New to stocks, not sure how to invest.

Click the Wiki link at the top of the page, that should guide you through everything.

 

$200 is not enough money to get started, but its a great time to simply learn and absorb everything while you save up more money.

 

My opinion is that you cannot trade with such limited funds. One trade could wipe you out in a few minutes. Maybe others can comment with ideas.

Ha! Beat your post by 1min Bob!

 

In cases like this, its best that the individual keep saving money while paper trading/investing and learning the ropes.

 

Its also important to differentiate between investing and trading.

 

They are very different, and investing would be a lot safer than trading for somebody new coming into the market.

You are falling for the most common trap, the ole "I dont have much money so Ill just buy penny stocks" trap.

 

Penny stocks are almost the most risky thing you could possibly trade on the stock market.

 

There is no "best penny stock", 90% of the scams which run because they are being promoted, regardless of what sector they are from.

 

You have everything going against you at the moment:

 

1) New to the markets, no experience

2) Only have $200

3) Wants to trade the riskiest of stocks

 

That combination above is basically a guarantee that your $200 will vanish in no time.

 

My advice is take that $200 and buy a book about investing.

 

 

 

Ayrun,

   Probably won't revisit this page to see your reply- sorry. Where are you going with this? Are you prepared to do any work at all? No offense but if your saying your just going to follow advice from family thats fine then do nothing except buy and sell when they say. You can't be half pregnant so either you make a significant effort or make none at all.

 

Try to accept the fact that most lose money - think its 95% of folk. Its a hard thing to do and and some people are very proud and will not admit to losing... eg everyone I know thats gone to vegas came back a winner hmmmm I smell male cow poo...... whats that called again.. oh yeah bull&h*t.

 

Loads to read here, no one will ever turn there back one you as long as you made a good effort to answer your question yourself and above all else your polite just trawl through the threads.

 

I politely suggest reading William J O'Neil .. right up your street and if your not planning to make a massive effort it will give you the bare bones to trade with.

Cramers back to even is quite good... at present I am reading about larry Livingstone and loving it...

 

Stay away from the pennies... mugs game that. Also you picked a nice time to trade didn't you? - NOT ! markets thin right now (Immediatley now not going beyond a few days don't judge me please)

 

Paper trading may work for you- didn't for me as make different choices when its not real.

 

2 tips for you..

 

1) never follow me if in the rare event I post trade- your going to lose.

2) never trade for something.. ie I want money for my next scuba adventure (just been chasing giant manta of the burmese coast for a month) all I can think of is my next trip and the thirst for profit to finance it.....  I will restrain myself... i will restrain myself....

 

good luck and listen to Stock Jock..... watch the videos.. (Not the Stock jock dwarf porn ones the ones on trading !!!)  Good luck !

 

 

 

 

 

 

 

If I were you I'd take that $200 and invest in this $30 stock called, Apple. Lol, just kidding, that advice is 20 years too late. If I were you, I wouldn't trade that money at all, especially with penny stocks. I will advise you to open up a stock simulation game, Investopedia has one, and you can paper trade with just $200 of the $100,000 you start out with. If you have made any profits by the end of the week and would post them here, then I'd say trade away.

 

Everyone saying the same thing which is basically don't trade.

I'm gonna say you can't trade because you're using $200. Sure you might "know" someone that made it big with $100, but ask him how long he traded before that and how many different times he had to start with $100 to make it that big.

$200 in the stock market is gambling. The only way to profit is by going into pennies or options (imo options are better but potentially even more risky. i consider myself a consistent options trader and I only win 40% of my trades). You need 100%, 200%, even 1000% returns in order to actually make more money than you would in a day by just working at your local fast food joint. Not to mention how consistent you'd need to be.

 

That being said, I'm not denying the possibility of making it big with $200. It's possible (see: http://www.hotstockmarket.com/t/83101/cherrycokes-all-or-nothing-binary-options-odyssey) -- That being said binary options are all or nothing so you have a 50% chance of immediately losing everything.

But again, the people that have done it have been trading for yearrsssssss and they don't ask questions because they're the ones answering the questions. Honestly, you shouldn't try to turn a profit with $200 until you're the one answering the questions (not that you ever should but if you one day make it big, it's a fun challenge that could pay off. Not asking them.

 

To put it into perspective. The best fund for the 2011 year had a 30%~ return if I remember correctly. How do you expect to make money if 30% of $200 is only $60? Yearly? 

 

Again, you have probably heard/seen that it is possible to make it big with $200 but please remember that the people that do it are 1) experienced 2) are trading money that they can lose 3) are pissing liquid gold and have a garden of 4 leaf clovers in their back yard

 

All the same, since it's up to you, I wish the best of luck to you if you do decide to trade pennies or go with another route.

 

We all started somewhere and some of us are here posting and trading today. The rest blew up their account one two many times and have realized that stocks and vegas: well, they aren't so different after all....

 

P.S. I've actually tried using $200 accounts 3 different times to make money with (I was willing to lose this money each time because of profits from my real trading accounts) Well what happened was I lost all my money the first two times, the first time I got up to $400 but then lost the next few trades. Only got my third one to $300 after spending two weeks to realize how impossible and unlikely it would be to continue trying. I was trading options though, not pennies. 

If you're bound and determine to invest that money, put it in a mid to low risk no load ETF (no commission) and let it sit. 20 years from now you might have something, and you can add to it over time.

 

If you're bound and determine to put it in pennies, it will be akin to going to the gas station and buying 200 $1 lotto cards. You'll probably leave with next to nothing. I started out not long ago with $1750, trading options with a few pennies here and there. Took mild losses on my pennies by managing risk, took huge losses on some of my options. I had myself up to $2400 at one point, now I have $200. I can barely work with this amount, because any potential trade and commissions will be 50% of any profit I could hope to make. Its like being the drunk regular at the casino - if I do make a trade I'm going to have to go all in on a gamble and pray.

 

Its not what you want, but $200 just ain't enough, commissions will wipe you out alone. That, and most brokers won't take less than $1000 minimum for good reason.

Okay, well you make a good point. We might as well disregard the $200 and help you learn about trading anyways. All these posts saying "don't trade" don't help you learn more than what you already knew. 

 

Personally, I'm a swing trader with a day trader's mindset. I prefer to hold for more than a day, but I'll exit ten minute later if I already have a nice profit. As such, I find trades with technicals (technicals hard to explain and there's no perfect way to use them so unfortunately you will have to read up about them. basically they are just indicators as to where a stock might stop going up or a stock might stop going down. It only works for big stocks and it will not work with pennies). I also try to think ahead of the game, kind of like chess.

 

For example, today I went long AMZN because it is the end of the money and this is the time that funds will be sending out reports to their investors. A fund can buy a boatload of stock that has been going up in value and send to their investors that they had "xx%" of this stock in their fund for the month of April. I had a hunch that AMZN would be bought up by funds today, thus increasing it's price, and happened to be right. I bought the weekly 230c option for $3 ($300 in money) and sold it for $5 ($500 in money) making a profit of $200 with my $300 investment (I actually had 4 contracts so it was $800 in profit but I scaled it down to be more relevant to your situation). This would be a trade where I had a feeling that something would happen and I went entirely with my guy, I don't suggest it as it is similar to gambling, but it does pay off occasionally. In order to trade like this, you have to understand options and understand how the market works. Unfortunately it took about a year for me to be able to develop this sense of understanding.

 

Now trading with technicals is something that might get you somewhere farther because they can be more reliable in a larger time frame. Today I made another trade shorting PCLN, which is basically betting that PCLN goes down with option puts. I decided to do this because PCLN failed to make an all time high in the morning so I knew that there was heavy resistance (a lot of people wanted to sell at that price) and that PCLN would not continue going up. Technical indicators will show you all kinds of things and will give you a general, but unreliable, idea of what a stock might do (something for you to read up on. never completely rely on technicals though. stock news and other factors such as people that want to sell a hundred thousand shares will have a major impact on a stock)

 

News and rumors: These are dangerous times to trade. Rumors are rumors until they are news and news can be either good or bad. Stay away from this if you don't have a complete understanding of what will happen to a stock if the news is good, mediocre, or catastrophic. But it is essential, at least to me, to understand the news and company information. I wouldn't be investing in a company that lost a billion $ last year, even if everyone says that it won't go any lower.

 

These are the two basic ways that I trade. I could get into a whole lot more detail but it all comes back to knowing what you're trading and believing in your trade. I often lose more than I should because I believe in my trades which as a result allows me to gain more as well because I will not exit a trade just because I am down $100 within 5 minutes of buying it. You have to learn to either hold through and let it play out so that your -$100 becomes +$200 or don't enter the trade at all. At the same time, know your limits. I trade options, something you could look into if you want, and I always sell before I lose 50% of my investment (options can do that, they're very risky). It's just a matter of having a plan, as our friend Bob always says.

 

I hope that this has helped. Feel free to ask more questions if you have them and once again, I wish you the best of luck. I respect your determination and I hope that this will help you succeed in this poor man's game 

Edit: Please remember that I am simply posting my trading style and that this may/will not work for you. Everyone has a different perspective on how to see things so I suggest paper trading until you find a strategy or style that works for you.

Try this video http://www.hotstockmarket.com/t/81513/learn-stock-market-investing-how-to-get-started-in-the-stock-market

Well as SJe has provided, it would be best for you to read up and check out videos that will be more helpful than a page full of text. 

 

The fund situation is a more advanced topic, but basically funds are big bankers/traders that trade with other people's money (investors) in order to make money. Funds control millions/billions of $$$$. You've probably heard of Warren Buffet, that rich guy living in the middle of no where. He owns and runs a fund to invest in. That's all you need to know about funds but my hunch was that funds would buy up AMZN because it beat earnings a few days ago and we were at the last day for a month which is when funds often buy/sell the most shares. 

 

Pennies and options are definitely not for starters. You want to start with more stable stocks to understand the flow of things and how stocks react to certain news. Options are a part of stocks, but you're basically betting that a stock reaches this price by a certain time period (read more about it and then stay away until you completely know what you're doing). Pennies are not stocks, they are influenced not as much by news but more by the people that trade them. A penny stock can have a 1000% gain in a few days, but they can also go to 0 in a few minutes. 

Please refer to the wiki: http://www.hotstockmarket.com/atype/3/Education

Videos: http://www.hotstockmarket.com/f/60/stockjock-e-039-s-educational-videos

And look through past threads for more information that has been previously mentioned: http://www.hotstockmarket.com/f/47/stock-market-education

 

Glad to be of a help~~

 

 

I trade almost entirely on technicals and patterns. I mainly look for channel trading stocks, LOW was a very good example of this but it seems to be losing its channel. I really don't care what the fundamentals are much, and only look at big news like upcoming earnings. I was a bit late to the game, but the performance that stocks like AAPL and PCLN had the first 3 months of the year are what I try to find. I look for stocks that are in a strong pattern so I can predict their move, and then I trade weekly spreads. I usually buy them on Monday, and then they expire by Friday. If all goes well it would usually double my money or better, however, most stocks suffered a pull back recently and I missed my week big time. My worst week cost me 50% of my account, and then I had another bad week there after. I like my strategy but you have to have money to lose to implement it, otherwise you're first 10 plays are pure gambles.

 

If you're looking for long term, fundamentals are more important, but you can also trade on technicals to know when stocks are discounted and when they're high priced.

 

To add to my mention of ETFs, I have my HSA money in VIG. Its a low risk (relative) no load ETF. If you want to get into something like that, I would watch for the market to have a really bad week, or several. That ETF is hitting its 52wk high right now, so it will probably pull back sooner than later.

There are many things to consider when trading, and trying to figure out how to pick a stock without a trading plan is like trying to target practice without a target.  That may not come across as helpful, as it doesn't clue you in on how to pick a stock, but it should illuminate the reason you're going to have difficulites getting a straight answer.