My second trade hurt more than my first. The iPhone 6 was announced yesterday. As you can imagine, there will be a lot of other companies profiting from selling parts and services to Apple. This morning $OTIV was on everyone’s radar as they provide some type of NFC service which helps turn the iPhone into a virtual credit card.
Being in the IT industry, I know for sure that anything related to the new iPhone is hot and will get a lot of attention. Because I’m still new to this and don’t want to waste all my money, I bought just 25 shares right when the market opened at $3.94.
Just a few minutes after I purchased the stock, it was already hitting $4.00 a share and above. I placed a sell order at $4.50 a share hoping that all of the morning hype would help me net a profit. Wrong, I fucked up. The stock was going up and down and instead of riding it out, I got scared.
I went to the chat room to see what others were saying about OTIV and wouldn’t you know it, another moderator is telling everyone not to chase this stock as the recent news is just a PR stunt. I panicked and placed a sell order for $4.10 a share. Moments after I did that, the stock jumped up to $4.99 a share.
Today’s lesson, stop putting so much emphasizes on what motherfuckers in the chat room are saying. If I would have had the balls to hold, and not listened to the chat room, I would have sold at $4.50 which was my goal today.
This was a bittersweet trade. It was my first winning trade, but I still lost money on it.
Bought 25 shares @ $3.94 = $98.50
Sold 25 shares @ $4.10 = $102.50
Profit = $4.00
E*Trade fees for this transition = $19.99
In the end I lost $15.99
There is another more important lesson that I just learned. I need to begin figuring these goddam E*Trades commissions into the grand scheme of things. Taking these small ass positions like 25 shares is stupid. Even if I made a dollar a share, after the E*Trade commissions I would of still only made $5.00. I was gambling with $98.50 which I could have easily lost to make a grand total of $5.00.
For those like me that have small accounts, commissions are going to eat away at any real profits. Paying a $20 commission fee for each trade is bullshit. I don’t have the money to open an account with Interactive Brokers just yet. I hear their commission is around $1.00 per trade but you need $10,000 to open an account.
Making money may prove to be harder than I thought.
I can only trade 3 times per week because of the SEC rule that limits traders with less then $25,000 in their account. I think I’m done trading for the day. Hopefully I can find something tomorrow that I can sink my teeth into that will finally provide a solid gain after paying these ridiculously high commissions fees.