I decided to get my feet wet and actually put real money into a real trade in the stock market.

I bought 5 shares of a stock that looked like a good buy.  The Stochastics and MACD were both giving me buy signals.  It had a good PEG ratio and other indicators that it was a fundamentally strong stock.  It was in an upward trend.  So I bought some of it.

The stock went up for a bit … at its peak, I could’ve sold and made a $10 profit.  But I didn’t.  I was projecting it’d go much higher.  But then throughout the day, it slowly dropped down.  I ended the day yesterday with a $1.15 profit.  Hey, profit is still profit, and that’s just with 5 shares on my first day.

But then today, the stock continued to go down, and I actually started losing money.  I checked the charts and the stock behavior was indeed changing on me.  Rather than ride it out and potentially lose more, I decided to sell now.  I had already set a “stop loss” — limiting the maximum I was willing to lose, but I decided to get out even earlier and so I could move my money elsewhere.

Then I bought my first option.  I stumbled onto it by accident, while looking for another stock.  Again, it was giving me some decent buy signals and the timing seemed right, looking at the charts.  I bought one contract, a single call option, and gave myself plenty of time to be right.  You see, options all expire, sooner or later.  Most people buy options that expire in one month.  Instead, I paid for a 7-month option, giving me all the way until late January to be right. :)

As of this morning, the option’s value has already increased 10 cents… which, if I were to sell it now, would be a $10 profit, before commissions.

We’ll see how it actually performs long-term.  It’s a limited amount of money at risk — no more than I’m comfortable losing if I lost it all.  You can read books and attend seminars all day long, but sooner or later, you just gotta get into your first trade, make your best educated decision, and wait it out and see if you were right. :)

I just wanted to share the news.  I’m excited to be developing myself as a real-world investor.

Next is just time, practice, and experience.

Love you all,
David

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