And even better when you really do love America! Which I do! :)

J$:

A cash brokerage account is a great way to increase your extra savings. As long as you buy and hold you do not have to worry about additional tax liabilities. The other thing is that if you purchase on a regular basis, you can always take withdrawals to work the taxes to your advantage. We used to do this with our previous Employee Stock Purchase Plan.

As for the market, just like you told your better half last month, you are in it for the long haul. Warren Buffett says you should bet on America and you will never go wrong following his advice.

Love the insight brother, thank you!

And appreciate the book rec as well – I went and edited in a link directly to it so others can find it faster…

Funny you mention taxes too. As lame as it sounds, it’s a principal reason it took so long for me to finally open up a non-retirement brokerage account myself. I just low how easy and simple it is trading in retirement accounts and never wanted to mess with the tax side of things in normal brokerages!

But finally sucked it up last year when I had an influx of money I no longer wanted to sit in savings and def. glad I am (although I lost most of the profit already due to the market lately, haha….) And since I use an accountant it’s not terribly annoying – I just have to remember to get the proper paperwork each year going forward!

I’ll second that one, good sir.

Hi there Super, thanks for the attention to detail!! Let me make some clarifications here: After my initial loss I took some time off and hit the sheets – paper trading that is! While doing that I did my research and tried to figure out where I went wrong, and how I failed so miserably.

Fast-forward to January of 2018: I jumped back on the horse with a portfolio value of $1000 and began contributing $160 dollars every two weeks going forward. Typically one could expect a much faster gain with 1-2% increases in value, however to clarify I do not trade every day. I am not a career day-trader, I’m an average Joe who works 5 days a week of which 3 are at home. On those days I spend the mornings filtering and searching for news items that may positively influence stock value. If I don’t find any, I take the day off and begin my day’s work a little early. Which is why Rule #5 is so important as it prevents you from forcing a trade that may not be in your favor.

I can see the misconception because if I were trading 5 days a week maintaining those 1-2% gains each day I would reach my current value in only 7 months. However this is calculated using a standard compounded interest formula with a $160 contribution every two weeks. It does not take into consideration the days I am heavy red, or the opposite. Example I may grow 20 days around 1-2% but if I have one trading day where I lose 15% it will heavily impact my overall value but not significantly impact the daily gain average. Thus the problem with averages versus medians. If I had to take a guess I’d say median growth is around 0.4% however my trading platform doesn’t automatically calculate that.

Let me know if this clears everything up or if you have any other questions!

Brandon

Super:

I bet he means 1-2% per day on his trade for the day and not on the total balance. Once he begins to trade with a more sizeable amount of money he will no longer be able to trade penny stocks as each of his trades have potential to move the price of the stock and the options along with it.

Mr. SoS

J$:

One thing I do is only invest and trade in companies that I understand and research. This helps avoid most losses. The market can always throw you for a loop, but research pays off.

Mr. SoS

I have a confession to make. I occasionally trade weekly options. I started trading a couple years ago and I have learned a great deal in that time. I only traded through June last year in my cash brokerage before I cashed it out to pay debts. During that time, I made $161.39 after fees and commissions. Besides wanting to pay down debt, I stopped trading in my cash brokerage because my accountant told me I was barely breaking even after short-term capital gains taxes. Anyone looking to trade daily, weekly, or even monthly, should check with a tax professional to make sure they understand how their trading will affect their taxes.

Now I only trade within our IRA and Roth IRA accounts. You do not have to pay capital gains taxes on your trading. You will eventually pay taxes when withdrawing from your IRA, but will never pay taxes on your gains from your Roth IRA. I had quite a bit more capital to use, but last year I made $46,227.35 after fees and commissions. This was part of the reason our net worth was up for the year while much of the community was down for the year. I briefly spoke about these trades in our net worth posts each month.

Like Brandon, I use ThinkorSwim for charting. I agree that any options trader should have a fundamental understanding of candlestick charts. I have not read his book recommendation, but I suggest searching for and reading the information about candlestick charts on Investopedia.

Trading options takes discipline and it is incredibly difficult to keep emotions out of your trading. I believe emotions are the reason most people lose money in the markets. You have to have trading rules and you need to follow them. Brandon’s rules are very good. These are similar to rules described in a book I read a couple times called Trading for a Living: Psychology, Trading, Tactics, Money Management by Dr. Alexander Elder.

Ultimately, you need to learn from your mistakes so that you can end up earning money rather than losing it. Trade with a paper account before you trade with real money. Create rules that fit your style of trading. When you find a technique that works, utilize it and update your rules as you learn and as the market changes. Eventually, you may find that you too can be a trader.

Haha, I like it…

I don’t remember ever buying a penny stock myself, but I did used to buy the next “hot thing” I heard all over the news when I first started…. I remember picking up Sirius satellite radio even though I had no idea what it really was or why I should buy it haha… Ended up losing on that one because of course I tried timing the market and failed miserably :)