One of my visitors, Tim, asked me to write about my experiences in the stock market on a previous blog post comment. I held off this post for a while because it required images being captured to show the detail of how I chose the stocks.

Disclaimer: This post is to help others know what mistakes I made so they won’t make the same mistakes. If you or anyone who uses my information to prepare yourself for the stock market, please be advised that I am not responsible for any wins or loses of any currency of any kind. You buy and sell stocks at your own risk.

Choosing a stock for my portfolio was hard. I didn’t know which stocks would go up or down. Fortunately I was given the knowledge to analyze the trend of a company’s history so I can make a smart financial decision. The reason I gained small amount of money and lost alot is because I was impatient and I didnt look at the trend as often as I should.

I learned a good trend with my experience; when gas prices go up stocks fall, when gas prices go down stocks rises.

I made a mistake and I jumped in doing daily trades. Daily trades are for those who sits in front of the computer all day, which I wasn’t. Daily trades consists of penny stocks, which are stocks priced under a dollar or so; around ~$0.01 - $0.98. If you bought penny stocks then you have to buy it in high quantities so your marginal revenue will be equal or greater than your marginal costs. The only costs are the trading fee; I was with Ameritrade, now TD Ameritrade, and they charged $10.99 for each traded at that time.

I looked at the newspaper around my area, which is the Atlanta Journal Constitution, and in the market section they have a list of all the stocks and symbols and what price they closed within the previous day. I chose my stocks from there. I don’t remember what the stocks were exactly but I knew that the stocks I chose would go up over time. I bought my stocks when they were $0.29 per share and over a month or two the stocks went up to $0.45 per share. So if you bought 10000 shares for $0.29/share you would be investing $2900 plus $10 for the trading fee. When the stocks went up to $0.45/share your $2900 would be $4500 so, your profit would be $1600 minus the $20 for the two trading fee. Your net revenue, the final revenue after fees, would be $1580.

How did I predict which stocks went up?
This is something the big boys won’t show you. And you’re definately not going to learn this in your financial classes in your business college.
Go to http://finance.yahoo.com and in the Get Quotes type in RHWC.OB symbol, just for an example. I don’t recommend you buy any stocks with an extension like .OB after their names because they have something risky involved in it. So, I’m using RHWC.OB as an example but I don’t recommend you buy it.

A = Technical Analysis Link
B = current price per share for the stock
C = the symbol of the stock next to the company’s name

Click on Technical Analysis on the left and the following screen below should come up. Click on “3m” the Range, squared in a red box. Then click on “10″, “20″, “50″ in the Moving Ave., squared in a green box.

After clicking on the numbers the page should look like the screen shot below. The chart squared in pink should have a black, green, and a red line added to it. The lines represent the trend of the 10 day, 20 day, and 50 day average of the stock. If a stock has all of those lines going upward then the stock is good enough to be bought and you can expect the stock’s price to rise in the coming weeks. But if any of those lines are leveled or pointed downwards then don’t buy.

NOTE: The chances of using this method to make some profit is NOT 100%. It’s more like 60%-70%. Remember the stock merket is risky and if your not willing to lose money then don’t go into it.

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