Do you have an account you consider to be “Small?” Say you have $10,000; how do you trade it successfully?
Hey everyone, this is Pat Walker from Mission Winners. Today, I want to have a conversation about trading with a smaller account, a question that comes up quite often. Recently, someone asked me how to invest when you only have about $10,000, especially when you also have other responsibilities like kids. Here are some key points and examples to help you navigate this.
First off, don’t go all in on one stock or use margin aggressively. Instead, slow and steady wins the race. Limit your losses and spread your investments to manage risk. For a $10,000 account, don’t put more than a quarter of your money into a single stock.
Example 1: ACLS
ACLS was a stock we looked at. Suppose you bought it around $25 a share, with $2,500. As it went up, you could sell a bit to lock in profits. When it starts losing momentum, like dropping below the 20-day moving average, you sell more. This way, you make money gradually without taking huge risks.
Example 2: SolarEdge
SolarEdge was another good one. Buying it around $28 per share, even with just 80 shares, could lead to a nice profit as it moves up. Sell some as it gains, and hold on to some until it starts losing momentum. This method helps you make money while protecting your initial investment.
Example 3: Square
We bought Square around $29, and it went up to $49. Instead of putting all your money in, invest a conservative portion. Even if you sell at different price points, you make a good profit. Again, the key is not putting everything in one stock.
Example 4: Teradyne
Teradyne was another stock that showed gains from $37 to $42. It’s not always about buying high-priced stocks; you can make good returns with moderately priced ones too. As your account grows, gradually increase the amount you invest in each stock.
Example 5: ESNT
Finally, ESNT was bought around $40 and went up to $45. Selling some shares when it gains helps lock in profits. Even small gains add up over time.
Key Takeaways
- Diversify: Don’t put all your money into one stock. Spread it out to manage risk.
- Limit Losses: Always have a plan to cut your losses.
- Gradual Growth: Aim for steady growth rather than quick, risky gains.
- Sell in Strength: Sell some shares when the stock is doing well to lock in profits.
- Adapt as You Grow: As your account grows, adjust the amount you invest in each stock accordingly.
This isn’t about getting rich quick; it’s about smart, steady growth. Keep chipping away and let your money grow over time. Always remember to limit your losses and manage your risk. Thanks for listening, and I hope this helps you on your investing journey.
