Chapter 3: How to Make Money Trading Stocks
I am getting closer to my first trade of the 52 week high stocks. After thinking long and hard about my trading strategy, I have decided to only invest in stocks that have hit their 52 week high and stocks that have a price point of at least $50 per share. I will be looking for stocks that show a steady increase in earnings over at least the last year and just overall great companies. I will avoid companies that are about to be involved in an acquisition.
Of-course, to make any real money in stocks, you need to have a large capital to invest. I did consider taking out a loan from my credit-card, however I found that the interest rate and the fees are just way too high and the limit for my loan is too low. Instead, I have decided to take out a personal loan from my bank. I did send them an email request to see what would be the maximum amount of loan I could qualify for. My future is in their hands.
Once I get my cash together, I will open a margin account. I still have to find out all the fees, but I am excited. I have decided to run a test based on one year of daily 52 week highs of the caliber of stock that I am interested in buying just to see what my chances of success actually are and how long I would actually need to hold a position before selling it. Also, I need to estimate what kind of monthly profit I can expect and whether or not I would still be making money after paying off my loan every month.
This is definitely some risky business here. However, I definitely feel that it is worth the return. I will be selling off my positions after the share price goes up by one dollar. Wish me luck and I will be back with more updates about my rookie trading experience.
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