Practice Trading
Paper trading is a term defined as a trade recorded and tracked on paper, but not using actual money in a brokerage account. The purpose of these types of trades is so you get a better understanding and learning experience on how the Channeling Stock concept works.
“SINCE I SIGNED UP WITH YOU FOLKS I HAVE HAD 23 WINS WITH ONLY ONE LOSS PAPER TRADING!!!! I THINK I’M READY!!! THANKS A BUNCH!!
We think Derek is probably ready also.
An important point when tracking your investment is to use more than just the closing price of a given stock for the day. You should get accustomed to checking on the daily price fluctuation of the stock you are tracking. Chart services should allow you visualize the many different prices that your stock was trading at for the day. Did your stock reach your GTC price during the day? If so, consider it sold and update your practice trading form. What about your stop loss price? Use the same concept. Track your gains and losses and begin committing your cash only if you have had a minimum of at least 5 profitable trades in a row or are profitable 80% of the time on a minimum of ten practice trades.
Be Patient and make sure you have all the Basic Concepts fully understood. The hardest step to successfully trading in Channeling Stocks is patience. Your first instinct is to make money and make it now. Stick to the strategies given and don’t let greed get in the way. Be patient, take a little at a time, and in the long run you can be a much more successful investor.
Access the Practice Trading Worksheet
How the Form Works
Ticker Symbol
A company abbreviation using letters to designate a particular stock for trading transactions. For the example listed, the Perfumania Inc. ticker symbol is PRFM.
Buy Date
The date a given stock was purchased. In the example it is September 1st.
Buying Price
The price a given stock was purchased at. In the example it is 3 1/8, or $3.125 per share.
Number of Shares
The total number of shares bought of a given stock. For the example listed, we are paper trading a purchase of 1000 shares.
Total Investment
The buying price multiplied by the number of shares bought, plus commissions. Commissions are not being used in the example because rates vary, but you should include all commissions into the equation.
GTC
“Good ‘Til Canceled”, a stock market term used to designate the price at which an investor wants to purchase or sell a stock when the price is met.
Stop Loss Order
A Limit Order placed to protect account value from a significant decline in the price of the stock.
Sell Date
The date a given stock was sold. In the example, the stock was sold on September 15th.
Sell Price
The price at which a given stock was sold. It was 3 5/8, or $3.625 per share in our example.