Investment

Getting into Stock Trading

Christian Perez | 12.04.2017

In the excitement of bitcoin, I’ve decided to finally get into stocks. Always wanting to get into stocks, I kept getting intimidated by it all. I saw it all too difficult to get started. Professional financial advisors, like WalletFriends, will tell you to pay off all of your debt before investing anything. They suggest that not owing anyone is crucial to optimizing the total amount of money that you can invest. I’m going to skip that advice for now because I’m too impatient, but I wanted to share that with you in case you wanted to do it the “right way.”

So, how do I get into trading?

Apps have made it easier than ever to get into trading. There are many great apps out there. A lot of them even allow you to use fake money to test things out. I haven’t had any luck with that route. They give you a fake account, with fake money, so what you end up doing is fake trading. At least that’s the case with me. I take my $100,000 of fake money and splurge all over the market. It completely disconnects me from what real trading with my real money would feel like.

Step in Robinhood. Robinhood is an app that got a lot of buzz since it was launched because they claimed to charge no fees for trading. Traditionally, when trading with real money, other apps charge you to buy & sell your stock. I did some digging as to how this works and found this on RobinHood.com website:

Robinhood does not charge fees to open or maintain an account, transfer funds, or buy stock. However, there are fees charged by the US Securities & Exchange Commission and FINRA on all sell orders. This fee is charged to all sell orders, independent of the brokerage. Robinhood does not benefit financially from these charges, and they are passed on the relevant regulatory agencies in full. SEC: $23.10 per $1,000,000 of principal (sells only) – this fee is rounded up to the nearest penny. FINRA Trading Activity Fee (TAF): $.000119 per share (sells only) – this fee is rounded up to the nearest penny and no greater than $5.95.

Also, this on how they do earn money, because you know, everyone needs money:

With Robinhood Gold, you get up to 2x your buying power and access to after hours trading for as little as $6 per month. This is the only product Robinhood charges you for, and is completely optional. Trading is still commission free. Additionally, Robinhood earns revenue by collecting interest on the cash and securities in Robinhood accounts, much like a bank collects interest on cash deposits.

That story seems to check out. They allow you to trade with no extra fees, but then apply a limit on spending. When you up the limit on spending, you also get extra features like trading after the market is closed.

Seems legit, let’s give it a start. I had signed up to Robin Hood from the beginning so I had $10 in my account just sitting there from a sign up reward. I’ve also heard that they given out 1 free stock when you sign up. I searched online for good stocks under $10 and came across these:

  • GoPro (GPRO)
  • Fitbit Inc (FIT)
  • Crocs, Inc. (CROX)

I went through about 10-15 different articles and chose companies that I personally recognized and knew a little about. A big part of investing is following the news. Knowing what’s going on within a company can give great insight on how the stock will perform. If a company is going through a controversy, that would have negative impacts, as where a new product line may bring positive ones.

GoPro is the leader in action cameras. They just launched drones, and although they got off to a rocky start, their commitment to continue growing gives me hope.

Fitbit is a leader in wearable tech. Companies have even agreed to incentivize employees to be more active with company rewards. The hardware of choice to track these activities is Fitbit. By carving out a little space for them in the enterprise realm, it gives them a greater chance at longevity.

Crocs is a leader in… Well, I don’t know if they are a leader per say, but their shoes are really awesome! I’m not talking about wearing crocs with socks to go to Disney world. I’ve recently been living on a farm, and these rubber shoes have been indispensable. I’ve also seen great use for them as boat shoes. I’ve traveled all around the world, and only see MORE crocs, seems to me like a legit investment.

All of these sentiments hold both objective and subjective thoughts. Some are facts, some are opinions. When trading, these are your tools to making a decision. As much as you use hard facts, there’s a little magic that happens when you decide to “go with your gut!”

By no means, is this how you’re going to become an expert trader and millionaire by next week. However, it is a great way to get your feet wet in a world that can seem very daunting. There is nothing that sounds simple about stock trading, but this is my attempt getting into it. My hope is that sharing my experiences may spark something in you, go out and learn! To get started fast and simple, sign up for Robinhood.

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