement of the whole market. If stock XYZ has a beta of 1.5, that means that for every 1 point move in the market, stock XYZ moves 1.5 points and vice versa.

Blue Chip Stocks: These are the large, industry leading companies. They offer a stable record of significant dividend payments and have a reputation of sound fiscal management. The expression is thought to have been derived from blue gambling chips, which is the highest denomination of chips used in casinos.

Bull Market: This is when the stock market as a whole is in a prolonged period of increasing stock prices. Opposite of a bear market

Buy To Cover: To Buy To Cover means that you are closing out your short position by buying the shares. You make money when you sell the shares at a high price and buy them back at a lower price. For example, if you short sell 1000 shares of company ABC at $12 and buy to cover at $11, you would have a profit of $1000.

Common Stock: Common stocks are the most typical form of stock sold over the stock exchange. Common stock allows shareholders to vote on key issues of the company - their vote is counted in relation to their percentage ownership of the company. Shareholders can vote on the board of directors of the company who make strategic decisions for the corporation. Common stock shareholders are entitled to dividend payments, but the corporation is not required to pay them.

Day Trading: The practice of buying and selling within the same trading day, before the close of the markets on that day. Traders that participate in day trading are often called “active traders” or “day traders.”

Dividend: This is a portion of a company’s earnings that is paid to shareholders, or people that own hat company’s stock, on a quarterly or annual basis. Not all company’s do this.

Exchange Traded Fund(ETF): These are investments that first became popular in the US around 1993, and have since taken off. ETFs are investment funds that individuals can buy with money, which are traded on the different stock exchanges. Each ETF; just like stocks, have their own individual ticker symbol which can be bought or sold through a broker / dealer on the different exchanges. When investors give their money to the ETF Company, their money will go in to a pool of money which is in turn invested in to the underlying assets.

Execution: When an order to buy or sell has been completed. If you put in an order to sell 100 shares, this means that all 100 shares have been sold.

Hedge: This is used to limit your losses. You can do this by taking an offsetting position. For example, if you hold 100 shares of XYZ, you could short the stock or futures positions on the stock

Index: An index is a benchmark which is used as a reference marker for traders and portfolio managers. A 10% may sound good, but if the market index returned 12%, then you didn’t do very well since you could have just invested in an index fund and saved time by not trading frequently. Examples are the Dow Jones Industrial Average and Standard & Poor’s 500.

Initial Public Offering (IPO): The first sale or offering of a stock by a company to the public, rather than just being owned by private or inside investors.

Margin: A margin account lets a person borrow money (take out a loan essentially) from a broker to purchase an investment. The difference between the amount of the loan, and the price of the securities, is called the margin.

Market valuation the number of shares outstanding multiplied by the stock price. For example, company ABC has 1,000,000 shares outstanding and a stock price of $10 a share, resulting in a $10,000,000 market valuation.

Moving Average: A stock’s average price-per-share during a specific period of time. Some time frames are 50 and 200 day moving averages.

Portfolio: A collection of investments owned by an investor. You can have as little as one stock in a portfolio to an infinite amount of stocks.

Pink Sheet: A daily publication compiled by the National Quotation Bureau with bid and ask prices of over-the-counter (OTC) stocks, including the market makers who trade them. Unlike companies on a stock exchange, companies quoted on the pink sheets system do not need to meet minimum requirements or file with the SEC. Pink sheets also refers to OTC trading.

Preferred Stocks: With preferred stock. Shareholders have no voting rights, but usually are granted regular dividend payments.There is no guarantee that your stock will be worth more than you bought it for in the future! The price of the stocks is typically affected by the demand for their shares on the stock exchange. Demand is fueled by investors interested in the company's earnings prospects, expectations, and emotions on the company's long term prospects.

Quote: Information on a stock’s latest trading price. This is sometimes delayed by 20 minutes unless you are using an actual broker trading platform.

Resistance A stocks price where sellers often emerge, thus preventing a price increase. When a stock breaks through resistance, this is typically a good time to buy.

Sector: A group of stocks that are in the same business. An example would be the “Technology” sector including companies like Apple and Microsoft.

Short Sell: Short sell means that you are selling shares that you do not currently own. This is the same thing as selling a stock except you never own the shares. You need to borrow the shares from your broker.

Spread: This is the difference between the bid and the ask prices of a stock, or the amount someone is willing to buy it and someone is willing to sell it.

Stock Symbol: A one-character to four-character, alphabetic root symbol, which represents a publicly traded company on a stock exchange. Apple’s stock symbol is AAPL.

Support A stock’s price where buyers emerge, thus preventing a price decrease. When a stock breaks through support, look out below.

Volatility: This refers to the price movements of a stock or the stock market as a whole. Highly volatile stocks are ones with extreme daily up and down movements and wide intraday trading ranges. This is often common with stocks that are thinly traded, or have low trading volumes.

Volume: The number of shares of stock traded during a particular time period, normally
measured in average daily trading volume.

Yield: This usually refers to the measure of the return on an investment that is received from the payment of a dividend. This is determined by dividing the annual dividend amount by the price paid for the stock. If you bought stock XYZ for $40-a-share and it
pays a $1.00-per-year dividend, you have a “yield” of 2.5%

[Image: 71a751bd7ce89ba93c3dc3fed0be898e.png]

Any website with a red asterisk (*) next to it is a personal favorite and a resource I highly recommend looking at.
This list will be added too fairly consistently, and I'm open to any suggestions for additions.

Getting started with Investing:
http://www.aaii.com/classroom
http://www.investopedia.com/investing/investing-basics/ (*)

KEY Websites for EVERYONE
http://www.investopedia.com
http://www.marketwatch.com
http://finance.yahoo.com/
http://www.bloomberg.com/markets/stocks/ (*)

Charting Websites(Advanced)
http://ycharts.com/
http://stockcharts.com/ (*)
http://finviz.com/

Informational/Incredibly Useful Websites:
http://www.morningstar.com/
http://www.briefing.com/ (*)
http://seekingalpha.com/
http://www.sec.gov/edgar/searchedgar/web...6XXo5RdWCk (*)
http://www.economist.com/
https://www.stockrover.com/sr/ (*)

Online Portfolio Managers:
https://www.wikinvest.com/account/portfolio/regx/start (*)
http://money.cnn.com/

Stock Boards/Forums:
http://www.aaii.com/boards/ (*)
http://www.hotstockmarket.com/f/32/hsm-stock-forum
http://onlinetradersforum.com/
http://investorshub.advfn.com/

Books To Read:
The Intelligent Investor by Benjamin Graham
A Random Walk Down Wall Street by Burton G. Malkiel (*)
The Black Swan by Nicholas Nassim Taleb (*)
If It's Raining in Brazil, Buy Starbucks by Peter Navarro
Always a Winner by Peter Navarro (*)
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner (*)
Types Of Broker


When choosing a brokerage, there's a lot of things you should consider as no two brokerages are ever the same.
There's also a few type of brokers, each serving a different purpose.

Full Service Brokers are brokers there to hold your hand the entire way, they provide you with advice, updates and a platform to manage your investment(s). Depending on the broker, you can simply specify an industry and they will take full control of your portfolio investing into what they think will serve you well. You should opt for a Full Service Broker if you've a large capital and are looking to reduce your risk as much as humanly possible. It is important to note that Full Service Brokers ARE more expensive and unless you're dealing with a substantial capital you should avoid them.

Online Stock Brokers are the most common and most appealing choice for the majority of investors. They provide general brokerage services, up-to-date information on your portfolio and multiple stock trading platforms to fit your investment strategy.

Discount Stock Brokers offer stock broking services for lower fees than a full service broker, you can consider the majority of online stock brokers discount brokers. They provide general advice, market reports, and stocks tips. In the end though, it's up to YOU to pull the trigger on anything compared to a full service broker which holds your hand a bit more.

Picking A Broker

Full Service Brokers

EdwardJones
UBS
RaymondJames
Merill Lynch
Wells Fargo Advisors
Morgan Stanley

Online Brokers

E*TRADE E*TRADE charges $12.99 for both market and limit orders – including penny stock trading for $1 or less and all OTCBB stocks. You need at least $1,000 to open an account with E*TRADE. And there is a $40 quarterly fee for using their services. E*TRADE is a cheap online broker mainly for active traders who don’t need a lot of handholding.

FIDELITY Fidelity charges $19.95 for both market and limit orders – including all penny stocks. You need an opening balance of $2,500 to open an online account. But once you do, there is no quarterly or annual fee.
Fidelity offers a lot more research capabilities – and is marketed for the more serious investor (with a higher net worth) who likes the bells-and-whistles of a full-service broker.

Scottrade Scottrade is one of the cheapest online brokers you will find. It charges $7 for both market and limit orders. There are no quarterly or annual fees. So even if you are an inactive investor, you won’t be penalized for “not trading.”

Charles Schwab Charles Schwab may be the pioneer in the discount broker world, but it isn’t the cheapest. It charges $19.95 for market and limit orders – and an additional $0.015 for all shares over 1,000. In addition, Schwab charges you a service fee of $45 a quarter.
To open an account with Schwab, you need a minimum of $2,500. And for small-cap investors, you need to be aware of one thing…
It only costs $19.95 to buy or sell any small-cap or penny stock. However, if you buy more than 5,000 shares, you have to pay $0.003 for every additional share.

TD Waterhouse TD Waterhouse charges $17.95 for market orders and $20.95 for limit orders. You need a $1,000 starting balance to open an account with TDW. And you are charged a $25 quarterly fee – which is waived if you make three or more trades in a 6-month period.
For you small-cap (or penny stock) investors, there is no additional fee to trade or invest in OTCBB stocks.

Ameritrade Ameritrade is one of the better-known deep discount online brokers. It charges a flat $10.99 for all market and limit orders – and that includes your OTCBB and penny stocks. You need $2,000 to open an account withAmeritrade. And you are charged a $15 quarterly fee if your account balance falls below $2,000 OR you don’t make four trades every six months. (In other words, if you make four trades, you are exempt from the $15 fee).

Vanguard Vanguard is a more full service online broker – similar to Fidelity and Schwab. So it should come as no surprise that you must pay more that you would with E*TRADE or some other deep discount broker.
Vanguard charges $25 to execute any market or limit order. It assesses a $30 annual service fee for every client. You need a minimum opening balance of $3,000. And if you are interested in buying penny stocks, it gets a little hairy. You pay a flat $20 commission per play plus 2% of the total principal.

Discount Brokers
Scottrade Scottrade is one of the cheapest online brokers you will find. It charges $7 for both market and limit orders. There are no quarterly or annual fees. So even if you are an inactive investor, you won’t be penalized for “not trading.” The only drawback for penny stock investors is this
In addition to the $7 flat commission, they charge an additional fee of 0.5% of the total principal. So if you spend $500, you owe Scottrade an addition $2.50 added onto that $7 commission – making your total commission come to $9.50.

OptionsHouse The cost to trade stocks is a flat $3.95, making it one of the lowest cost stock trading alternatives. There are no maintenance fees or monthly minimums, either.

OptionsXpress Stock trades cost $9.95, which is a bit more than some other discount online brokers. With OptionsXpress, however, there is no additional cost for broker-assisted transactions, which makes it a good option for those that want some help with their trades.

E*TRADE E*TRADE charges $12.99 for both market and limit orders – including penny stock trading for $1 or less and all OTCBB stocks. You need at least $1,000 to open an account with E*TRADE. And there is a $40 quarterly fee for using their services. E*TRADE is a cheap online broker mainly for active traders who don’t need a lot of handholding.

Trade King Trade King is one of the lowest cost discount brokers, with both market or limit stock trades costing $4.95. And there is no additional cost for broker-assisted trades

Getting Started: Due Dilligence


So, you've done it.
You've got a brokerage, you've got some funds. Now all you need to do is clamp your ass down, pick a stock(or two, or three) and invest.
Easy right?
Wrong.

A lot goes into choosing a stock as no two stocks will act the same. Each stock has it's own pulse, some go fast, some go slow, some go up, some go down, some do all of the above and then some. It's up to you as an investor to find that pulse and make a bid on it. So, how do you go about that? How do you pick a stock which will earn you money and not crash and burn?
Well. There's no sure fire way to do this, and every investor has their own way of going about this. But I'll walk you through the foundations and one of the most important things for you to do, and know about.
Due Dilligence.

Investopedia has one of the best summaries of how to go about this, so instead of me writing it all out. I'm going to just paste it here.

Step 1 - The Capitalization of the Company
It really helps to form a mental picture or diagram of a newly researched company and the first step is to determine just how big the company is. The market capitalization says a lot about how volatile the stock is likely to be, how broad the ownership might be and the potential size of the company's end markets. For example, large cap and mega cap companies tend to have more stable revenue streams and less volatility. Mid cap and small cap companies, meanwhile, may only serve single areas of the market, and may have more fluctuations in their stock price and earnings.

No judgments should be made at this step; we are just accumulating information that will set the stage for everything to come. When you start to examine revenue and profit figures, the market cap will give you some perspective.

You should also confirm one other vital fact on this first check: what stock exchange the shares trade on? Are they based in the United States (such as New York Stock Exchange, Nasdaq, or over the counter)? Or, are they American depositary receipts (ADRs) with another listing on a foreign exchange? ADRs will typically have the letters "ADR" written somewhere in the reported title of the share listing. This information along with market cap should help answer basic questions like whether you can own the shares in your current investment accounts.

Step 2 - Revenue, Profit and Margin Trends
When beginning to look at the numbers, it may be best to start with the revenue, profit and margin (RPM) trends.

Look up the revenue and net income trends for the past two years at a general finance website like Yahoo! Finance or Google Finance. These should have links to quarterly (for the past 12 months) and annual reports (past three years). A quick calculator check could be done to confirm the price-to-sales (P/S) ratio and the price-to-earnings (P/E) ratio. Look at the recent trends in both sets of figures, noting whether growth is choppy or consistent, or if there any major swings (such as more than 50% in one year) in either direction.

Margins should also be reviewed to see if they are generally rising, falling, or remaining the same. This information will come into play more during the next step.

Step 3 - Competitors and Industries
Now that you have a feel for how big the company is and how much money it earns, it's time to size up the industries it operates in and who it competes with. Compare the margins of two or three competitors. Every company is partially defined by who it competes with. Looking at the major competitors in each line of business (if there is more than one) may help you nail down just how big the end markets for products are.

Information about competitors can be found in company profiles on most major research sites, usually along with their ticker or direct comparisons that let you review a list with certain metrics filled in for both the company you're researching and its competitors. If you're still uncertain of how the company's business model works, you should look to fill in any gaps here before moving further along. Sometimes just reading about some of the competitors may help to understand what your target company actually does.

Step 4 - Valuation Multiples
Now it's time to get to the nitty-gritty of P/Es, price/earnings to growth (PEGs) ratio, and the like - for both the company and its competitors. Note any large discrepancies between competitors for further review. It's not uncommon to become more interested in a competitor during this step, which is perfectly fine, but still look to follow through with the original due diligence while noting the other company for further review down the road.

P/E ratios can form the initial basis for looking at valuations. While earnings can and will have some volatility (even at the most stable companies), valuations based on trailing earnings or on current estimates are a yardstick that allows instant comparison to broad market multiples or direct competitors. Basic "growth stock" versus "value stock" distinctions can be made here along with a general sense of how much expectation is built into the company. It's generally a good idea to examine a few years' worth of net earnings figures to make sure most recent earnings figure (and the one used to calculate the P/E) is normalized, and not being thrown off by a large one-time adjustment or charge.

Not to be used in isolation, the P/E should be looked at in conjunction with the price-to-book (P/B) ratio, the enterprise multiple and the price-to-sales (or revenue) ratio. These multiples highlight the valuation of the company as it relates to its debt, annual revenues, and the balance sheet. Because ranges in these values differ from industry to industry, reviewing the same figures for some competitors or peers is a key step.

Finally, the PEG ratio brings into account the expectations for future earnings growth, and how it compares to the current earnings multiple. Stocks with PEG ratios close to 1 are considered fairly valued under normal market conditions.

Step 5 - Management and Share Ownership
Is the company still run by its founders? Or has management and the board shuffled in a lot of new faces? The age of the company is a big factor here, as younger companies tend to have more of the founding members still around. Look at consolidated bios of top managers to see what kind of broad experiences they have; this information may be found on the company's website or on SEC filings.

Also look to see if founders and managers hold a high proportion of shares, and what amount of the float is held by institutions. Institutional ownership percentages indicate how much analyst coverage the company is getting as well as factors influencing trade volumes. Consider high personal ownership by top managers as a plus, and low ownership a potential red flag. Shareholders tend to be best served when the people running the company have a stake in the performance of the stock.

Step 6 - Balance Sheet Exam
Many articles could easily be devoted to just the balance sheet, but for our initial due diligence purposes a cursory exam will do. Look up a consolidated balance sheet to see the overall level of assets and liabilities, paying special attention to cash levels (the ability to pay short-term liabilities) and the amount of long-term debt held by the company. A lot of debt is not necessarily a bad thing, and depends more on the business model than anything else. Some companies (and industries as a whole) are very capital intensive, while others require little more than the basics of employees, equipment and a novel idea to get up and running. Look at the debt-to-equity ratio to see how much positive equity the company has going for it; you can then compare this with the competitors to put the metric into better perspective.

If the "top line" balance sheet figures of total assets, total liabilities and stockholders' equity change substantially from one year to the next, try to determine why. Reading the footnotes that accompany the financial statements and the management's discussion in the quarterly/annual report can shed some light on the situation. The company could be preparing for a new product launch, accumulating retained earnings or simply whittling away at precious capital resources. What you see should start to have some deeper perspective after having reviewed the recent profit trends.

Step 7 - Stock Price History
At this point you'll want to nail down just how long all classes of shares have been trading, and both short-term and long-term price movement. Has the stock price been choppy and volatile, or smooth and steady? This outlines what kind of profit experience the average owner of the stock has seen, which can influence future stock movement. Stocks that are continuously volatile tend to have short-term shareholders, which can add extra risk factors to certain investors.

Step 8 - Stock Options and Dilution Possibilities
Next, investors will need to dig into the 10-Q and 10-K reports. Quarterly SEC filings are required to show all outstanding stock options as well as the conversion expectations given a range of future stock prices. Use this to help understand how the share count could change under different price scenarios. While employee stock options are potentially a powerful motivator, watch out for shady practices like re-issuing of "underwater" options or any formal investigations that have been made into illegal practices like options backdating.

Step 9 - Expectations
This is a sort of a "catch all", and requires some extra digging. Investors should find out what the consensus revenue and profit estimates are for the next two to three years, long-term trends affecting the industry and company specific details about partnerships, joint ventures, intellectual property, and new products/services. News about a product or service on the horizon may be what initially turned you on to the stock, and now is the time to examine it more fully with the help of everything you've accumulated thus far.

Step 10 - Risks
Setting this vital piece aside for the end makes sure that we're always emphasizing the risks inherent with investing. Make sure to understand both industry-wide risks and company-specific ones. Are there outstanding legal or regulatory matters, or just a spotty history with management? Is the company eco-friendly? And, what kind of long-term risks could result from it embracing/not embracing green initiatives? Investors should keep a healthy devil's advocate going at all times, picturing worst-case scenarios and their potential outcomes on the stock.
Types Of Trades
Now that you've done your due diligence and you think you've found that winner, it's time to talk about the various types of trades you can enter and what each of them really means.
For starters though, let's talk about two terms which will be mentioned infinitely throughout your time as a stock trader.
Long Trading and Short Trading.

You'll often hear a trade refer to themselves having a long position, this typically means they've bought shares of (X) stock and are holding for a long-term growth, meaning they are profiting off of the stock rising. These long trades have limited loss potential meaning you can only really lose as much as you invested.
However, at times traders will open up Short positions which in turn means they're profiting off of the stock FALLING. This is something that confuses a lot of people, but the way this is done is the investor "borrows" shares from their broker meaning that the more the stock loses, the less they have to pay back to their broker, and the more money they keep. This type of trading though has theoretically infinite loss potential as the more positive a stock goes, the more you will lose and by default the stock market moves UP. So shorting is not for the feint of heart or the inexperienced by any means.

Now let's talk about the types of orders.
Market Order:
This is the most basic and most commonly used order, basically this is either a buy/sell order and everything is executed at the ask/bid price. So if a stock is trading at $50, I'll buy it at $50.
Limit Order:
A order that is for a specific target stock price, or better. Meaning that if I put in a order for $50, I will not buy the stock if it's $51, ever. Only if the stock goes to $50 or lower will I instead purchase. This is also used on the flipside for targeted sales at specific prices or better allowing for maximum safe profit if used correctly.
Stop Order:
The risk managers/day-traders best friend.
This type of order creates an order to purchase or sell a stock at a specified range only and never before. Most often used to set a stop-loss, this is the level of which a trader refuses to lose any more money and will have their position liquidated. Incredibly useful and should be used whenever and wherever possible for maximum risk management.
[Image: mMLFEBk.gif]
ANALYSIS OF ANALYSIS?
---Last spot I'm reserving for future updates---
At this point, please post any suggestions, comments, etc you have regarding this thread.
[Image: mMLFEBk.gif]
Wow! Fantastic post so far! I will be referring back to this from time to time! Thanks for the knowledge!
Literally a great guide, will post again after I am done reading all of it.

What are some current virtual exchanges I can use, this information is clearly interesting and I wanna try it out myself.
too many "crypto enthusiast" here
too many "uneducated swines" here
subtle difference? i dont think so.
(Aug 13, 2014 09:43 PM)Ginsum Wrote:  Literally a great guide, will post again after I am done reading all of it.

What are some current virtual exchanges I can use, this information is clearly interesting and I wanna try it out myself.

http://www.marketwatch.com/game/
http://www.investopedia.com/simulator/

Those two are my personal recommendations mate. There's also plenty of apps for Android/IPhone you might want to take a peak at.
[Image: mMLFEBk.gif]
I have been investing for about a month and a half. I lost a lot of my portfolio at the end of july when stocks tanked. Although I am climbing back into it I feel like I could have avoided this If I was able to sell my stocks. So I have a few questions.

I invested 1000$ initially. I made about a 6% return in 20 days and was going to sell by 6% of $1000 is $60. I use scottrade. So its 7$ a trade and I bought 4 different stocks. So it cost me 28$ to buy them. Then If I want to sell It will cost me another 28$. That equals out to about 56$ in trade commissions I have to pay. Then the .5% principal and capital gains tax. My profit is only a few dollars at most.

So why do you suggest to invest 1000$ if commissions and taxes eat a hole in your pocket (even with a nice 6% gain in only 20 days)

What should I do about this commission stuff? Should I invest that 1000$ into maybe two stocks instead or even one? Because I like to keep my portfolio diverse with different sectors to keep risk lower.

Also, I think you should create a post on how to read charts and graphs of stocks. I've done a lot of reading about them and I think information about them would help every investor here make more money; or rather, help them know when to enter a stock or when they should notice the signs to get out of one.

Thank you!
[Image: v4EP4in.png]
(Aug 16, 2014 05:45 PM)Portland Timbers Wrote:  I have been investing for about a month and a half. I lost a lot of my portfolio at the end of july when stocks tanked. Although I am climbing back into it I feel like I could have avoided this If I was able to sell my stocks. So I have a few questions.

I invested 1000$ initially. I made about a 6% return in 20 days and was going to sell by 6% of $1000 is $60. I use scottrade. So its 7$ a trade and I bought 4 different stocks. So it cost me 28$ to buy them. Then If I want to sell It will cost me another 28$. That equals out to about 56$ in trade commissions I have to pay. Then the .5% principal and capital gains tax. My profit is only a few dollars at most.

So why do you suggest to invest 1000$ if commissions and taxes eat a hole in your pocket (even with a nice 6% gain in only 20 days)

What should I do about this commission stuff? Should I invest that 1000$ into maybe two stocks instead or even one? Because I like to keep my portfolio diverse with different sectors to keep risk lower.

Also, I think you should create a post on how to read charts and graphs of stocks. I've done a lot of reading about them and I think information about them would help every investor here make more money; or rather, help them know when to enter a stock or when they should notice the signs to get out of one.

Thank you!

Okay well, there's some things you should mention that would help me help you.

What is the price range of these stocks you were investing in?

Because $1,000 is optimal as it allows you access to both higher stocks ($50+ per if you so wish.)
As well as plenty of play room for pennies, or lowbies.
6% increase isn't nearly as much as you think, as you realized especially when it comes to total portfolio gain and you take into account commissions and all that other crap.

So, one way to think about it is this
If you invest in four stocks, $250 equivalent each. (Not saying you should do this, frankly I'd probably drop my money in two stocks personally. Regardless, using this as an example.)

So you invest $250 in JCP at $9.50 a share, that's a total of about 25 Shares once you take away the trading fee.
Great, so you have 25 shares of JCP.

Now, you also decide you want to invest in PKI which is at $45.33 a share, so you snag 5 shares of that.
Great, so you have 25 shares of JCP and 5 shares of PKI.

You also invest in ONTX at $5.53(45 shares)
and lastly you invest in MJNA at $0.15(1666 shares)

You've got your portfolio now and it ranges from higher ends (PKI) to sub-pennies like MJNA, and in the end each one can benefit you differently depending your investment strategy.
You shouldn't sell based on your total portfolio gain though as if I were to measure these stocks by a simple overall %, I'm not getting a real idea as to what is earning me money, and what is not.
Instead you should be focusing on individual winners and losers and selling as individuals, don't look to fill and empty your portfolio.

A sub-penny like MJNA if it goes up all of 3 cents has earned you nearly $50, and it could do this in an hours time and then crash back to 0.08
While PKI could take 2 months to earn you that same $50, but is a slow steady turtle that you have to worry less about
ONTX+JCP are both lower-ends that can earn you some serious dough, and fairly easily as lower gains still earn you a fair profit, while also maintaining a level of reputability that MJNA doesn't have.

Keeping diversity is a great way to lower risk, but it can also cause problems as you saw with your money being so spread out, limiting profits. I'd say in the end, stick with one or two stocks that you're confident in based on their CEO, charts, financials, developments, etc and ride em out. Profit is profit regardless of the time it takes, so even if you only make $100 over 2 months, that's $100 you didn't have before.

(I'll be honest, I completely lost track of what I was getting at while writing this post. I just got back from work and am a bit fried, I hope I made SOME sense.)

I'll definitely make a note to mention some charting stuff and do my best to explain it. Thank you for the suggestion, I should be updating the thread tonight with some stuff.
[Image: mMLFEBk.gif]
Awesome! Yeah I invested into a few 80$ stocks and a few 20-30$ ones. Im thinking about selling a stock thats been down 1% and hasnt gained any traction and throw it into more shares of a company i own thats hit a downside due to the time of year but should explode in september. Thay downside allows me to buy cheap haha and make a great profit.
[Image: v4EP4in.png]
(Aug 16, 2014 07:21 PM)Portland Timbers Wrote:  Awesome! Yeah I invested into a few 80$ stocks and a few 20-30$ ones. Im thinking about selling a stock thats been down 1% and hasnt gained any traction and throw it into more shares of a company i own thats hit a downside due to the time of year but should explode in september. Thay downside allows me to buy cheap haha and make a great profit.

Definitely sounds like a plan mate
I wish you all the best with that! Be sure to keep me updated, and if you'd like advice or whatnot I'm open for that too.

Big post incoming soon guys
Finishing up
[Image: mMLFEBk.gif]
Great thread, very informational! This thread is, for sure, a keeper.
thanks for the information . Im just newbie about this stuff and I want to lean and I am really interested about this stuff.
Thank you very much for this thread! I appreciate you sharing the information! What is your opinion on retail stocks and the holiday season? Is this a safe bet or deceivingly more risky than it appears? Thanks


Possibly Related Threads...
Thread / Author Replies Views Last Post
by SuboptimalMar 6, 2016 01:32 PM 2 143 Mar 6, 2016 01:32 PM
Last Post: jont
by EnronitisSep 3, 2015 07:13 PM 16 1,016 Sep 3, 2015 07:13 PM
Last Post: Acid409
by EnronitisJan 19, 2015 06:16 PM 165 4,262 Jan 19, 2015 06:16 PM
Last Post: traderX