Hello, and welcome,
new investors. My name is Cameron May. And if you've never even
placed a trade before, you're in exactly
the right place. We're going to be
talking about how to get to where we're placing
our very first stock trade. To do that, we're going to
talk about what a stock is. We're going to talk through
a potential strategy for selecting a
stock for investment. And we're going to
show you how to place that trade on the
TDAmeritrade.com website, including a buy
order and a seller. So let's get started. First, what is a stock? When you buy a share of stock,
what you're actually doing is accomplishing a
partial ownership of a publicly traded company. For example, if you buy a
share of McDonald's, you're becoming a partial
owner of that company. These shares are bought and
sold in a marketplace called an exchange, and prices
are set according to the changes in supply
and demand for those shares. Second, why invest in stocks? On a really basic level,
you stand a chance to profit if you're able to
purchase the shares at a lower price. And then if they appreciate,
you can sell them at a higher price. This might allow the investor
to grow their money faster than just saving. And in any event, it
could put us in position to stay ahead of the decaying
impacts of inflation. So there are lots of ways
to pursue stock investing. We'll focus on ways to
identify individual stocks with potential for high growth
over the next few months to a year. Now, picking individual
stocks isn't for everybody, but for those with the time and
knowledge to do the research, it can be a way to
pursue portfolio growth. Someone who may not have
time to really research companies and keep
up with the markets may be better off with a
more passive investing style, like index funds. There are four
essential decisions when it comes to buying a stock. First of all, we have
to discuss what to buy. Then we need to
explore when to buy. We need to determine
how much to buy, and we have to have a
plan for when to sell. Let's get to our first
decision, what to buy. When it comes to
deciding what to buy, it's pretty research-heavy,
but it's also where you should spend most
of your time in this process. Now, due diligence
can't completely protect you from an
unexpected market turn since gains are not guaranteed. But it can make sure you
know exactly what you're investing in. After all, Warren Buffett says
to never invest in something you don't fully understand. Investors can use a process
called fundamental analysis to better understand a company. You look through a company's
financial statements like balance sheets to determine
if it's a good investment. Think of it like
looking under the hood. To make sense of
the financials, you can look at several
ratios and numbers. These can help you
answer basic questions, like, is this company
growing, and help you compare companies of different sizes. We're only going to look at a
few numbers, so keep in mind, this is not a complete list. It's just a sampler
of some ratios you can look at to get you started. First up, we'll look
at EPS growth rate. EPS stands for
earnings per share, which tells you how much
a company is profiting for every share of stock. For example, if a company
reported $1 million in earnings and had 100,000 shares of
stock, its EPS would be $10. Growth in EPS over time can
show a company's profitability is growing. Let's say a company has an
EPS of $10 per share in 2018, and in 2019 they
had an EPS of $12. The annual growth rate for
that company would be 20%. This suggests the company is
growing, especially if EPS has grown over multiple years. Next, we'll look at
return on equity. ROE may help a
prospective investor address a simple but
potentially important question. If I'm considering
investing in this stock now, how has this company performed
for previous investors? The return on
equity is net income of a company divided by
the shareholder equity. Shareholder equity
is a company's assets minus its debt, so the ROE could
be considered the company's return on its net assets. Basically, it
measures how effective a company is at turning
its assets into profits. Let's say a company has had
a net income of $10 million last year. Let's say it has $50 million in
assets and $20 million in debt. You take the 10 million and
divide it by assets minus debt, so 30 million. That would mean this
company has an ROE of 33%. The higher the ROE, the
more effectively the company is able to make profits
from its assets, which could mean more growth in the future. Next, let's think
about profit margin. Profit margin may indicate
to a prospective investor just how good of a
job a company is doing at turning sales into profits. Can it keep costs
low and provide room for strong earnings? The profit margin measures how
much of a company's revenue it keeps as profits. It's typically shown
as a percentage. So if a company profited
$100,000 off of $1 million in revenue, it would have
had a profit margin of 10%. Higher profits often mean more
potential for future growth. So now that we understand
these analytical metrics, how does an investor
find companies with strong EPS growth,
ROE, and profit margins? Let's go to the website. Now we need to find
stocks that seem to fit those characteristics. So how do we do that? Well, here on a TD
Ameritrade account, we find ourselves on the home
page on the My Account Overview page. And we're going to
navigate up to find stocks. We're going to go to the
Research and Ideas tab and then down to the Screeners and
go to the word Stocks. So I'm going to click
right on that link, and that's going to take us
right to the Screeners tool. And from here, I'm going to
click right on Create a Screen since we're going to be creating
a screen from scratch that's going to look for the stocks
that are exhibiting those three characteristics that
we're interested in. So here we are on the
Create a Screen page, and we're going to turn our
attention to this left column. This has broad categories that
we can select our criteria and then enter specific metrics. Now, here, I'm going to
take a bit of a left turn, and I'm going to
add a new criteria. And I'm doing this for
a very specific reason. I want you to
understand that there is flexibility in the
approach to investing, even within growth. You should feel
comfortable as you get comfortable with
your own approach to investing to add
your own criteria. So we're going to add a criteria
known as market capitalization. So what is market
capitalization? Very simple concept. It describes how big the
publicly traded company is. We have some companies
that are small, some companies that are large. The way that these
are identified is we take the current
price per share and multiply that by
the number of shares that are trading in the public. So if we had a stock that's
trading $100 per share and there are 1
million shares trading, we'd say that that's a market
capitalization of $100 million. That might sound like a
lot, but that would still fall in the small
capitalization category. And that's what we're going to
select for our example today. So think about what a growth
investor is looking for. They're hoping for price
to appreciate, to go up. A small cap stock conceptually
may have more room to the upside. So we're going to
select small cap. Obviously large cap
companies can also grow in size and in price. So that's one criteria
that we've selected. What I want you to
note, though, is we started with over
11,000 companies. And just by selecting
small cap, we've narrowed that down
to just 8,000. So let's go add our
other three criteria and see if we can narrow
that down even further. Those three that we've been
discussing, as you now know, our fundamentals. So I'm going to go to
the Fundamentals area, and let's start with
earnings per share growth. Now, a handy feature
of the search tool is that it gives us the average
earnings per share growth over a specific time frame. By default that's
the last quarter. I'm going to switch
this to the last year. And we can see that in
current market conditions, the average company
has actually been struggling to a negative
EPS growth of 12.56%. As a hypothetical
growth investor, let's say that we're
looking for positive growth, and we're going to dial up
that even a little bit more. Let's enter a
specific requirement. We're going to go to the
Enter Specific Values and look for stocks exhibiting
EPS growth over the last 12 months greater than
or equal to 10%. So this is setting
that bar quite a bit above the current
average, but you can see there are still
3,300 companies achieving or exceeding that bar. Next, let's go to
return on equity. Here's our ROE, and we can
see that that average is also automatically published
right here, 4.90% currently. So what might a growth
investor be looking for? Well, they might be looking for
above average return on equity. Maybe that might be
a minimum threshold. Let's enter that as a
specific value requirement. So we click on Enter
Specific Value. We leave the metric as
greater than or equal to, but we're going to
enter a value of 4.91%. So we're setting it just above
that average bar threshold. In any market condition, above
average is above average. So now, finally, we're going
to go to Profit Margin, check that box. Here's our third
fundamental metric. Our average right now, 4.75%. And we're going to enter
a specific value just above that average. How about we set that at 4.76. Clearly, from the
time this is being recorded to the time
you are watching it, these metrics could change. So remember to adapt this as
you see fit for these metrics and for any others that
you feel like introducing. So just those four metrics
that we've now entered have pared down the list
of potential candidates from over 11,000. Now we're only looking at 673. I'm going to add one more
criteria requirement, and that is going back to
that small cap requirement. When dealing with small
capitalization companies, some growth investors
might be concerned that if they get into
very low-price securities, there may be more
volatility than they were willing to sign up for. So let's go to price and
volume in that left column. And we're going to
select current price and set a minimum
for today's example-- and this is an example only-- of $20 to $30, and then
crank that up to $30 to $50, and above $50. So really, what we're
telling our search engine is that we're looking for
any growth candidate that is priced at $20 or higher. And as of this
moment, there are 130 that are meeting all
of our other criteria and have a price
of at least $20. So as we go to view these 130
matches, just bear in mind, we know five things
about every single stock that we're about to see. They are small cap
stocks with greater than average earnings per share
growth actually exceeding 10% and higher than average
ROE and profit margin. And every single one of
them is $20 or higher. So I'm going to click
on view 130 matches. The search engine
is going to go look through those more
than 11,000 candidates that we started
with, and it's going to give us a prioritized
list of those that are meeting all of our criteria. So we've discussed what to buy. We've gone to the site and found
stocks that meet our criteria. Now we need to get
to decision number two, which is when to buy. Now, for some
long-term investors, they might find a
stock on their screen and just go ahead and buy it
and hold it for a longer period. But in the short term,
timing can play a big role. And in pursuit of this,
we may employ a practice known as technical analysis. This is the usage
of charts where we're looking at historical
trends and patterns in price to try to predict future prices. Technicians believe
trends repeat themselves and are predictable
because human behavior is somewhat predictable. Now, a growth investor
is very likely looking for a stock that's
already moving upward, and they just want to
latch onto that momentum. So we have to be able
to identify a stock's current trend, and that's done
using technical analysis, which requires charts. So let's go back to the site
and have a look at some charts. We've asked ourselves an
apparently simple question. We're looking for a
stock that is uptrending. However, the definition
of an upward trend can be very flexible. And as a matter of
fact, stocks can move in three different directions. They can move up,
they can move down, and they can move sideways. And a growth
investor is probably only interested in one
of those, the first. We're looking for an
upward-trending stock. So we need to train our eyes
to recognize an upward trend. Now, a nice feature
of the platform is that if we just
hover our cursor over the symbols
for these stocks, we get a thumbnail
chart which gives us a view of the last six months
of prices rising or falling. And as we look here at M/I
Homes, we can see that, generally speaking, over
the last three months, prices appear to be rising. But there are others where
that might not be the case. As we scroll down a little bit
further, we see maybe an IRET. We've been breaking
even for the year. Further still, down to
JBSS, going sideways-- now, I want to
explore those charts in a little bit greater detail. To access these stocks,
all that we need to do is click on a symbol,
and it's going to take us right to more
detail elsewhere on the site. So I'm going to click on MHO. So as we click on
this symbol, that takes us to what we call
our stock's profile page. And from here, we want to direct
our attention to the tab that's titled charts. I'm going to click
on that, and that's going to load up a chart
that a technician might use to begin to identify trends. Now, for the purposes
of today's discussion, I'm going to be using
a six-month chart, but trend analysis can be
really theoretically done on any time frame. But now, let's start to
address that question. Is this stock upward trending? How is that defined? Well, over the course of
the last century or so, traders have been
observing that stocks tend to not move
straight up as they're moving in an upward trend
or straight sideways as they're going in a sideways
trend or straight down. But instead, there tends to
be a stair-stepping process, an ebbing and flowing
in the direction of the established trend. And so what we look for are
short cycles in price, a run up and a pullback, a run
up and a pullback. And to illustrate this, I
want to draw some trend lines for you. So we're going to activate
the Draw trendlines tool. And we'll notice here on MHO
that, going back to mid-March, we hit a low right here and then
rallied up to a cyclical peak. Then we sagged back to a
cyclical low, accomplished a second rally, and down
to a third cyclical low. And what has been noted
by technical traders over the years is that as stocks
move in these short cycles, if each cyclical peak
exceeds the high of the peak before, they define
that as an upward trend. This is known as a higher high. Particularly when paired
with higher lows-- or as we hit cyclical lows,
if those cyclical lows exceed the lows from the
previous cycle, we now have a combination of
higher highs and higher lows. And if we carry that
forward to the current day, we just connect the
highs and the lows, observing highs and lows. And we can see where
that trend is taking us. Now, that is one potential
definition of an upward trend. But as we've discussed, trends
can behave in other ways. So let's look at an example
from our list of stocks. Let's type that right up in
the upper right-hand corner in our symbol box,
and just click Go. And that's going to
retrieve a chart for IRET. And in this example,
I want to look at this period of
time from February down to that first
part of April. What we notice with the
cycles here is that we hit-- and again, let's turn on
our Draw trendline tool. We hit a cyclical
peak in mid-February, selling down to a low in late
February, rallied up to a peak in early March, down to
a cyclical low mid-March, and so forth. Observing those
highs and those lows may help an investor
who is otherwise uncertain about the current
direction of the stock to define the trend. For a growth investor, they
may see a behavior like this, and that might eliminate
this from consideration for investment for
a period of time. As we look forward to
the last few months, we can see that that
pattern has reversed itself. And this might now be considered
for growth investment, provided it's meeting
our other metrics. A final potential
trend is sideways. Now, you might think the
definition of an upward trend is higher highs and higher
lows, the definition of a downward trend is
lower highs and lower lows. So therefore, a sideways trend
must be, by extrapolation, equal highs and equal lows. Well, in real practice, that's
an exceedingly rare occurrence. Usually highs and lows
are not identical. They're not equal. Instead they are similar. So let's look at a third
stock from our list of stocks from our screen. Symbol was JBSS. And in this case,
we have a stock that's not accomplishing
higher highs and higher lows. It's not accomplishing
lower highs and lower lows. But instead, you can see that
as it attempts a cyclical rally, those highs are taking us up
to relatively equivalent areas. So we have similar highs,
and at the same time, we see that we
have similar lows. On this chart, the lows appear
to be in the area of $80. The highs appear to be in
the area of $88 to $89. So again, for a growth investor,
they may see a stock like this, and they may park that for
consideration of another time. Technically, doesn't
seem to fit the bill. So there is how we
might identify a trend. And we've identified
a single stock that seems to be
fitting our criteria. And actually, two-- MHO and IRET-- are meeting
our fundamental criteria. They also are exhibiting
characteristics of an upward trend. I'm going to go back to MHO. This is one of our
upward-trending stocks. And you may have already
observed that even within an established
upward trend, conceptually, there may be better times
to get in than others. So I'm going to move on
to a second principle of technical analysis,
and this is known as support and resistance. Those might be
unfamiliar terms to you. Support is a fancy
term for a price floor. Resistance is a term
for a price ceiling. In the case of MHO,
what we'll notice is that if we were to draw a
line connecting those lows, it's as though there is
an invisible ramp that is supporting price
activity from below. The stock runs up, and
then it pulls back. It touches along that ramp. It runs up and it pulls back,
and it touches along that ramp. It runs up and it pulls back,
and it touches along that ramp. So this has come to be referred
to by traders as support. And that can play an important
role in the timing of entry. Because as you
look at this chart, where do you think you might be
inclined to get into the stock? Would it be at times where
the stock has separated itself significantly from
that support level, or as the stock has retraced
and come down close to support? Now we're starting to
think like a trader. You may have also noticed
that there is a second ramp effect in play here,
and that is if we were to connect the highs. Let's draw a line connecting
those cyclical highs, and we notice that it
appears, in this case, that it's almost like there's
an invisible force resisting the advance of stock
prices above that line. Now, in both cases,
support and resistance, there's nothing mystical
about these forces. It's actually just buyers
coming in driving prices back up from support and
sellers coming in driving prices back down from resistance. But the ability to identify
price floors and price ceilings, price support
or price resistance, may help a trader who is looking
for a growth opportunity, looking to optimize
their entries. Now that we've identified
trend and we've identified support
and resistance, we can start to learn
from historical behaviors on this chart and maybe look
for entry opportunities. What I'm going to
do here is zoom in. So we're going to enable the
Zoom function on our chart. And I'm going to click and
drag on that chart on just those last few
months, and that's going to give us a closer
look at just that detail. And we'll notice
that as the stock has been stair stepping
higher, there are specific points at which
the trader might look for entry. And if we look
back to late March transitioning into early April,
the stock has pulled back, and it's come back down
to a possible entry point. And for some investors,
just that mere pullback may represent an
opportunity to enter. But there is a concern here. That is that we might be trying
to catch a falling knife. So for other traders, they
wait for that price momentum to swing up again. And they start to
employ these little hash marks that you're seeing here,
red and green hash marks. These are called candles. And very simply, they tell us
day by day what price has done. The green ones tell us that
price went up from the open. The red ones tell us that
price fell from the opening values of that day. So for a short-term
investor who's looking for a
growth entry signal, they may look for a pullback
down to an apparent support area that is accompanied
by a green candle, or in other words, we call
this a bullish candle. Price is starting
to move up again. So that's one potential entry. So we're starting
to bring together the elements of technical
analysis-- trend identification, support
and resistance, and now entry signals. But I want to give
you a new tool here. Let's start to explore some of
the technical indicators that are available on this chart. One tool that is commonly
used by technical traders is something known as
a moving average, which can be used to identify trend. It can also be
used, theoretically, to identify areas of
support and resistance. So I'm going to add that
moving average to our chart. Right up here, in the field
titled Upper Indicators, I'm going to click on
the little dropdown and select SMA, which
is an abbreviation for a simple moving average. Now, as we add our simple
moving average to the chart, we'll notice that
we get two lines. For today's discussion,
I just need one. So I'm going to eliminate one
of those using the little box right next to Price MHO. I'm going to click on that, and
that shows us our two lines. I'm going to get rid
of that second line and change the
first line to a 50. And I'll explain what I'm
doing here in just a moment. But I'll click
update, and you'll notice now we have a
single green line moving through that price chart. So let's talk about
what this green line is and its potential implications
for that growth investor. For our purposes
today, I have selected the number 50, and that was
for a very specific reason. What I'm trying to address
here is the question, I wonder what the average
price has been for this stock over the last 50 days. This indicator looks back
over the last 50 days and generates a
plot on the chart to indicate where
that average price is. On our chart today, I can
see that that line is just below 30, right around 28. So that tells me the average
price over the last 50 days is about 28. Well, that average
changes over time. So this just plots a
new dot every single day and then connects
that with a line. That's how the
indicator is generated. But how is it used? For a technical trader, it may
just be an indication of trend. We're using 50
days of data here, so it's more of an indication
of an intermediate trend direction. And in this case, you can
see that very recently, right around the
second week of May, the trend changed as defined
by this simple moving average. So trend direction is
one potential application for a trader. Another very possibly
powerful application is that this indicator might be
used to generate entry signals. You'll notice, in the
third week of April, price rose up and through that. For some technicians, that
might actually signal an entry. And in this case, you can
see that since that date, the stock has continued to make
higher highs and higher lows. So here we've discussed
two potential entries. A first might be simply
price rising up and through that moving average. But in the absence of a recent
signal from that crossover behavior, the
investor might also look for the stock price
pulling down to a support level and then accompanied
by a green candle. So let's look to see if we
have a more recent signal. Let's draw our
trendline in again. Let's connect those lows. There is our potential
support area, our price floor. And you can see very recently,
price came down in early June, touched that support level,
and we got a green candle. So here we're seeing a potential
entry signal very recently. And as we look at the activity
over just the last few days, prices come back
down to that support. Maybe we'll get another one. We've discussed what to buy. We've covered when to buy. Now we need to discuss
something very vital, and that is how much to buy. When we've gone to the trouble
to look for stocks exhibiting characteristics
that we like, it's easy to fall in love
with those stocks and overcommit to
a single security. And that can dial up the risk. So an individual investor
looking for growth may make a decision in
advance that they will not commit more than a specific
amount of their portfolio to any single stock. For example, in our
demonstration account, we have $70,000. And maybe we decide
that we're not going to allocate more than
5% to any individual security, no matter how much we like it. That can serve a
twofold purpose for us. Number one, it keeps risk
minimized in a single security. The second potential
benefit is that it provides for diversification
of the portfolio. If we're only putting
5% into one stock, it takes 20 stocks to
get a full allocation. So let's make this real. Let's go back to the platform
and place our first trade. So here we are on a now-familiar
stock's profile page with M/I Homes. And we have a stock
that meets all of our fundamental criteria. It's recently
given a buy signal. It's now pulled back. And we're going to go ahead
with our trade just on the fact that it's down at that support
level, in the upward trend, meeting our
fundamental criteria. So to place that
first trade, we're going to go up to the
Trade tab, and we're going to select Stocks and
ETFs from the drop-down menu. For today's example, we're going
to use a market order, which should give us a quick fill. And a final decision that
we might need to make, if using a limit order,
is the time-in-force where we could designate
an order that will remain in force for up to six months. But for our market
order, we're just going to leave that as day. And now, finally, we're ready
to review and place that order. This is obviously where
the excitement level rises. I'm going to take a little
bit of pressure off right now. If this is your
very first trade, it might be a good idea,
just while getting familiar with these processes, to
just buy a single share. So even though we've decided
that we could allocate up to 100 shares to
this position, we're just going to buy one share. So now we're going to come
down and click on Review order. And don't worry, we haven't
made a solid commitment yet. We still have a
minute and a half to review that this is
really what we want to do. You'll notice here on
our review order screen, we have 90 seconds
to place our order. So we can read back to
ourselves that this is really what we want to do. Buying one share of MHO
at the market price, and this is just an order
that's good for the day. This gives us an estimated
cost of the trade. It's a $33.84 stock,
so the cost is $33.84. With some trades, there may
be transaction fees involved, but we're now ready
to place the order. Let's go ahead and send
this one off to market, and we should get very
quickly a confirmation that that order has filled. And we are now the
owners of one share of MHO at a price of $33.82. We've covered what to buy,
when to buy, how much to buy. We've actually even
placed that first trade. Now it's time to talk
about when to sell. There are a few ways that
we might accomplish that. Let's get right
back to our trade. As we go to place
our sell order here, I have to acknowledge that
we've done a lot of work up to this point. And clearly what
the growth investor is hoping for is this
stock will go up in price, and they'll be managing
profits over time. But we have to be realistic. Despite our best
efforts, it's quite possible the stock might
have a different idea, and it could go down. So let's talk about managing
that downside risk first. And as I mentioned,
for some investors, they may just decide,
from my entry point, maybe I have a
sell order in mind to get me back out if this stock
happens to fall, let's say, 10%. And I'm not taking 10%
entirely at random. There's actually a
mathematical process to losses and the difficulty
in recovering from those. For example, let's suppose that
you bought a stock for $100 and then it happened to slide
just 35%, down to about $65. Well, with that
remaining $65, you have to accomplish more
than a 50% profit just to get back to breakeven. So those losses-- the
compounding difficulty of recovering from losses
grows and particularly once you get about past
that 10% threshold. So for our example trade
today, let's put it in a sell order that will get us
out 10% below our entry price. If you recall, we were able
to purchase those shares for $33.82. 10% below that is $3.38. Or in other words,
that takes us down to a sell order price of $30.44. So let's start to fill
out our field here. First of all, we're going
to change the action clearly to a sell order. The quantity has
already filled with 1, but we do want to make
sure that that's correct. Next, we enter our symbol, MHO. So now let's choose
our order type. In this case, we're
going to be using what's known as a stop market order. This is to be used in the
case that the stock is moving in the wrong direction. This means, stop the
trade, I want out. And here we can enter
our threshold price. So 10% below our entry of
33.82 was down at $30.44. We're telling the system, get
us out at $30.44 or lower. There's certainly
the possibility that it could actually
fill at a lower price. What happens when $30.44
is accomplished, if it ever is, it triggers a
market sell order to go to the market,
which means, hey, we're just filled at
whatever the next price is. And that could be a little
bit higher than 30.44. It might be lower than 30.44. Now, our time-in-force, let's
change that to good till canceled. If we don't make
that adjustment, this order would only be good
for a single trading day, So we choose good till canceled. We can set a precise
expiration date or just leave it
at the default. We can set that out to as much
as six months out in time, but we're ready to
place this order. So I'm going to come down
and click on Review order. And once again, we
have that opportunity to make sure this is
really what we want to do. We're selling one
share of MHO, but only if the price happens
to drop to $30.44. That is the activation
price or the stop level. The credit that I might receive
for the sale of those shares at that point, $30.44. And we're ready to
place that order. And now that order
has been submitted, and we'll just have to see
if it ultimately fills. That is to address the
management of the trade if the stock doesn't
perform as expected. However, we've done some work. Hopefully what we're
looking for here is for price to
rise at this point. How does a trader manage profits
in the case of a stock that is performing well? Well, we want to give
that stock room to move, but we also want to stay
ahead of any significant new developments that might change
our minds about continuing ownership of this stock. For example, let's say we
get six months down the road and we've identified a
significant area of support, and then that support is broken. That may be interpreted
by a technician as a signal of pending
bearishness for that stock, and it may be a reason
to exit the trade. So there could be
a technical reason. There might also be
a fundamental reason. Let's say that six
months down the line, the stock is still
performing, and yet there is a significant change
to the management team. Maybe the CEO is replaced,
or maybe a new competitor enters the marketplace. So we just want to
keep our eye on news and new technical
developments in the management of this trade going forward. But in any event, it
may be a good idea for a trader in the
management of that position to establish some routines. Obviously, with MHO, we're
hoping the stock rises. And let's suppose that
it's doing its job. It's climbing to higher
and higher levels. But there is our stop, still
waiting all the way down at $30.44. Well, what we might do
is put it in our calendar to revisit that stop,
see if the price has reached significantly
higher levels, and then move the
stop up to just 10% below those new levels. So we're starting to
manage that downside risk and, conceptually,
managing new profits. And that's it. Those are the basics you need
to place your first stock trade. There's a lot more detail
you can sift through, so don't think this
is all there is to it. Now you're ready to take
things to the next step. As a brand new
stock trader, it can be intimidating and
expensive to gain experience. To get that practice without
any real skin in the game, download thinkorswim from
your TD Ameritrade account. The thinkorswim software
includes practice trading tools called Paper Money. This allows you to trade stocks
under current market conditions without risking real money. TD Ameritrade offers
lots of other resources where you can learn
more about investing. We've put some links in
the description below. Be sure to follow
us on social media, and don't forget to
subscribe and hit the bell to get notified
about new uploads.
