(Relaunch) 7 Day Stocks – How To Make Your First Stock Trade

After nearly a year of running the original version of 7 day stocks, I took in ALL the feedback and hit the drawing board again. The goal was to create a better, more efficient, and simpler course to teach anybody how to trade stocks.

If you need help on how to open a stock brokerage account, then please start with the Guide To Entering The Stock Market.

I. What Has Changed In This Course?

The biggest change is that this course is no longer 7 days. I found that there were both successes and failures that happened in less or greater than 7 days. Ultimately, I made changes so this course can run as fast or slow as you like.

In all this course has made stock trading so easy, and if you still can’t do it after completion then you might want to consider some other form of investment.

II. Start Thinking The Right Way

90% of the battle to trading stocks is just getting in the right mindset. Learning to keep your cool when things look rough. Knowing when to stop being greedy and take some profit. Below are a few trading-ologies to help make the whole process much smoother.

Trade-ology 1: You Will Lose Money

There is no way around it. You will make trades that don’t work, and you will lose money. The key is to cut your losses short and ride out your gains. Learn more about how to protect your trade using stop losses.

Trade-ology 2: Understand And Utilize Patience

Don’t be scared of red. Very rarely will you buy or sell a stock right at its turning point. While you want to cut your losses quick, be confident in your due diligence and research and allow your stock some ample time/room to run.

Trade-ology 3: Stock Trading Is A Two-Sided Game

For every trade there are two sides: a buyer and a seller, a loser and a winner. When doing research you will almost always come across differing opinions and strong stances for opposing sides. Your job is to cut through the mess and make your own educated decision based on what you know.

III. Common Mistakes New Traders Commit

The best way to learn anything new is through the mistakes of others. For that reason, we will go over common mistakes or errors I noticed new traders commit.

Mistake 1: What Makes The Stock Price Move

I see it everyday, my inbox gets filled it, and even my friends commit this mistake. We are not in the 90’s anymore. Stocks don’t move like they used to. Just because a new product is being launched does not result in a higher stock price. Sometimes positive news is already factored into a stock’s price and other times the product is just a small part of what the company actually does.

In theory there are a lot of reasons that would cause a stock price to move and all stocks react differently to the same events, but a couple examples include: takeover rumors, innovation in production, limited supply of product, meeting, failing to meet, or beating analyst estimates of quarterly earnings.

Mistake 2: Check Out Too Many Stocks; Don’t Narrow Search

The first couple of stocks I ever traded included Microsoft, AT&T, and Starbucks, and I did fairly well on all of them. Not because I used any fancy techniques but because I was already familiar with what these companies do, so when I was doing my research I could understand what was good and what was bad for the company.

There is no rule to how many times you can trade the same stock over and over again. The more familiar you become with one, then better you can trade it.

Mistake 3: Don’t Track Or Continue To Track Stocks

Building off the second mistake, too often traders stop tracking a stock when the trade is over or past its time. Continue to track the stock even if you aren’t trading it anymore. You never know when another good opportunity will come, and since you are already familiar with what makes this particular stock price move, it should result in more money.

Mistake 4: Bad Share Allocation/Money Management

Either invest or don’t invest. If a stock cost $15, don’t buy 25 shares; buy no less than 100. If you’re trying to play it safe by just investing a little, then you are actually doing more harm than good.

Take the early example: Less say total commissions are $18. If you bought 25 shares then you need the stock to jump 1.2 points (8%) just to break-even.

Mistake 5: Horrible Time Management

Understand how much time is needed before you should expect your trade to work. If you are looking for stocks that should get a benefit from the holiday season, then you shouldn’t even expect to reap the complete reward until January or February when 4th quarter earnings are reported.

IV. Stock Trading Method

So lets finally learn how to trade stocks… The sites mentioned in the video and the transcript is summarized below the video.

Step 1: Create A List Of Companies

Come up with a list of 5-10 companies (or products if you don’t know company) you’re familiar with.
Find the ticker symbols for these companies using Google Finance (i.e. Microsoft = MSFT)

It’s amazing how much easier stock trading is when you are already familiar with what the company actually does. Eventually you’ll be able to venture out and find new stocks, but to ease in lets use some companies you already know.

Step 2: Do Your Research

Use some chart platform (Finviz or StockCharts.com) and notice the price range of your companies. Is it at the bottom or top of the range? The does stock even move at all? If its range has just been a few points over the last year, then odds are it probably won’t be moving further anytime soon.
Search for your stocks on Stocktwits and see what other traders are saying. While you don’t necessarily want to listen to them, you can at least see what others are looking at. Follow me on Twitter.

The idea is to get a feel for the stock, where it sits right now, and where it can go from there. Is there some eminent bad news or is the company in a state of growth and expansion? During this time, you’ll reject some stocks completely and your list will narrow down.

Resources to help with research:

As you learn more advanced methods, you will able to spot some specific criteria that you look for.

Step 3: Make A Judgment And Record It

Based on all the news and information you have gathered, it is time to make an informed decision. What direction do you think the stock will go? How far will it go (price target)? When do you think it will get there (time frame)? At what point can we consider this trade a failure (stop loss)?
Record all this information in a journal of some sort. List the current stock price, your price target, a stop loss point, a brief description of your opinion, and how long you think it will take. See 3 Ways To Not Lose Money In The Stock Market.

The idea is to see what makes your stocks move and get a feel for what works overall. By keeping a journal, we can trace our progress and learn from our mistakes.

Notes To Remember

Remember to have an entry, exit (price target), and stop for every trade.
Don’t second-guess yourself. At the worst you lose a couple of dollars. That is why you have a stop point in place.
Remember your time frame and volatility. Don’t expect a stock to magically make 10 points a share when it has been trading within the same 5 point trading zone for the last year.

I am confident you have all the tools and resources to making a profitable stock trade. The hardest part now is to get over your fear and JUST EXECUTE THE TRADE. I guarantee you it will be one of the most powerful feelings you have felt.

If you still feel uncomfortable, consider virtual stock trading platforms such as Wall Street Survivor.

V. Easier Method

Watch the video below to learn an easier way to trade stocks.

Click here for your 30 day trial of MarketClub.

Chart Pattern Manifest The easy way to learn technical analysis