Swing Trading With $500 | Podcast Episode #197

0:07
Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex ever-changing, world of Finance, learn what it means to trade, profitably and consistently managing risk, avoiding the pitfalls of trading. And most importantly, to let those winners run wild, you can succeed at the stock market and I’m ready to show you how, hey, everybody, this is Ryan.

0:31
Mallory with Swing Trading the Stock Market and I’ve got a good episode for you. Guys, today, we’re going to talk about trading with an account under $500. Can you start trading with just five hundred dollars or even less? We’re going to talk about that here and more. The guy’s name that I’m going to use today.

0:48
It’s not going to be a floater red nickname. It’s going to be by request. He asks to go by the name of mr. Amps, not sure what the backstory is on mr. Amp, but I can go with he says, hey Ryan. I just started listening to the show three weeks ago and I’m going back and forth between older and newer.

1:05
I’ve learned a lot from you and what seems to be a short amount of time. My question is this what are your thoughts for those? Like me who are starting to trade with the smaller amount of money, say less than $500. Also for those with even less money to start with let’s say $100 or should those starting with less money?

1:23
Wait, until they can save up to a certain threshold? In order to have enough for risk management, I can understand why people get into penny stocks to begin with, especially while trading with just a little bit of money. I’ve done so myself in the beginning. I’ve also discovered, how volatile and even Shady penny stocks can be, though I’m certainly avoiding them from now on even though I’m lucky enough to have gained some money from them, hope you can help.

1:47
Thanks for all the great content mr. Amps mr. Amps. Thank you for that question. And yes to get you started on this question. Yes I do think you can start trading with five hundred dollars in your account. Do I think that was the case just a couple years ago know?

2:04
And I’m going to get into that and more. But first, what am I drinking here? Well, I was at Sam’s Club. The other day, I picked up some stuff that they had. It was one of these limited editions that they had on the shelves, not something. They carry everyday its Makers Mark and its Makers, Mark Private Selection at that sweet bourbon dreams 2021 bourbon Heritage Edition.

2:27
So I had to get it man. I was kind of excited about it was like a 56 dollar bottle at Sam’s. I don’t know what it retails at like a total. Mine or somewhere else. But usually it’s like ten to Fifteen dollars more in the color of it, man. It’s like a really nice Amber Brown.

2:43
I mean, just beautiful. Beautiful colors. Not like some of those pissed colors. I’ve been dealing with of late from like the Irish in the Canadian whiskies, but this, this color here is its real beautiful and the smell. It’s strong. I mean you could smell it as soon as you open up the bottle, it’s got some real good, strong fruity smells to it.

3:01
I like everything about it so far and when I I taste it really, really smooth. It’s a rich silky. Smooth flavor. It’s like honey on the tongue really that good and then you got this finish that’s like hot peppery.

3:17
But I like it. I mean it’s not too much like it’s it takes you a little bit to the edge there but it pulls you right back in to let you know it’s going to be. All right the proof is 111, alcohol content, 55.5%. This is a good one guys. I mean, I am really surprised at how good I thought It would be pretty good, but I didn’t think it was gonna be this good.

3:37
So it’s at Sam’s Club. If you can find it, that’s great. I’m going to give it an eight point, four out of ten. That’s a strong number to give any bird. I mean, that’s good. I like I could drink this stuff every night. It is in every day sipper if you can get it for the right price now that they’re going to start selling it you know on secondary at 90 or 100 dollars yet.

3:55
It’s kind of hard to do that with an everyday super because it’s so expensive but this is really really good. It’s bursting with flavor burst and I tell you.

4:11
Get them at Sam’s Club, really, really good. And don’t be one of those people who go there and buy all of them and save some for the rest of us. All right now, mr. Ants, he wants to know about these $500 smackers. Can you start trading with just five hundred dollars?

4:27
Yes, you can. The reason why? And why that’s changed from a Of years ago, not a couple years ago. I’d say you know what maybe have like ten thousand dollars at least. If you’re going to start trading, maybe even 15,000 the reason why that changes. Because the zero commissions, I didn’t even realize at the time, how big of a game changer?

4:44
That was, when all your major brokerages, overnight went straight to 0. It’s kind of annoying to because, you think to yourself, you guys could have done this all along and you chose not to your just milking us for every dime we were worth. I mean it was crazy how quickly they changed. I mean, once one did it, they all I think was Charles Schwab that did it at first and then you had E-Trade.

5:04
And then you had, TD Ameritrade you had Fidelity. I mean, they all went that direction and what makes it even easier now, is that these brokerages, realize how much can be made off of these small accounts. They want the 500 dollar accounts because they realized they add up and so what they’re doing.

5:20
Now in order to offer you as many opportunities to buy the most amount of or different kinds of stocks to her to have the option, to buy them as many different kinds of stocks as possible. They’re letting you buy fractional shares. That was another thing they really didn’t do. I think there was a company back in the day, I don’t even know if they still exist.

5:35
It’s called share Builder. Not to be confused with share, planner, share Builder, and I think they would let you buy some fractional shares. I’m not positive on that, but I thought that they did any case. Fractional Shares are good too, because it doesn’t let you get caught up. And okay, I’m training with a 500 dollar account.

5:51
I can’t trade Amazon. Well, you know, with some of these companies that are offering or these brokerages, that are offering the fractional shares. Yes, you can and which ones are they? Well, I did a little bit of John I’ve never had a by a fractional share, so I wasn’t quite familiar with that, but I did my research, and from what I found, we will does it interactive brokers.

6:08
Does it Fidelity? Does it? And Charles Schwab does it? And there’s one other company to, but I’m not even going to give them the time of day to even mention who they are. Anybody? That’s listen to this podcast for any length of time, knows who I’m talking about but I am not going to give them the credit, they don’t deserve it.

6:23
But check out those companies that I mentioned to you and start using some of these fractional shares to because they do help you. In the sense that one you’re not getting charged. Aged for the trades and to you don’t have to worry about whether or not a stock is too expensive. We get so caught up in a hate this comment that I get from so many Traders they say or I can only buy one share of it.

6:43
Who cares. How many shares you can buy of a stock? I really don’t get I can’t tell you my portfolio right now. How many shares I own of any stock because it’s irrelevant to me. The only thing I care about is how much money might allocating to each trait. If that means, I buy 10 shares of a stock or 10 million, shares of a stock, I don’t care.

7:00
I’ve noticed with the, she The crypto that everybody’s all hung up about how many shares they have like, oh I have fourteen point four million Shiva coins and they think that that makes them special somehow guys. It’s trading at what like, .000, whatever. Sure you can buy.

7:15
I’m, you can take one penny and have a lot of shares. So, don’t get caught up on another shirt. Cheers, don’t mean anything. It really means how much money or Capital that you have allocated to that particular trait. So, if you can only buy one who cares, again, it’s about managing risk and not about how many shares are trading with.

7:32
Because in the end whether you have one share or 1,000 shares of a stock, a 10% move is going to be a ten percent move on the capital that you allocate to that trade again, it’s about the capital that you’re allocating to the trade, not the number of shares that you own. So, don’t think of stocks as being too expensive, for being too cheap because that is not determined or defined by how much a Stock’s share prices and also, what’s not expensive and I forgot to mention Beginning of the show.

8:01
So I’ll mention it. Here is swingtradingthestockmarket.com. You’re going to get all my market research. When you go to swingtradingthestockmarket.com every day, you’re going to get my list of daily setups that I am following for potential traits. You’re also going to get my weekly wash list, you’re going to get each and every day, multiple charts.

8:18
That I find most intriguing to me based off at the current market session. On top of that, you’re going to get weekly updates on all the things stocks, Microsoft and Tesla. Plus you’re going to get updates on the S&P 500, and NASDAQ, 100, and Russell 2000.

8:35
So, check that out at swingtradingthestockmarket.com, I’d also like to convey to you, too. That it’s important to ask yourself what happens if I lose the $500 that I start investment with hookahs, let’s admit it, if your trade with $500, you don’t have a lot of access to Capital. Now there may be some people that say Hey I got ten million dollars in the bank, I’m not really comfortable trading with a million dollars of it or anything, so I’m going to start off with $500.

8:58
I think that might be the exception to the rule. Rule. But I would say, most of the time you don’t have a lot of access to Capital, so if you were to lose that money or even lose $100 of it, how would you react that?

9:16
I ask that, because I go back to when I first started trading again, fresh out of college. I didn’t have much money money. I just bought a house for myself. I pretty much put everything I own into the down payment, and I had a little bit of money in the account. It was like three or four hundred dollars, I started trading with that.

9:34
And I realize, you know, I’m not making a lot of money in the stock market doing this way you could. Remember at this time I was paying 1499 portrayed that means 1499 to get in 1499 to get out. It was expensive. I think that was with TD Ameritrade if I remember correctly.

9:51
So that really ate into my trade? That’s why I say it’s like back then it was not worth trading with just a few hundred dollars. But what I did is I took some money that I had stashed away for a rainy day and I really worked hard to save. It was about a thousand dollars, put it into my Trading account and I bought like the next day man, I was, I was ready to go.

10:07
I didn’t care what the market was doing. Where we near the top. Or were you got your a bottom? It didn’t matter to me, I bought a whole bunch of different stocks, it was like five in total. I go to a meeting, everything was fine before I went to the meeting, but went to this meeting and I came back out of the meeting.

10:24
I rushed to the computer and I look at it in this, stocks are all trading lower. Now, I’m at work at this time. Okay. All my stocks were trading lower. I panic, I get mad. I throw House on the ground. I’d probably even throw it on there. I think I winged it across the room. It broke into a million pieces.

10:39
I’m panicking. I want to get out of the trade. I can’t get out of the trade. I just broke my mouse, so now I got to go running down to the IT department, with this mouse. That’s like been broken. A million pieces come up with some great excuse as to why it’s in a million pieces and ask for a new mouse.

10:55
I gotta go run all the way back up to my office. Remember, I’m on the third floor. You’re here, it’s– down in like the basement. I’m having to run back up the stairs. I’m panicking. I feel like this money that I worked the past year to save is just going all down the tubes looking back, it wasn’t that big of a deal.

11:13
But at the time it was very real to me and I get the mouse installed and I sell everything. And why did I do that? Was because I couldn’t comprehend or I couldn’t Envision a scenario where I would be able to lose that money and even contemplate it.

11:30
That’s the bigger problem and even contemplate, what happens if I lose that money or a portion of that money. And so by having not contemplated it, I was blindsided. When the market sold all my stocks off. As a result, I’m taking big losses that I didn’t anticipate. I just thought I was going to make money because I bought a stock, so you need to ask yourself that.

11:49
Okay? So then if you’re okay, all right. I might lose some money here because the stock market is inherently filled with risk, then? Yes, you need to start thinking about position sizes. My going, To put 10% portray and look, if you’re trained with $500, ten percent can be $50 on a trade.

12:06
Yeah, you can do fractional shares but I would look at it from a standpoint where the say I’m training with a five hundred thousand dollar account, am I going to be comfortable with the position size of 50,000 or 100,000? And really what I’m trying to get at here is practice trading your $500 like it was five million dollars or five hundred thousand dollars.

12:27
Trade it. Like it’s real serious money because when you do that, you’re forming habits, that are going to help you when you do start trading with real serious money. When you’re managing the risk manage the risk like you’re trading with serious money, because what that’s going to end up doing is helping you to develop a an approach to trading an approach to managing risk and approach to managing reward.

12:57
I get that, it’s not fun. If you put a hundred dollars down on a stock or $50 down on a stock and you make 10% on that $50. You okay. You made five bucks but ask yourself. This, why are you getting into trading? Are you getting in a trading to get rich, which is what most people get into trading for.

13:15
And that’s why they can’t accept or incorporate these tactics and strategies that I’m telling you about, they’re getting into it to get rich to make a lot of money. Or are you trying to become a good swing Trader or a day trader, whatever time frame that you’re working with.

13:33
I’m a swing Trader. So, This is Swing trading the stock market. So let’s just say, swing trade. Are you trying to become a good swing? Because your answer should be yes. And if it’s that, then good trades are not going to be defined by how much money you make on the tray. It’s not about turning the $500 into ten million dollars overnight in.

13:51
A lot of people think that they’re going to do that, that’s why people are buying Sheba right now. Your perspective has to be about being a good Trader, a good Steward of the money because what you’re able to do with a little will go, a long ways in determining and what you’re able to do with a lot. And yes, you could still grow.

14:07
Your account was Zero commissions, you can He’ll grow the account and if you’re making five dollars on a fifty dollar trade good, that’s a great trade man. Don’t get hung up on the fact that you only made five dollars. I get it, it’s not a lot but again you’re trying to become a good swing Trader. And if you’re just here to try to get richer going to lose the money, that’s why most people lose because they’re focused on how much money am I going to make in the stock market?

14:28
Instead of becoming a good Trader who’s using good risk principles managing the reward managing the position sizes, that’s what you got to do, that’s what it’s about. Discipline, not letting losses get carried away. And it’s very easy. When you’re trading with the 500 dollar account to say, okay, the stock that I have $50 in, it just went down 20%, I’m down ten bucks, big, whoop.

14:50
Okay, that’s like a going out to Chipotle’s but you can’t look at it that way, you got to look at it. Okay, am I managing the risk? My managing the reward did I. I’m taking a 20% loss on the trade that I go into the trade thinking that I was going to make at least two x that like 40% or three two one at 60% more than likely that was never a possibility because most trades don’t give you 40 and 60%.

15:15
Yes, some do but most will not. So it would tell me there. If you got a 50 dollar trade and you lose $10 on that trade, you’re probably not managing the risk, right? Because you feel like it’s just ten dollars whatever but don’t look at it like that. Yes, it’s easy to put that money back into the account.

15:33
You can go sell a Pokemon card or whatever on eBay. Stick it back in. Account, it’s like the Lost never happened. I get that. Okay, but it’s not about that again. It’s about making good consistent decisions as it pertains to risk, reward and position sizes.

15:51
And notice how I’m not really focusing so much on the stock picks because stock picks are irrelevant. If you don’t do the other things, remember, if you’re starting off and you only trade with $100 or $500, you’re wanting to be good stewards of that money do well with a little so that you can be blessed.

16:08
With a lot one day and guys stay away from the penny stocks. How many rich people do you know, getting into penny stocks that are not just pumping them to you guys not much. And usually those people go to jail penny stocks, they appeal to people with not a lot of capital because again, they think that they’re buying a lot of shares in something.

16:26
When ultimately, what they’re most likely going to do is just lose everything that they just put into the stock market, and it’s going to frustrate you in. You’re going to quit, stay away from the penny, stocks. It’s like the wild west out there there is A single penny stock strategy, stock or approach to Penny, stocking that I would ever trust for long-term capital Improvement.

16:49
And if you think, well, maybe if I can get lucky on one or two and then just go to Las Vegas, man. At least you a fun. You’ll probably get a free cocktail or two out of it, but don’t squander it on penny stocks. So, wrapping it up here, treat 500 dollar account, like, it’s a 500,000 dollar account.

17:04
Don’t focus on how much money you’re making on a trade. If you make 10%, On a fifty dollar, trade good, don’t focus on the fact that it’s only five dollars look at brokerages. That offer fractional trading again, there’s a number of them out there. You got Weeble, interactive brokers Fidelity Schwab, and another that I won’t mention because I don’t like them.

17:24
Ask yourself to what is your goal as a Trader? Is it to make money or is it to be a good swing Trader? My goal is to be a good swing Trader and that’s what yours should be as well and stay away from penny stocks guys. Don’t go that route. You enjoyed this episode I encourage you to subscribe to this podcast, particularly on Apple podcast.

17:42
Leave a good review. That helps me out. Immensely helps me to continue to grow the audience. You guys are awesome. Check out swingtradingthestockmarket.com and keep sending me your question. ryan@shareplanner.com. I do read them all some of you guys don’t think I do but I do read them on. I want to be able to help you guys as much as possible.

17:59
Thank you. God bless. Thanks for listening to my podcast. Swing trading the stock market. I like to encourage you to join me in this SharePlanner Trading Block, where I navigate the stock market. Each day with Traders from around the world with your membership, you will get a 7-Day trial and access to my trading room including alerts via text email and WhatsApp.

18:19
So go ahead, sign up by going to shareplanner.com trading block, that’s www.shareplanner.com/trading-block. And follow me on SharePlanner’s, Twitter, Instagram and Facebook where I provide I’d unique market and trading information every day. If you have any questions, please feel free to email me at ryan@shareplanner.com all the best to you and I look forward to trading with you soon.