Would you rather……..?

The Entry Points

by Stevie Swai

Have you ever played the game “Would you rather…?” ?

It asks fun and thought provoking questions like: Would you rather lose all of your money and valuables or all of the pictures you have ever taken? Would you rather be able to see 10 minutes into your own future or 10 minutes into the future of anyone but yourself? Would you rather go to jail for 4 years for something you didn’t do or get away with something horrible you did but always live in fear of being caught? Would you rather be poor but help people or become incredibly rich by hurting people?

You get the idea. So I have have a little game to play with you. It starts with me giving you $5000 of play money representing the savings account of your family. You will need to make this money grow. Now the first thing to ask yourself is what would be a reasonable annual return. Most folks would say they would expect a 12% return which is certainly reasonable. But really–12%? A year?

That’s not a reasonable return for us here at The Entry Points–maybe 12% a month, but certainly NOT a year. So on a $5000 account, you will need to make your account grow to $5600 in one month. Can you do that? That’s $150/wk or $30/day. It doesn’t seem so unreasonable or unattainable when you break it down, now does it? Start understanding how this can add up over time, especially by being patient to wait for the best setups. The ones which we can identify.

I just want to really get you thinking about trading your own account and how it’s possible to grow it so much more than 12% a year. So how are you going to do this? Well first of all, using this website and getting the maximum potential out of it is a start.

Okay, so let’s get back to the game. With your $5000, you can, for example, decide to open a trading account. I’m just throwing out ideas here. But with this account, you will NOT be able to be a pattern daytrader because of the restrictions for accounts with a balance under $25,000 so you will be limited to no more than 3 day trades over a rolling 5 day period. This should not be a problem because, remember, you’re not looking to hit a big jackpot and double your account in a day. You simply need to make 12% for the month.

So how will you do this? Well like I said earlier, you can start by studying the material on this site. Then, in the evenings, you can prepare, as Trader Scott and I do faithfully every evening, by researching stocks that performed extremely well during the day. And looking for stocks that might be starting to emerge, maybe with signs of strength showing up. Also looking at stocks which we save on our watchlist. They may be starting to set up again. So sticking to the lower priced stocks will be more practical as they have great potential for better gains with a smaller investment. Take a look at the symbols which will be reporting earnings, and read up on the latest news and press releases. Small stocks can make big moves on the slightest news which is why we like trading them. The biggest thing to keep in mind is that you’re not looking to invest in a company. We often make great trades with crappy companies and ugly long-term charts. We just want to find opportunities. You simply want to get in and get out with some profit to add up to $600.

Watching, waiting and not over trading is key. Here’s a little example of one of my trades from Friday, June 23. The symbol is DCTH. Scott had talked about the moves this stock had made over the past 15 days or so. I did not trade it during the big moves, I simply kept it in my awareness, keeping an eye on it. I was watching its downtrend and looking for a bounce, which it did after lunchtime. I pulled up the 30 minute chart and when I saw that nice long green volume bar, I made my move because it was moving. Click on the charts for a larger view.

I bought 10,000 shares for $1354.95 and sold them 6 minutes later at a 16% profit making $210.00. So now are you seeing that making that 12% a month just may be possible? Think about it–there’s $5000 in your play money account. You only need to make $150 this week to start you to your goal of $600. If you had made this trade, you would have 33% of it already.

Unfortunately, novices start into this business only seeing BIG dollar signs. Big mistake. Huge mistake, in fact. When I first started trading, I would have never done this trade successfully simply because I would have been looking for more profit, and held onto it waiting for it to go higher and higher. The thing about it is that it just might. But it might not and I’m no longer willing to risk losing anything anymore. Little stocks like these can reverse in an instant. They get pumped up sometimes through great news, only to tank the next day on a bad earnings report. I choose to have a string of small successes which add up, keeping my risk low by keeping a small portion of money in the market for a very short time. But this is just how I choose to trade. Everyone has  their own comfort zone and must find what works best.

The following charts are of 2 other trades I did on Friday. Again, these trades were made very mindfully after watching movements of these symbols for days. MBRX was not a day trade; I had held it overnight. ICLD was a daytrade.

Below are my gains for Friday. As you can see, they are simply small trades that add up. But the real reason I’m sharing them with you is to make a point that none of those trades were huge investments. No more than $1900 was invested in any trade. We want to show you that big gains can be made on small positions.

So let’s conclude our game:

Would you rather make 12% a year on your money OR 12% a month?

Would you rather take your financial future into your own hands by investing in yourself OR live life with limitations?

Would you rather look forward to Friday because your work week sucked OR be dreaming of Monday because Monday starts the week of making lots of money?

Keep checking in. We’ll play this again.

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