Disclaimer: I am not a financial adviser. I have no license or professional training. I am offering my personal experience with stock trading and investments.
Michael Furlonger’s Story
To share a little bit, I started stock trading years ago. For me, it wasn’t some sort of “get rich quick” scheme or anything, I just wanted to learn how it works. I had been reading about how YouTube monetizes videos, Google, bloggers, app designers and so on. If there was a way to make money, I wanted to know it.
Do you ever feel that way?
That’s what it’s sadly all about these days, right? You’ve seen the popup ads, “Learn How To Make $700 a Day While Living On The Beach. Click HERE.” Or is that just me that sees these ads?
For me, it wasn’t so much about having money, it was about how does it work.
To me, it’s like the game Minesweeper. Remember that old game that came on every Windows computer. I have a theory, that a lot of people have NO IDEA how it works. They just randomly push buttons and hope not to set off a mine. And I felt like that’s how a lot of people view the stock trading and the economy in general.
What I like about Minesweeper is that, when you learn the rules and certain “patterns”, it’s enjoyable. And I wanted to learn the “patterns” of stock trading.
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The Stock Market
When I told people that I was a stock trader (as inexperienced as I was), I was often met with disgust. This idea that I made $200 in the morning, as opposed to the hard working people who go out to make a living. Let me point out that the stock market, essentially, exists so that people can work. And at the time, I owned a lawn care business and after taking a semi-quick look at the market in the morning, I would go out and cut grass.
I love hard-working people. Without the stock market, those hard working people wouldn’t have jobs.
- Mcdonald’s restaurant (ticker symbol: MCD) wouldn’t likely have moved much from it’s founding in 1940, San Bernardina, California without the stock market.
- Apple (ticker symbol: AAPL) may not have left Steve Jobs and Steve Wozniak’s garage if not for the stock market.
- Ford Motors (ticker symbol: F) was founded in 1903 by Henry Ford.
The stock market is an opportunity for you to “own” a portion of a business. It’s about putting your money to work for you.
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Penny Stocks
Of course, there are many different forms of investment opportunities. The more money that you have, the more investment opportunities you have. But for me and my account size, the penny stocks is the place to be.
I’ve heard it said that a lot of these big companies aim for 10-12% earnings within a year’s time. But with penny stocks, although they are volatile, they can have huge movers. So while a company is looking for that yearly 10%, I’m looking at a daily or weekly 10-20%.
And this is good. I took my small $1000 and was able to enter the big world of stock trading.
Bull and Bear Markets
Of course, we all know that you can make money when stocks go up (bull market). But, did you know that you can also make money when stocks go down (bear market)? I didn’t know that. But I do now. And this helps the markets stay moving.
Allow me to explain:
When you are making money when a stock goes down, it’s called Short Selling. You are putting shares of a company into the market (example at $1.25/share) and as the market drops, you buy back those shares at the new value ($0.95/share). This earns you $0.30 per share.
The problem with short selling is that it only works when your broker has shares to short.
What Interests Me
There are many styles of trading in the market (even penny stocks), but as for me, I was interested in patterns. As I mentioned, it’s like Minesweeper. I was shown how stocks “operated” through patterns. My favourite was called a Head & Shoulders pattern or Reverse Heard & Shoulders pattern.
The photo provided illustrates a typical Head & Shoulders pattern (Bear Market/ downward trend). You can see in the photo that there are three spikes: The two shoulders and the head as it were. The blue line, which is labeled as the “Neck Line” is called the “Support Line”. As you can see, when the stock would dip, it would bounce from that line.
The difficult part is predicting a “Support Line”. It’s easy to recognize afterwards, but with practice it is possible to recognize “Support Lines”.
Are You Interested?
When I shared on social media about my previous winnings, I was contacted asking to share more as a financial blogger. While I don’t feel equipped to come off as some form of an expert. I thought about sharing some of my own experiences, knowledge and advice.
My FIRST and GREATEST piece of advice is this: If you want to learn, do it. If you have spare money and you want to try it out, go for it. Sadly, 90% of stock traders lose money because they are ill prepared. Consider setting up a paper trading account which is an account keeping track as if you were trading, but it’s not with money (so it’s free).
Below are the people that we have learned from:
- Timothy Sykes– Tim Sykes got me started with a lot of the learning and how it all works with his videos and weekly stock picks.
- Paul (Superman)– I followed Paul’s stock picks as he was more focused on the uptrend of the stocks, as opposed to Tim who, at the time, was a Short Trader.
- Analyze Your Trades– This third option may interest you if you are interested in the simple learning of the market.
Questions?
One of the social media questions was, “How can I know what a company supports? (Abortion, pro-Israel, etc)”
While I hope to get deeper into certain topics of stock trading, including SEC filings, the simple answer is research.
Let’s say, for example, you are looking at Daily Top Gainers (the biggest stock gains of the day). You see a company ticker called XYZ, for example. Look up what the company is, look up news articles (rarely will stocks move without news), and most, if not all, companies, have a website.
So to answer this person’s question is to do your research.
Notes
I traded stocks with a small account because I wanted to learn a skill. As mentioned, I traded stocks with a small account of $1000 while still working. I encourage this same approach.
People choose to enter the stock market for different reasons. I’ve heard of people who have traded “casually” while in college. Many of Tim’s Sykes student started out with small 4 figure accounts.
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The links above are affiliate links of which I earn a commission. However, I have experience with both Tim Sykes and Superman’s programs. My wife is currently a student of Tim Sykes’ challenge.