Investing in the Stock Market - The Naked Trader Made me Do it - Stevie Tee

Investing in the Stock Market – WTF Just happened?

Stock MarketOk, so there I was idly minding my own business a couple of weeks ago, looking at bank statements and issuing tuts of disapproval over the amount of interest my affiliate revenue was making, when purely by chance, a conversation with my brother-in-law got me thinking about the stock market. He’s been doing really well, he say’s got into BP last year when they were cheap, he says, made a few grand he says.

Which got me thinking….

Now I’m a cautious kind of person by nature so this isn’t something I entered into lightly, which as it turns out is just as well, but nevertheless I invested £8.88 in the Naked Trader and set up a dummy portfolio last weekend. To be clear since, this was to be my first dip into the stock market I didn’t actually buy the shares, but I was very strict – buying a realistic number of shares at a realistic price, spending about £1000 which would be the amount I would spend if I were to try investing for real. Having read the Naked Trader from Cover to Cover I did my research, set a stop loss (a price at which I would ruthlessly sell the shares if it ever went that low) and target price (the price at which I would take the profits and run).

Monday wasn’t too bad, I was only a few pounds down, and to be honest nothing much happened until Thursday – when the share price went into meltdown and my stop loss well and truly kicked in. The shares where sold at 520 which overall resulted in a paper loss of £55. However, by the end of the day this was looking like a profit after the price reach a low of 478 sometime on Friday morning. It has since recovered, a little, but it is currently still below my stop loss price.

Lessons learned? As it happens the price of the shares I bought was probably too high anyway, I was not able to buy enough of them to generate a significant profit, so I won’t invest in them next time round. And if you are thinking about dabbling in the stock market for the first time, do so with caution (read the Naked Trader for a laymans guide to trading – it really is a good book for newbies) oh, and pay attention to the news that the USA might about to default on its debt, and there’s trouble brewing in the Eurozone, cos as it turns out that’s quite important….

I haven’t seen my brother-in-law for a couple of days. I do hope he’s alright.

Posted under: Miscellaneous

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