Ok I'm doing this on my phone so hopefully it works out.
2 lessons learned the hard way today.
#1: your starting balance is important!
I'm new to the game (this is my first non paper trade) and I have a little over $500 in my brokerage account. I didn't account for the commission when I bought 100 EXXI today at $0.785. Playing so small means that the 9.99 commission automatically put me in the red by about 12%. Selling even at break even would be %25 of my position!
#2: do not overestimate your research!
I didn't buy completely half cocked, it was up in the premarket, which I figured was a result of the news released early this morning. The timing matched the price action, and the news seemed somewhat positive. Clearly not!
I haven't settled my position yet for a few reasons:
1: I did NOT bet more than I am willing to lose. Given this is my first trade in didn't bet the farm, which is important, because even if this company goes bankrupt and I lose everything I put in, I'll be no worse than if I had a night out at the bar.
2: I am still at a risk:reward ratio of about 6:1, based on the 52 week chart.
3: because of those 2 reasons, I'm willing to hold this one until it comes back up, or until I hit my mental stop-loss, which is far lower than it usually would be.
Not the trade I wanted to make, but still a pretty cheap lesson, considering.
I can't upload my results yet for some reason but I will asap.
Hopefully someone can learn from my mistakes.
Apologies for any typos. This isn't the most mobile friendly site.
I understand Wolf's point. You don't want to get into a habit of scalping, so don't plan to, I was using that as an example. Starting out witha small account it's a relief to know you dont have to commit $20 round trip. Thats a big deal with a small account.. it's peanuts with a large one
I agree with @Pwnalot and @Wolf_of_Park_St . I use Robinhood and Etrade. I highly recommend having over 1K in Etrade. It makes the commissions less damaging and you can take better positions but Robinhood definitely forces you to choose the best trade setups and you can take small profits and losses easier. But still don't get in the habit of scalping as a strategy.
I actually signed up for Robinhood but the negative reviews kept me from transferring any money into it. I'm definitely reconsidering now. Don't plan on scalping for sure. I appreciate all the feedback!
Honestly I just use it for plays that I'm nervous about, but don't want to miss out. So I'll buy 4 shares or whatever. Something insignificant. More for my psyche. But that's just me.
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