Before you read, understand that I have not made any trades yet. With that understood,
Over the past 5 days or so, I have been doing a lot of math and I figured out that it is almost too easy, like free money, a LOT of free money if you trade stocks.
I have been calculating how much it would be to buy penny stocks that are .01 a share @ 20k shares, this = 0, then i factor in scottrade’s per trade commission plus .5% of the principle (because it’s a trade on a stock that’s below .00 a share) which comes out to for the buy and for the sell of the under a dollar share trading (I’m assuming the stock goes up to .12 a share) and of course the standard commission each way buy and sell comes out to 7 total expense by me. Which means the stock would have to be @ .01135 a share before i can break even if i sold all i shares
as I said earlier, if that stock goes up to just ¢.12 a share and i subtract .02 (.01135 rounded to two cents) from what the stock is currently at (.12) and I sell all 20k shares then I would make-clearing all the commission- TWO THOUSAND DOLLARS, like THAT!
that kind of thing happens all the time, there is a plethora of opprtunities to buy and sell like that
BUT ISN’T THIS TOO EASY??????????
the only thing I can think of as to why EVERYONE is not doing it is because I am a student and I live with my parents who support me essentially and I only work parttime which means that all the money I earn can go directly into stocks and savings and not bills.
But my explanation is kind of weak considering how easy it is to do and how incredible of an upside it is.
Now unless I have been doing this math ALL wrong for the past 5 days or so, I NEED TO KNOW what the catch is
I feel like this is waaay too eazee and I need to be assured that everything I said is accuarate and everything really IS that eazy
ya scottrade does, but in addition to the standard per trade, it costs .5% of the principle of what you buy.
the only thing that could ruin my philosphy on the whole thing is if there is a limit to the amount of shares I could buy, that would pretty much kill the idea, if not, and 20k shares is legit, then yes I could do this, I have been looking at a lot of stock trends lately and I am very confident, beyond confident, it’s just what happens.
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Magically Ambitious 14th March 2010
Sadly the problem is not in your math.
The catch three-fold:
1) You have to buy the right stock
2) You have to buy that stock at the right time
3) You have to sell that stock at the right time.
The easiest is usually #1, then #2 becomes exponentially harder, and #3 is harder still.
If you can "easily" do those three things, you will make lots of "easy" money and be the envy of your friends.
Unfortunately, experience shows all three to be quite difficult in real world application.
I do wish you luck, and if you come with a system for figuring out which $0.01 stock is going to be going to $0.12 … PLEASE let me know
rtfm 14th March 2010
How many penny stocks have you been tracking?
How many of them have gone from $0.01 to $0.12, and how many of them have gone from $0.01 to … $0.00?
How do you plan to choose the *one* penny stock that goes up to 12 cents, out of the dozens or hundreds of penny stocks that are available?
(Oh, and does Scott Trade even allow you to purchase penny stocks? I know some of the online brokers don’t.)