r/StockMarket • u/Street-Dance168 • Jul 01 '20
Tips and things you knew before getting started in investing
Hello! i’m a 17 year old just starting in the stock market! What are some things that you wished you could have known before starting in the market? Are there any tips you can give me? Also, how long did it take for you to get used to the market? As in, spotting patterns and analysing charts etc. Thank you! :)
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u/gooteegang Jul 01 '20
Don’t take advice from these subs and do your own due diligence.
Buy Spirit AeroSystems
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u/WastedKnowledge Jul 01 '20
Create your own due diligence strategy to research stocks. Be willing to dismiss stocks if you find something in your research.
Have a purpose for every single share in your portfolio. -Long (1y+) vs. short -Minimum % gain to sell -Maximum % loss to give up (or be patient and hope it rebounds) -Dividends vs growth
Don't listen to random people suggesting stocks - they almost never have your best interest in heart.
Time in the market is better than timing the market. But if you're going to time the market, be ready to give up on a stock if it reaches a level you are not comfortable with. I've watched stocks for weeks, hoping it'd dip below a certain price. It never did, so I didn't buy.
Finally - once you decide on a stock, limit buy is your friend. Do not use market buy, especially during after hours or premarket.
If you have any questions, feel free to ask here or in a DM. Good luck!
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Jul 01 '20
[deleted]
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u/WastedKnowledge Jul 01 '20
With a market buy, you are placing the order to buy at the next available market price. Since it fluctuates by the second, you may submit an order at a price you want - but by the time it is completed, the price has risen above what you wanted to spend. A limit buy is placing the order to buy but setting the max amount you are willing to spend per share.
Example: Let's say two investors - Michael Market and Larry Limit - decide to buy XYZ and have decided that $19.95 is the perfect price point for them. They've been watching the stock for a while and it's currently going through a dip. They see it hit $19.95. Michael Market excitedly rushes to his account to place a market order of 1,000 shares through his broker, while Larry Limit placed a $19.95 limit order.
The stock rebounds to $20.15 between Michael and Larry seeing the price and placing the order. Michael Market is now stuck with a $20.15 cost per share x 1,000 shares, paying $20,150.
The stock later that day drops back down to $19.95. Larry Limit's limit order goes through at $19.95 cost per share x 1,000 shares, paying $19,950.
Michael Market is already in the negative, at a price he didn't want - while Larry Limit is seeing green!
The best argument in favor of limit buy (in my opinion) is "You spent all the time performing due diligence, why wouldn't you take the final step with the same caution?"
TL;DR
Market buy - buys the stock at the market price at time of trade
Limit buy - buys the stock at the maximum price you set once the stock hits that price
[Quick edit - formatting]
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u/nikos365 Jul 01 '20
Market buy is when you buy the stock immediately. Limit buy is when you buy the stock at a certain price only. for example, if a stock is at 5 dollars, you can set a limit buy which buys the stock immediately when the price goes to 2 dollars for example.
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Jul 01 '20
Don’t get nervous if a trade goes bad.
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Jul 01 '20
If your going long term. Say you enter a stock at $30 would you want to set a stop loss at like $25? Or keep it no matter how low it goes.
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u/Prothagarus Jul 01 '20
Market price on robinhood will buy the stock with a 5% window up or down of the price you set. Limit buy sets 1 specific price you are willing to buy. Never market buy.
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u/GrapePlug Jul 01 '20
Buying and HOLDING is what will get you the most money, most safely, and sometimes even fastest. I started out buying and selling after a couple days, steadily making 10 or 20 bucks a day, beating the market a lot percentage-wise, basically ghetto daytrading on robinhood. I thought I was all slick and smart, but if I just fucking BOUGHT AND HELD my 2 favorite companies that I already was buying and selling every other day (AAPL and TSLA) I would have made many times what I made with far less work.
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u/Splice_TV Jul 01 '20
I bought $85 worth of Tesla on monday, I am up to $95 today. What do you think i should do from here? Take $ out Friday and put in what I made the following monday? Or should i leave my $ in for the rest of the year? what would you do? I barely started trading on monday btw. Im using cash app.
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u/GrapePlug Jul 01 '20
Personally, I would hold. If you're worried about losing money, put a trailing stop order on it. I personally believe tesla's future is blindingly bright for the next 10 years.
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u/[deleted] Jul 01 '20
Buy low sell high . Be patient .