Stock Market For Beginners πŸ“ˆ TRADING AND INVESTING 101

– So today I wanna talk to you guys about a couple of tips I
have for you if you’re just getting into the realm
of investing and stocks, and I know it sounds like
a wonderful thing to do. It sounds so easy. You just buy stocks and they go up and you make all kinds of money. It’s not true. I mean, it can be true,
but you need to have a basic understanding
of what you’re doing. These are things that I
wish I could go back in time and tell my former self
about the stock market. That way, I wouldn’t
have made these mistakes in the first place, so
here’s what happened. I kind of got into stock market trading just out of something I’ve
always been interested in. I’ve wanted to trade stocks since I was like eight years old. I can remember a trip to
New York City where I was, where I saw the stock
tickers for the first time and I was just fascinated by them. I was like this is something that I really wanna learn how to do. I just loved the idea
behind the stock market and then that day in New York City, I picked up a Wall Street Journal and I read it the whole way home on the bus ride that we
took to New York City. That’s where my interest in stocks started and now the problem was in
order to invest, you need to have money and I didn’t
have any money at the time, so it’s kind of something that
was on the back burner for me for a number of years, and then recently, when I’ve started working
and having money coming in and having extra money on the side, I decided to start investing
in some individual stocks. I’m the kind of person that
likes to learn by doing, trial by fire; I’ve always
been that kind of person. I don’t like to just have the
path carved out for me always. I kind of like to go through things myself and experience it firsthand,
but for those of you who maybe don’t wanna
waste a bunch of your money trading stocks and making bad trades and learning the hard way,
I have six tips for you that I wish I could go back
and tell myself because, I mean, I don’t regret
going through what I did with the stock market
because I learned a lot going through what I did, but for somebody who maybe
doesn’t have as thick of skin and as much ability to take loss as I do, I don’t know if that sounds right, but if you’re not looking to spend, ’cause I’m not gonna lie to you guys, I traded stocks for nine straight months. Never made a profit on nine
months, I made bad trades. Now I’m to the point
where I consistently make a few hundred bucks a week trading stocks, spending one to two hours a week doing it, so I’ve gotten past that learning curve and gotten to the point
where I’m making good trades and making a good amount of
money with very little time, and I just wanted to mention before I get into the video here, the six tips, for the last three months,
I’ve been working on a trading guide or strategy
guide for stock market trading based on all the information
that I’ve been studying over the last year or
two in the stock market. I’ve read dozens of books and guides and talked to many people
about trading stocks and I kind of collected
all of my favorite pieces of information into my
stock market trading guide, and I think it’s a great place to start if you’re somebody looking
to get into investing and you wanna know what kind
of signals am I looking for, how do I pick a stock, what stock should be on my watch list? I feel like it is a
great foundation for you as far as stock trading
goes, so if that’s something you might be interested
in, I will link it up in the description and
there also should be some kind of icon on
the video in the corner. You can click on that,
and that will direct you to the page that tells you more about that if you’re interested,
but without further ado, I’m not even sure if that’s
the phrasing for that, but we’re going to get into my six tips for stock market trading. Alright, my first tip for
investing stocks as a beginner is get over your emotional
attachment to money. I’m gonna say this again because it’s really, really important. Get over your emotional
attachment to money. As you’ve grown up, you’ve become very emotionally attached to money. You love money, you wanna make more money and you wanna hold it close to you and you wanna protect it
and you wanna, you know, minimize the risks and
you wanna be very safe. You have emotional swings with your money. If you lose money, if
you spend too much money, it’s all driven by
emotion, and that’s really gonna screw you up when it
comes to trading stocks. Where I learned this, the book is Rich Dad Poor Dad by Robert Kiyosaki. He sold 40 million copies of that book. I’d be very surprised if
this is the first time you’ve ever heard anybody
mention that book, but if it is, I think I paid about seven
dollars for it on Amazon and it was life changing,
to say the least. I learned so much good
stuff from that book but this is like one of the
number one things I learned from that book as it pertains
to stock market trading. Money is not real. You gotta realize it’s something that we collectively give value to. It’s something that we
make up to represent the value of something. We don’t wanna be carrying
around bags of corn and blocks of gold and precious
metal anymore, so we decided to have a universal value
associated with items. Start thinking of money as that. Don’t think of it as this emotional thing that you cherish and you love. It can’t be that, or else
you will be so afraid to lose money that you’ll lose money once, or you’ll get your emotions
involved when trading and that’s not the
place for your emotions. Trust me, your emotions
are a very valuable tool in other areas of your
life, but when it comes to the stock market,
leave them at the door. They have no business in
your trading strategy. You want to be trading
based on technical data, the numbers in front of you, the charts in front of
you, and nothing else. You don’t wanna be trading
based on how you feel that day. Maybe you got a bad night’s sleep. You should not bring that
into your trading strategy. That needs to stay in
other areas of your life. Keep your emotions separate
from your stock market trading. You can’t be emotionally
attached to your money because the truth is with
stock market trading, you’re going to win some and
you’re going to lose some. The idea is your wins
will outweigh your losses. You’re gonna be winning more trades than you are losing trades, and that’s how you’re
making profit over time. There’s no way you can always be right, but if you’re trading based
on data and nothing else, you’re going to have the
best chances of being right because you’re not gonna wake up one day and see that your stock
fell and all of a sudden, you go, oh my God, I lost
$1,000, I’d better sell. You only lose that money if you sell. You only lose if you sell,
it could go back up, alright? And if you have data in front
of you that may show you that, oh, it may go back up, oh,
there’s a good reason for this, oh, it’s just market
or industry correction. You need to start trading based on data and not your emotions. Okay, my second tip for somebody as a beginning stock market trader is invest in something you
actually care about, and I feel like this
should be a no-brainer, but it’s not because I
made this mistake too. This is kind of what my
stock market strategy looked like when I first started trading. I’d wake up and I would
open up Google News and I’d scroll there, be like, oh, somebody said that this
stock is going crazy. It’s blowing up, it’s
got so much potential. Let me buy it. I bought stock in a jewelry company. I bought stock in biomedical companies. I bought stock in oil. I mean, I don’t have
an emotional attachment to any of those things. I know I just said don’t
have an emotional attachment to your money, but it is okay to have an emotional attachment to the stock you’re representing. You want to buy stock in
something you actually care about. If you really like video games,
find a video game company or anything involving video games, something that has to do with something you actually care about. For me, I’ll give you my example. I live around Malta, and right in Malta, there’s a big chip fabrication plant and they make chips for AMD
and I bought stock in AMD simply because I’ve seen what AMD, they’re the main chip that that
company is making chips for over there in Malta, but
I’ve seen what that has done to our local economy and
I’m so thankful for them for coming here, and so for me, I have an emotional attachment to that stock ’cause I’m like, you
know, I’m really happy. I’m proud to represent
that company with my money, and as a result, when you buy something that you’re proud of,
when you buy something you’re actually interested in, when you’re buying
something you care about, you’ll be less likely to
sell based on fear and panic. Now, I’ve told this story a lot because it’s a very true story. I mean it’s not something that’s … It’s just a really good example of this. I bought shares of AMD and I
bought them at a terrible time, but I had no idea, but I bought shares and the very next day, the company unloaded a bunch of shares. They offered them to the public
at a much lower valuation than the stock was currently
valued on at the stock market. What they were doing was
they were selling stocks in order to pay off high interest debt, so in the long run, it was a great move. In the short term, it decimated the stock. I mean, I saw the stock go from seven. I bought the stock, I
believe $7.44 a share. It hit just under six dollars
a share within two days. So as far as my trade goes, within two days, I was
down over $1,000, okay? If I didn’t care about that company, I would have sold, I guarantee
you, I would have sold. I would have said “you know
what, this was a stupid idea. “Why did I buy this? “I better sell before I lose more money.” But because I cared about the company, I was like, you know what, I
don’t think this is the end. I don’t think this is it. I’m gonna hold and see what happens, and I ended up making
over $1,000 on that stock, not even two months afterwards. So because I cared about that company and I was proud to represent
them with my money, I ended up not selling at the bottom, I was able to, you know, weather the storm and I wasn’t worrying
about fear and panic. I had confidence in that company, and as a result, I held onto it and I sold it and I made a good
profit not long afterwards. So that’s something you
guys really need to do when you’re looking at
stocks, pick a stock, a company that you actually care about or an industry that you
actually have interest in. All right, I’m sure with this third tip, some of you out there are
looking at me like I know, but a lot of people don’t know this, and I had the same problem with this tip. The third tip, buy low, sell high. I’m gonna say it again,
buy low, sell high. One more time, buy low, sell high. I’m sure every person
you’ve ever talked to about trading stocks has told
you this piece of information, but nobody follows this rule, and I’m going to explain to you why. You need to be going against
the grain with your trading. You don’t want to be buying a stock when everybody else is piling into it. That is called the herd mentality. In my ebook, I talk about
how there’s three types of people who trade out there. There’s people who make
bearish investments, those are people who are
betting on the stock to go down, and they make money from
falling stock prices. There’s bullish investors
who are betting on the stock to go up, and they make money
from rising stock prices. For the most part, that’s
where the majority of people are trading, and then there are the sheep, and the sheep follow the herd,
being led by other people because they don’t have the confidence to make decisions themselves and they get slaughtered by the market. The stock market is
unforgiving, it’s true. It really is, it can make
you or it can break you, there is no forgiveness when
it comes to trading stocks. So if you go online and you do what I did
where I was going online and watching what stock
was way the hell up, it was flying, the sky’s
the limit with this stock. You got people on the news
just talking about this stock left and right, everyone’s piling into it, I was like, I can’t lose, I better get into this
stock while it’s up. You want, your mind tells you
you want to get into a good thing, and we see a stock in
decline almost as a sick stock, and you can’t look at it that way. You want to buy low. You want to buy that stock
when everybody else is selling. You want to be seeing
people on the news saying “get rid of this stock.” I mean, within reason, if you see other reasons
to buy that stock. It’s not like you just
want to go out there and buy a loser stock, you
want to do your research and understand why this
stock is going down in value, but you don’t want to buy
stocks that are sky high. They’re gonna come down. It’s all hype. You don’t want to buy
stocks based on hype. You’re going to end up losing
a lot of money that way. I can’t tell you how many stocks I bought based on what I saw on the news. I know one of them, like I said,
I bought a jewelry company, I bought Signet Jewelers
and for some reason, I read an article on seeking
alpha or one of those trading sites that was
like, this stock has unlimited potential, we
can see this stock trading 10% above where it’s trading
in the next two months, and I was like, of course it
will, it’s so high right now. You know, my head was in
the clouds with the stock, and unfortunately, reality
set in and the stock went down and I lost money and I sold down. I bought high and I sold low, and everybody seems to understand this if you ask them how to trade stocks. They will say, if you tell
them “buy low, sell high,” they’ll say “yeah, but give
me a real piece of advice,” and they don’t follow this key rule. This is like the cardinal rule of trading, and I know every time I
talk to people about stocks, and I give them this piece of advice, they think I’m being an
asshole, but I’m not. People don’t understand this. This is the cardinal rule of trading. They think I’m mocking them,
like oh, here’s the tip, guys, buy low, sell high, but it is
the cardinal rule of trading and you may think you understand it, but I didn’t understand it, even after reading book after book, I didn’t get it until I really
realized what I was doing. You do it without realizing it, you buy a hot stock in the news. You don’t want to do that,
it’s as simple as that. Okay, tip number four, quick and easy one. This is something, again,
if you haven’t guessed, these are all mistakes
that I’ve made in the past, and I’m sharing these with you. So this is something I did
over and over in the past. When I first started trading, I put like $500 in my trading account, and I was like “well I don’t
want to spend it all in one “place, so why don’t I buy a
couple of different stocks?” Diversification is not a bad idea, but when you invest so little, you have to overcome your commission before you can even make a profit, and in most cases, you’re never going to, and let me explain to you why that is. If you don’t realize this,
just because this is a beginner’s video, I want to explain this. When you go on any
website, Etrade, Scottrade, when you’re going through
an online stock broker or any stock broker,
they’re going to charge a commission for trading your stock. The prices vary based
on websites or based on if you’re using a live
broker, whatever you’re using, a human broker, but for me online, I trade with Scottrade, and
it’s like seven dollars a trade. Some of the sites are a little bit more, but Scottrade seems to be
the best bang for your buck as far as what I’ve found, and
just throwing this out there, I’m not paid by Scottrade, I
wish I was, however I’m not, but I just like to tell
people exactly how I do things because I like to be transparent. Even if I’m not getting paid for it, I want to be honest with you. So when I was trading with Scottrade, I bought a number of stocks
in companies, you know, or I bought a number of company stocks, spending about $100 on each trade, so here’s the problem with that. Let’s say you spend $100 in
stock of the ABC Company, which, it doesn’t exist,
I just made that up, but you’re gonna pay
seven dollars on Scottrade to buy that stock, all right? Then you’re gonna pay seven
dollars to sell that stock, so yes, you pay commission
every time you trade. A round trip is opening
and closing a position, so every round trip, you’re
gonna pay $14 in commission, so that means that 14%
is how much your stock would need to increase just to
offset your commission costs. Let me say that one more time. 14% before you even make a profit. Let’s not talk about slippage, though, or no, let’s talk about slippage
because what is slippage? Slippage is the difference
between the buy and the ask price for that stock. So just because the stock is
trading at a certain value, doesn’t mean that you’re going to get that exact price for it. Now when you trade a higher volume stock, there’s less slippage because
there’s more trading going on, but you could possibly,
if you’re trading a lower volume stock, have a
good amount of slippage, which means that maybe
the stock is trading at $20.10 a share, but you only
get $19.99 a share for it because that’s what the
current buy and ask prices are for the stock, so you
won’t necessarily get the quote of the stock at
the time because of slippage. So your stock needs to
increase 14% in value plus whatever slippage is involved before you even break even. So let’s say you were trying
to make $20 on this stock. You invested $100, you’re
hoping to get $120. That means that the stock
would have to increase 14% to 114 before you even made any money, and then account for your slippage. You’re talking about
having that stock raise 30 or 40%, somewhere around there, before you even make any money on that. You know, that’s the point
when you’re making your $20, but even if the stock
increased 15%, which, ask anyone, that’s a great stock. That’s a great investment if you have a 15% return on investment. You haven’t made a penny. You haven’t even made back your money yet when it’s increased 14%, and if it increased 14% and you sold, because of slippage, you would
probably still break even or end up slightly in
the hole on that stock. That is why I suggest you do not invest any less than $1,000 on any given trade. If you don’t have the
money to invest $1,000, save your money and
spend your time right now researching and learning more. I promise you guys, I know you’re eager to get into the stock market, but it will not hesitate to
kick you right in the gut and send you back to your chair, okay? It will teach you a lesson whether or not you want that lesson, I’m gonna be honest with you guys. Okay, so my fifth tip for a
beginning stock market trader is do not buy the news. This is something I did
many times over and over, and it’s something a lot of people do. You go on NBC or any news
channel and you watch the money and the financing reports and the shows that are
all about the stock market and they talk about what
the newest hot stock is, and I know earlier in this video, we talked about the herd mentality, and when you run with the herd,
you’re trading like a sheep. What that means is you
don’t have the confidence to make your own investment decisions, so you’d rather have somebody
else tell you what to do, and when somebody else is
telling you what to do, it makes you feel like,
okay, if I lose money, I can blame them. You need to hold yourself
accountable for your trades, and one way of doing this
is don’t trade the news. There’s a lot of people
out there trading the news. A lot of people watch the news and a lot of people trade the news. What you want to do instead is you want to buy the rumor, sell the news. So let’s say for example
there’s articles out there saying okay, this company may
be releasing a new product on this date, that’s a rumor, okay? It’s possible that it’s just
a rumor and it’s not true, but on the chance that it’s true, you may want to make a
small investment in that. Then you find out, okay,
it wasn’t just a rumor, it was true and then they
release this new product, the stock goes flying sky high. That’s the point when
that stock becomes news. That’s the point when all of the sheep are dog piling into that stock
and it’s going way high, but you bought before people
knew what was going on. You bought before it was mainstream, and as such, you paid a
lower price for that stock, and now you’re able to
make a comfortable profit. Sell while it’s safe before that hype ends and the stock falls over, because it’s my second point here, guys. Hype is not a safe investment. I don’t like to trade hype. Okay, so my final stock market
trading tip for beginners is this. Checks stocks a few times a day. I actually forgot what it was, so I had to turn around and look at that, so if you’re wondering what that was, I completely forgot what my tip was, but now that I jogged my memory, let me elaborate on that for you guys. You don’t want to check your stocks every minute of the day. I know it’s exciting, it really is, that’s the reason I trade. It’s an adrenaline rush
when all of a sudden you buy a stock and it’s going sky high, and all of a sudden you’re like “I actually made money
trading a stock, oh my god.” But you don’t want to
just sell immediately because there’s potential for more, and you don’t want to be
watching the stock so carefully that you get shaken out
of the position too early. I’ve done this many times, where all of a sudden I’ll check my stock, like you know the stock
market opens at 9:30. I remember on one occasion it
was like 10:15 in the morning, I log on and I’m like,
holy crap, my stock is up! And I think I had about a
$140 profit at that time, and I kept hitting refresh
like every 15 seconds, and like oh it’s up, oh crap I lost money, on look, we’re up two cents now, oh no, we’re down three cents, oh we’re back up four cents. You can’t watch a stock that carefully because it’s going to be changing
so minutely at that point that you need to look
at what the trend is, maybe the 15 minute trend, the 30 minute trend of that stock. So what I do for myself now, because I made this a rule for myself after I made this
mistake of getting shaken out of a position too early, and on that mistake, I mean, yes, I did make money on that stock. This was one of my early AMD trades, okay. I had like $180 profit, okay. I logged on and I saw, watching the chart, minute to minute that the
stock fell like three minutes in a row and I’m like, oh
god, it must be doomed, it’s going down, this
is the most people are willing to pay for this
stock, I better unload. And then the next day, had
I sold I would have made $1,300, but instead I made $180 because I got shaken out of my position. So that’s the lesson for you guys. Pick a time increment, no
less than every 15 minutes, in my opinion, so if
you’re getting excited about your stock, let’s say
it’s 10 o’clock in the morning, you check the opening numbers on the stock and you see it’s up, say
“okay, I’m gonna close this. “At 10:15 I’ll check again,
10:30 I’ll check again, “10:45, 11 o’clock I’ll check again.” Do not leave stock
charts continuously open on your phone or your computer. You will get shaken out of a position, and it may not be a bad
thing, because look, you made some money, okay? Yes, that was a successful
trade for me on AMD, I made like 180 bucks, but had I not gotten
shaken out of my position, I may have made $1,000
on that early trade, and I’ve traded AMD a number of times, and I have done well with that stock, but I could have done a lot better had I not gotten shaken out of it because I was checking the stock too much. Like I said guys, it’s exciting, it should be exciting
because once you are able to take this knowledge
you have and apply it in the real world and be able
to pull money out of thin air, it’s amazing, it’s a great feeling. It’s a rush and that’s
why I trade all the time, but you need to keep
your emotions in check and make sure that you’re
not playing it too safe because for me, I left a
lot of money on the table because I was watching
my charts too closely. Okay guys, that’s pretty
much all I got for you. These are my six tips for
beginning stock market trader, and these are things that, again, I wish I knew when I started, but I was able to learn
them in the long run and I went from trading
nine months in a row without a profit to making a
couple hundred bucks a week by trading one to two hours a week. It’s not hard, guys, and if you watched this video all the way, I just wanted to thank you
for spending the time you did with me and I really hope I was able to shed some light on this
topic for you guys, and if this information is
something that interests you, I really think that my ebook
might help you out as well because it kind of expands
upon a lot of this stuff, and I outline my exact trading strategy of how I am consistently
making a couple hundred bucks a week with very little
effort trading stocks, but I thank you guys for watching, and I hope to see you in the next video.

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