I’ve mentioned stocks in my history of trading on the about me page, probably heard me talking about it thru the blog as well. I know I’ve been waiting for this day to come, don’t know about you guys…
My grandparents, both of whom are on that retirement income thing.. from the government, so they have excess money to spare. Decided to give my mom some money to “hold onto” for them, being in their old age and given their generation, I’m not surprised that they’re still sticking by the “keep your money under your bed” mentality (not literally.. but it’s not in the bank). So, whenever they save up an excess amount that they don’t feel safe keeping at home, they give the money to one of their children (5 total).
My mom knowing I’m learning economics and enjoy finance, decided to give the money to me to invest/swing trade. NOTE: I’m using the word INVEST! This money is not mine, I don’t plan to be day-trading OTCBB/PInks, everything will be on the real exchanges. For now, I plan to focus on the TSX, depending on the USD strength and the US economy as a whole defaulting or not. I don’t really want to get into the US stocks with USD, that would be a risk factor to do so right now. But it’s definitely something to think about in the future given the recovery (if ever) since most of the good stocks are on the NYSE/NASDAQ.
The broker that I’ll be using as I’ve used in the past for my own account is Questrade, a Canadian discount brokerage. Commission is 1 cent per share, min. $4.95 per trade, up to a max of $9.95 (commission is capped at $9.95 not the number of shares, otherwise penny stocks would’ve been a fail with 2M+ shares each time). Min balance is $1,000 I believe? That’s not a problem though. Since I’ll be trading big board, most likely commission will be $4.95 (495 shares) because I’m not investing that much.
I’ll be opening a TFSA with them. I’m not sure if the rest of the world have this, but in Canada, TFSA = Tax Free Savings Account. You don’t pay taxes on anything you make in the account, either on savings, dividends, capital gains, etc. It is a registered account, so no margin (I believe?). Most banks offer the TFSA as well, but as you all know, banks charge rediculous commission fees on trades, something like $30-40 per trade. It’s only cheap to trade with the big 5 banks if you have a $100k+ account.
The goal of this project will be just to beat the interest rate if this were to sit in a normal TFSA with a banking institution. Highest rate is 2% I think, my bank (TD) offers 1.4%. I’ve purposely left this till the end, my mom has given me $5,000 to invest with. 2% = $100, that should be fairly easy to beat, even if I’m swing trading conservative stocks. I’m however limited as mentioned previously in that, I won’t be playing US stocks. That’s where the bulk of my knowledge comes from though, I mainly focus on tech stocks like AAPL and NFLX which I’ve previously owned.
The account is already made, the money should get there by the end of the week. The only things that I’m looking at right now for plays are bank stocks. Canadian banks are chartered unlike the US, so the chances they go bankrupt are pretty slim.. compared to the US banks. The price did drop in the 2008 recession, but still alive today. For the most part, the price channels between a set range. So I’ll be aiming to get in low, then flip it at the top. Bank stocks aren’t growth stocks, they do pay out a small dividend as well. Since these will be “investment” trades i.e. longer timeframe, I don’t mind holding longer because the cycle takes a few months to finish.
Aside from that, since I’ll be playing stocks again, I’ll try to post random plays on other stocks as well ontop of what I’m looking at. The FX analysis will still come every week, but I may quit FX since the attention should be focused here and on binaries. The only reason why I started FX was to give myself a firm grasp of the FX markets and how they move, so that I can trade binaries more efficiently. It’s been 2-3 months now since I started in FX, with demo, the 1st live, analysis and the 2nd live account. I’ve progressed quite a bit compared to when I started binaries back last yr in December.
If I decide to quit FX, I will note that on the P/L and I will add stocks onto it as well.