One of the last things I posted was about how I was getting into stock trading. Since then, a few things have happened. For one, I lost money. That happens. You really can’t expect to get into stock trading and not lose any money, especially in the beginning. I’ve had some killer trades over the past year and a half, but I’ve also had quite a few losses as I made my way to the point I’m at now.
Fortunately, I’ve made a lot of improvement thanks to Joe Grates, the man who worked hard to train a lot of people like me to perform technical analysis on stocks and successfully trade both stocks and options. Sadly, he passed away a couple of months ago but he put so many people on a path to better themselves that his memory will live on forever. His goal was to get all of us to retire early and make stock trading our primary method of income and I plan to do that.
He put in a lot of work with us to try and get us to the point where we can consistently make money. It took a lot of tripping and falling along the way, but many of us have been able to bring up our win percentage significantly. His mantra of “Pick one stock and learn it” is excellent and why I’ve become far more consistent with Microsoft trading than any other stock I have ever traded. I can’t tell you why I Microsoft stuck with me as well as it has, but for some reason, that one is my go-to. For others, SPY or a handful of bank stocks are their moneymakers. But thanks to this guy, we learned an invaluable skill that we are able to use.
Thanks, Joe, you were a great guy who helped to improve the lives of a lot of people.
I primarily stick to Options trading since it can be a lot more lucrative when you get it right. I don’t do anything exciting like Iron Condors or Flaming Phoniexs (which isn’t a thing but sounds like it should be). I just do normal calls and puts, sometimes throwing in a straddle every now and then when I’m unsure. Typically though, on those days I just wait to see what is happening.
As previously mentioned, my go-to is Microsoft. I’ve done so much backtesting on Microsoft that my screen looks ridiculous. I have Support and Resistance points all over the place. At some point, I’ll probably clean this mess up but I’ve found that the stock continues to track some of them, in particular, a diagonal line I drew by mistake several months ago. Either I got lucky with that one, or I am in fact, the greatest stock genius of all time.
I’ve also been in and out of Workhorse. I missed the big climb it had a few weeks ago, though I did manage to ride it up partially before getting off early. Workhorse has an unstable history and being a penny stock, it can be manipulated a lot more easily than something priced much higher. But I don’t day trade it, I swing trade it. With options, I typically day trade them. When I swing them, I give myself enough room just in case something negative happens but intend to get rid of them earlier.
Ford and GM, however, are some I bought cheap that I am swinging a very long distance on. Those I bought as a “just in case” kind of thing. If they turn to dust, fine, no big deal. If they go up, great, but it will take some big news to make that happen.
I’ve also stopped using Robinhood, almost entirely. I switched to a platform called Tastyworks, which at first glance looks like a complicated mess that was thrown into a blender. The main difference most people notice between the two platforms is that Robinhood does not charge a fee, while Tastyworks does. However, the fee with Tastyworks is quite minimal. You are charged $1 per options contract, but only up to 10 contracts. So in other words, if you buy 15 contracts, you still only pay $10. Check here for more information on their pricing.
I only trade options on Tastyworks, so I can’t say anything about trading actual stocks. I do that on Robinhood, but I prefer Tastyworks due to the speed of the software and execution. Everything operates much more smoothly and I tend to get in and out of trades much faster. Robinhood can be slower and if you’re using the web interface, you may occasionally get blasted with a login prompt when you try to buy or sell something, even if you are already logged in. This can be rather annoying and make you miss an entry or exit point. This doesn’t happen on mobile devices, but I’m glued to a computer all day so I tend to use the web interfaces instead.
I use ThinkOrSwim, mostly for the charting and OnDemand functions, though I would probably use it for regular trading if I had the same price rate as Tastyworks. Flipping that around, if Tastyworks had a system that didn’t look like a cluster of crazy, I may use it more for charting than ThinkOrSwim. However, with the Tastyworks platform design, I believe that it’s more so just something I have to get used to.
Teaching my kids
I have an 11-year-old daughter and a 5-year-old son. I’ve told them both about how I buy and sell stocks in the easiest-to-understand-way I could think of. I told them that I buy something, hold it for a while and sell it when it is worth more money. Essentially, it’s like buying a baseball card that you expect to increase in worth. When I pick up my daughter from school asks me on an almost daily basis how I did in my stocks. I’ve even shown her my ThinkorSwim set up to show her what I look for, though I’m sure that didn’t really stick. Still, she is interested enough to ask me about it quite often and I hope to one day be able to teach her how to do this so she can use it herself.
Oddly enough, my son seems to be more interested in the actual trading than my daughter does. He’ll sit and watch me practice trade using ThinkOrSwim’s OnDemand function. It’s like a game to him. For my daughter, it’s more about wanting to know how well I’m doing with it. I tell her when I win and lose, and have explained that it is a lot different than gambling or even buying a lottery ticket. With trading, you can at least see what is going on and have a better chance at winning, so long as you aren’t just blindly buying something without knowing what you’re doing. News can screw you up, but if you can learn patterns, plot points of support and resistance, and understand technical indicators, you’re in a much better position. If you treat it like a slot machine, you’re going to lose.
OK, enough trade talk. I’m not trading today, though I should have bought Puts on Microsoft when it was up just before noon today. I didn’t because I was working on this theme. It then dropped more than $1 over the past couple few hours. From green to red and just below a strong resistance point. Tomorrow should be interesting, though in the coming weeks my random diagonal line should cross this resistance point, so I’ll see if Microsoft either explodes through the top or crashes through the bottom. If I had to guess — and it would only be a guess at this point — I’d say it blows through the top, but unfortunately, no one knows for sure.