Rookie Investor

[mickpetruzzi]

I am seeking advise from you stock market professionals in hopes someone can point me in the right direction to begin investing.

Basically, I would like to see people's recommendations on what I could or should do to start off, like:

If I trade online, who should I go through?

How to go about selecting good stocks?

Etc.

I appreciate the help and I hope my question is not too vague to be answered. I will happily provide more info if need be.

Thanks.

Mick.

[wallstreet]

Mick,

Your question is not a bad one..the learning curve to investing may seem steep, but it really isnt.

I would trade online if you want to..it saves money and gives you all the control. I recommend Ameritrade or Etrade, someone with low comissions that you can trade before and after the market and that gives you tools to use.

Selecting good stocks is the hard part..it takes the longest time and for me is the best part of investing..finding that stock that makes you a killing..being responsible for the correct or incorrect call..that it is all you and nobody else to blame.

To research, just watch CNBC for a while, write down some symbols that you see..research the symbols for the company name and business. Go to yahoo finance and look at most active stocks, percentage movers and those that have news. Once you do those things you will find other stocks that you can research too.

It might sound like a bunch of work but it can pay off huge. Look at our savage, the guy has made more with his stock plays than any handicapper will and the risk is so much lower.

Let me know how I can help. I am more than happy to.

If you look at older messages here I go into detail about how much money you should start with, the stocks to trade and those not to and what to expect etc.

Ask away, your question is a good one!

[savage1]

Wallstreet-I have to amend the nice things you said about me slightly.
In spirit of fair reporting, you should have also said that savage has probably LOST more on cln(on paper anyways) that any handicapper has lost.
As Northcoast says, "We(I in this case) always tell you about the losers as well as the winners."

[BettorsChat]

mickpetruzzi,

Glad to see that you posted your questions to me in here as I was going to recommend that.

A few points that I recommend:

1. Paper trade stocks first. Meaning put down on paper what price you would have bought a stock then watch it and see how it does.

2. Use STOP Losses!! Meaning if you buy a stock for $20 put a stop loss that you're comfortable with. Let's say 5% meaning if you buy it for $20 and it goes down to $19 sell it with no questions asked. If you don't use stop losses you can lose your rear end.

3. Try not to short stocks as that is a hard game to follow.

You may want to take a look at some different types of software like Omnitrader etc. I've never used that myself, but have always been interested in it. However, I'm not sure if its worth the $ or not.

Side not anyone familiar with:

http://www.chartpattern.com/cf/index.cfm

[mickpetruzzi]

Thanks for the replies everyone.

I really like the idea of maybe doing the hypothetical concept to start with and learn exactly how I interpet the number and see if that works. This way, no money is involved right off and if I come across something good, then I can run with it.

It seems like a lot of work goes on behind the scenes and I look forward to doing it. I will also take all your considerations on how to research different stocks.

Question:

I know people invest in the market to invest in ones future or for retirement or what not. I was going to start doing this more along the lines of making a "second" income (yearly?). How would you guys recommend going about this? Does this involve greater work in that I will be buying/selling more frequently?

Your advise is greatly appreciated and please forgive me if my terminology is not correct or my questions seem like they don't make any sense.

Thanks again guys.

Mick.

[BettorsChat]

Mick,

For a 2nd income you will have the options of trading on a frequent basis for short gains daily, or short term trading meaning holding a stock anywhere from 2 days to 7 days, or putting money into bonds that pay a dividend income.

You're probably going to be looking at daytrading making a lot of frequent trades each day for small gains which add up. You just have to be careful when doing that and that's why I suggest the stop losses, because if you don't use them and a stock dips below a certain price you may be sitting there thinking well its going to come back up. And the end result could be that it does, but it could also continue to go south thus leading to a greater loss.

The best thing to do is start really slow and start off paper trading for at least 2 weeks. Also start of buying and selling a small amount of shares like 100 to 300 at each trade.

[mickpetruzzi]

Originally posted by wallstreet

.........

I didnt feel like answering that guy about trading for income..there is no way I would recommend trading for a living even a part living until you have experienced success and failure and are able to increase a portfolio over a period of time. I doubt even I could do it for income..too much stress. ........

Wallstreet:

I didn't want to hijack the other thread in this forum.........

What is your recommendation to me on how I should start trading then? Like I initially told Monte via e-mail, due to my current occupation with the federal government, I do not and will not illegally gamble anymore. I want to start a new hobby and I want to do it right and I figured that since I have the funds and the ability to, that I should invest in my future and my well-being.

I came here for advice. I am a novice to this game and am trying to learn from people with experience. I am looking for constructive feedback on my opinions and I need all the feedback I can get.

Originally posted by wallstreet

..........Sorry for the long paragraph there..I just cannot recommend to someone who has no experience about trading for money you have to rely on...no program or mentor can do this without at least a year of hard study..

This is the kind of information I need. If you experienced professionals don't give me feedback, then I how in the hell am I supposed to know until after I lose my ass and my money along the way? That's why in my current position they just don't send us out with a badge and a gun, because we would just get killed. I've spent 6-months in the classroom, on the range and in the weight room so I know what the hell I am doing when I am doing it.

Mick.

[wallstreet]

Mick,

That is no problem..after BC replied I just didnt know where to go with a response. I could spend hours with you discussing this subject and tell you why you shouldnt do it..lol. This comes from my own experience and from seeing others during the hyper market lose hundreds of thousands of dollars. I also quiver when I see commercials advertising some options seminar or futures trading or day trading..

I traded intra day with a firm in PA..as a legal trader, liscenced and all. I wasnt even one of the crazy traders but damn it was scary...and that is in the middle of the river so to speak.

The reason I didnt reply is how can I reply to someone who has no experience and wants to make an income? Man that is just tough for me to address. I could do what many would and point you to some book or seminar or the like but I cannot do that and I wont. I want anyone (well almost everyone) on this site who is interested to gain from my experience and losses to make their trading venture profitable and realistic.

Maybe we should start where I usually start..and if you are willing to put in the time, no short cuts and learn, then maybe you can make it. It took me probably 7 yrs learning and losing (my wife reminds me of that) before I finally understood what it takes..and given that I still get a knot in my stomach when I get in a position..lol

Ok...where I would start..

First..observation..start observing stocks either on CBNC or watching yahoo finance..learn symbols and names.. become familiar with those stocks that trade everyday.

Next, get an online broker, I would recommend Ameritrade for only the reason that you can trade before during and after market, they have a streamer application for free and they have low minnimums. After you setup an account start filling out your streamer list.. Then to expand your list, say you watch SIRI..which is Sirius Satellite..use yahoo finance to see who their competitors are..then you can expand your lists of stocks.

Next, start learning why stocks go up and why certain ones go up more than others..learn how to read a balance sheet, income statement, research reports, press releases.. Then you can see why a stock in a group should be purchased over another.. Learning the "guts" of a company is more important than anything else..well almost anything else..but learning the operations and how a company is perceived will gain you confidence in your choices.

Why I said almost most important, I find huge value in reading charts and understanding the technical aspect of a stock movement..because no matter how good or bad a company is, the market movement determines like 50% of a stock movement...and we can use that to our advantage in down times..

So..go to a site like stockcharts.com or coveredcalls.com and start researching stock charts..start looking at indicators like RSI, Stochastics, Momentum, moving averages..and then as you understand what they are and how they work, you can pull up a chart of a stock then you can pick out a good buy and sell point....very very very critical for trading, especially trading for an income and for short term trading.

You can read good books about investing and you can subscribe to sites that give advice..but having done that myself (I have bot books and still belong to www.siliconinvestor.com etc) what made me learn the most is from things BC mentioned..it isnt glamorous..it is boring..but trading on paper is a good way to see how much you have learned and how confident you are. It still is NOTHING like trading with real money but it gets you a good idea of how to trade.

Now let me give a disclaimer and this includes Savage..which he well knows since I have said it 20 times... there is no room for discussion if you want to make it trading..

DO NOT trade OTCBB stocks, Pink Sheets stocks, options and margin. It is hard..because you will see many try to convince you to buy them and they move quite a bit..but they are not for an investor starting out.

So given that..get started..ask questions to me and others here...research stocks, get an online account, start watching..start learning..

I will help you with whatever you need..no charge..lol

Sorry this is not a fluent response, it is random thoughts from my mind and this is likely 25% of what you need to know.

See why I didnt want to reply?? Get me started and I can be here all day..

[mickpetruzzi]

Thanks!

I appreciate the response. I hope I didn't come off as a jerk, I just really want to trade and want to learn how to do it the right ways.

I will start off with the advice given. Your response was pretty detailed and I really appreciate that. It will help me greatly to get started.

Question:

Since I am a beginner and my thoughts seem to be a little out of the ordinary or off the wall (lol), do you think I might be better investing long term? Reason being, whenever I ask anyone about stocks, they always revert back to "Microsoft" and "if you would've bought this so and so many years ago, you would have this amount of money." Is it best to look for something along the lines of this or should I look for stocks that see (big) gains in short periods of time?

This question may be a stupid one at this point, but let the learning curve start moving up hill.

Thanks again for the response. Anyone else have any advice?

Mick.

[wallstreet]

Mick,

My personal view is those kind of companies and gains over time are long gone.. the DELL's and MSFT's as winners year in and out are not around anymore..there will be some sort of new technology or sector that will be that way but it wont be the names we are used to. Energy is acting that way this year but I dont know about the next year.

For my choice I would trade in cycles..buy when everyone is selling and sell when everyone is buying.

I think you can make money short term just as easy as long actually...

[savage1]

Wallstreet-even though I have been in the market for many, many years, I loved your posts to mick;you should save them and post them whenever someone else asks the same question.
I would also caution to in general beware of tips and always do your own dd(due diligence) before buying anything no matter how much you trust your source.
I can think of so many so-called great stocks which I bought over the years on which I lost bigtime simply because I didn't research them enough.
Sometimes sound investment is simply like that offered by the great John Templeton.
He said in essence if you like a product and or a company and you see many people buying it(the product), then check it out;it might be a good time to buy the stock.
As my father said(he was in the market for around 65 years and did really well-he passed away at age 90 about 1 1/2 years ago) in so many words-good investing comes with patience and a lot of what to buy and sell and when to do it is intuitive;that makes sense-the longer you are in the market, the better sense you have of market timing.
Anyways, I wish mick and any others the best of luck, and I certainly would advise anyone to follow you(Wallstreet) for sound advice; you have been a big help to me.
I would add that even though I have had a nice hit on wlsf, it doesn't even come close to the amount of money I LOST years back when I used to buy call options and other very speculative stocks.
Even this year I am not bragging about cln and several other big speculative losers;stay with quality and you will do fine.
ps Great advice by BettorsChat also!