Investing/Stock Market

Lil

SV huntard
I started investing in the stock market in March shortly after the pandemic started. I've made almost 40% profit since by flipping/buying a few key stocks but I definitely don't know very much about it still.

I bought Boeing/NRZ as my main two stocks and rode them out since they were nearly 80% under their high pre-covid so I figured it'd be a guaranteed win. I flipped some random mining stock one day 3 times for a $3500 profit and became a day-trader so I'm stuck for like 60 more days but lately I've been buying upcoming earnings stocks and flipping them after their earnings call.

I use Robinhood for those that might be interested as it seems very user friendly and everything is completely free to the point where it almost seems like monopoly money. Is there anyone else on here that plays the stock market or anyone else that maybe started like me shortly after C19? What has worked for you? What hasn't worked? What do you look for? What's your go-to stock? What is something a newbie should know beforehand?
 
Max out contributions to tax deferred accounts like Roth IRA and 401k yearly if you can. If you're located in the USA, taxes on short term capital gains can be quite significant, keep this in mind. Learn money management. First rule of Ferengi Acquisition: once you have the money, don't give it back.
 
Counsel said:
Max out contributions to tax deferred accounts like Roth IRA and 401k yearly if you can. If you're located in the USA, taxes on short term capital gains can be quite significant, keep this in mind. Learn money management. First rule of Ferengi Acquisition: once you have the money, don't give it back.
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To add to this... if your company does a 401k match, that is your priority investment. Invest up to the full company match to take complete advantage of the free money they’re trying to give you. For example my company does 100% up to 3%, then 50% up to 6% (or 4.5% annually to simplify the math). After you meet that match, invest in a Roth IRA. For most people, you will be able to invest $6k a year into one. Roth’s provide a better return on long term investments than most 401ks. Once you exceed both of those is when options really begin to open. I personally opt to go back to my 401k until I reach my yearly cap ($18k), but that’s just a personal option. After that, I invest in stocks/bonds. I enjoy the Robinhood app for ease of use, but it doesn’t tell you the drawbacks to fast money. Do a bit of research on the matter. Reddit has some great resources on the topic [(FIRE) Financial Invest Retire Early is a very educational subreddit filled with success stories]. While there is a chance you could strike big on stocks, the vast majority of people will not due to lack of education on what their money is doing. So make sure your moves are carefully thought through and your research has been done.
 
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I saw the thread title and expected a bunch of cringe responses, but I'm shocked and thrilled to see such good input here.

In the short term, it's possible to make some great/lucky gains day trading. The problem with day trading is that you can make seven great calls, and one bad call will wipe out the seven good ones. That's why it's good to always split some of your winnings into long term investments, like @Zerofoxtrot said. The FIRE subreddit indeed has great info.

If you work for a company that gives you tax deferral opportunities, like @Counsel mentioned, take any and every one you can. The biggest gap between tax brackets in the USA happens between 12% and 22%, so putting money into retirement accounts is like gaining 10% off the top, just for saving.

Short term capital gains e.g. money made off of stocks held less than a year, counts as regular income -- make sure you pay your quarterly taxes on that, or the government will hit you with some penalties at the end of the year.

@Donor is spot-on about using a Roth IRA, since that doesn't require working for anyone, and your gains inside the Roth grow tax-free.

My current favorite book about personal finance is The Simple Path to Wealth, by J.L. Collins. If I could have written a book, this is what I would have written, and he did a way better job than I could have. I also recommend The Richest Man in Babylon by George S. Clayson and The Millionaire Next Door by Thomas Stanley and William Danko. Babylon is a tough read, but does a great job exploding some problems with how people think money works. Millionaire is based on a demographic study of how millionaires earn and spend their money, and their statistical findings are downright shocking. Other than being sexist, the book does a great job reframing how wealth grows (and disappears). My favorite factoid: the number one vehicle millionaires buy and drive, is an old Ford F-150.

Nothing wrong with day-trading, but it's gambling, and 94% of people come out behind in the long run if they don't employ a strategy to keep part of their winnings. Now that you started twinking with personal finance, gear up your knowledge, and grind for the long term advantage!
 
Lil said:
I started investing in the stock market in March shortly after the pandemic started. I've made almost 40% profit since by flipping/buying a few key stocks but I definitely don't know very much about it still.

I bought Boeing/NRZ as my main two stocks and rode them out since they were nearly 80% under their high pre-covid so I figured it'd be a guaranteed win. I flipped some random mining stock one day 3 times for a $3500 profit and became a day-trader so I'm stuck for like 60 more days but lately I've been buying upcoming earnings stocks and flipping them after their earnings call.

I use Robinhood for those that might be interested as it seems very user friendly and everything is completely free to the point where it almost seems like monopoly money. Is there anyone else on here that plays the stock market or anyone else that maybe started like me shortly after C19? What has worked for you? What hasn't worked? What do you look for? What's your go-to stock? What is something a newbie should know beforehand?
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I've been doing it for a couple of years now after starting my bachelor as an International Business student. What I would recommend to you if you're just starting out is investing in commodities like oil/gold/gas etc.
It's pretty easy to predict the way it's going to go. But patience is really the key when investing in commodities. You have to wait for the perfect moment. For example, 15th of June 2020 I saw that the price of oil was swiftly going up after the global market was slowly becoming active again.
mXjUFYj.png

When it broke the previous resistance level it automatically initiated a buy order and I rode it out for a few weeks until I had almost closed the gap you can see on the left of the picture. Which is an obvious level of resistance. The momentum of the bullish trend started to die off shortly after and entered into a semi-sideways market.
I had invested 180 euros and made a gross profit of 522 euros on the investment which is almost 200% net-profit on a single trade.
4TZcznE.png
It did have a leverage of 1:10 so it would have been 20%, but I was pretty confident so I decided to take the leverage.

This is basically what you have to do in the beginning to understand the basic principles of investing.
- Get a feel for the price-action movement of the specific market you're investing in.
- Know where the support & resistance levels are.
- Always go with the trend as a beginner

And probably the most important one for commodities is, to keep following the news.
When I had already opened the position on oil, shortly after, members of OPEC and other allied countries pledged to cut oil production by almost 10 million barrels a day.
7hzLf0u.png
Which was a record-breaking cut and resulted in demand going up and supply going down. Which in turn resulted for oil prices to skyrocket. People who hadn't already opened a buying position on oil surely did after reading the news about this deal. So when you're paying attention to news, when you see stuff like this it's pretty easy to determine what's going to happen in the market. I kept my position open for weeks, but people could have easily opened a short-term position to get quick profit from this news. Something called scalping.


Currently, I'm focussing more on Forex trading with the scalping strategy which does require a bit of practice to actually be profitable with.
Scalping; Scalping is a trading style that specializes in profiting off small price changes, generally after a trade is executed and becomes profitable.

The profit isn't huge on a single trade but after getting a bunch of profitable little trades in a row you'll quickly rack up some nice cash.
QAEECBY.png
Almost 200 euros profit in 1 day, I admit it was a pretty good day it's not always like this xD

As you can see there's no "perfect strategy", you'll have wins and losses but the trick is to get more wins than losses and you'll be profitable. I'd suggest doing some research on scalping.

I hope I was helpful to you and I wish you the best of luck!
 
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Lil said:
I started investing in the stock market in March shortly after the pandemic started. I've made almost 40% profit since by flipping/buying a few key stocks but I definitely don't know very much about it still.

I bought Boeing/NRZ as my main two stocks and rode them out since they were nearly 80% under their high pre-covid so I figured it'd be a guaranteed win. I flipped some random mining stock one day 3 times for a $3500 profit and became a day-trader so I'm stuck for like 60 more days but lately I've been buying upcoming earnings stocks and flipping them after their earnings call.

I use Robinhood for those that might be interested as it seems very user friendly and everything is completely free to the point where it almost seems like monopoly money. Is there anyone else on here that plays the stock market or anyone else that maybe started like me shortly after C19? What has worked for you? What hasn't worked? What do you look for? What's your go-to stock? What is something a newbie should know beforehand?
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taxes, be ready to pay

i had a lucky hit on some stocks last year, if greatly affected my income bracket, of course no taxes paid on gains during the year, between state and gov i owed 16K (included penalties). you have to be ready for this. no matter the amount, because your days of getting returns will be rare or will involve having a bad year to get a return.

if you pay taxes early based on gains, and in last month of year suffer huge losses, you will pay penalties for overpayment. a real rope a dope either way

filing taxes, best to do online thru a tax service. i use taxact, state amd gov cost me around 100 due to investments

going to your local HR block, etc, will be around 700++

research your stocks imo, if they are partnerships, that involve schedule K, stay away. over complicates things
 
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First of all, why are you using RH lol?? I would switch to a much better brokerage immediately. You don't want to put your money with a firm that doesn't even have a call in number. Robinhood also has terrible fills and you get a ton of slippage. I recommend either Schwabb or TD Ameritrade. I have personally been trading since college, so I manage a pretty sizable portfolio currently. I mostly trade cash covered puts and covered calls on stocks that I feel will be delta neutral in the market. I also run iron condors with about 25% of my portfolio for additional premiums. Currently I earn 2% return on capital per week with a 50k portfolio (1k per week), so I can basically live off of it if I wanted to.

I recommend that you stop making plays on earnings until you are extremely comfortable with what you are doing! Look up the term IV Crush lol. In a lot of cases, you are straight up gambling when you buy calls that expire right after earnings. A more profitable (but somewhat slower) way to profit is using theta decay, which I personally prefer. You want to be the one selling the options, not buying them...

Anyway if anyone else is interesting in talking about stocks or options plays, we can start a disc group or something
 
Lil said:
I use Robinhood for those that might be interested as it seems very user friendly and everything is completely free to the point where it almost seems like monopoly money.
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Your personal pros/cons using Robinhood?
 
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