Ever since I hit the scene…
I’ve been getting flooded with emails and DMs from aspiring traders…
I try my best to respond, but given my hectic travel schedule and the overflowing volume of questions…
I’ve decided to answer the 5 questions I get asked constantly.
Are you curious?
Table of Contents
#1 How much money do I need to start?
I have some good news and bad news.
First, the good news.
Most of my +30 millionaire students started with a small amount of money.
Now, the bad news.
Most of them didn’t make money in their first or second year.
You see, starting with larger amounts of money means you’ll likely lose more in the beginning. Learning the catalysts, patterns, and strategies I teach takes time.
I know my strengths and weaknesses. And I stay in my lane.
If you’re a newbie trader, you won’t know your strengths and weaknesses because you don’t have enough experience.
It takes time to learn risk management, deal with the emotions of trading, and develop the patience and discipline to succeed.
That’s why you want to start small, learn, and lose tiny bits of money initially.
Instead of asking how much I need to start with, you should ask how much I am willing to lose in year one.
#2 Why Don’t More People Trade Penny Stocks?
There are a few reasons why I think most people avoid penny stocks.
First, we’ve glamourized investing in America. The idea of set-it-and-forget-it investing is very appealing.
And if you have a high-income job, then investing in an index fund like the S&P 500 and earning a 10% return each year makes a lot of sense.
However, most Americans are living paycheck to paycheck and are not high-earners. They’ll have to take matters into their own hands if they want to achieve their financial goals.
Penny stock trading offers incredible opportunities. But you’ll rarely hear about them in the financial media because most of the attention is focused on investors.
The financial institutions need your money so they can collect their fat fees. They want you to believe that you can’t do it yourself.
In addition, the majority of penny stocks are crappy companies.
They are not investable.
That means your best chance at making money with penny stocks is trading. And as you probably know, most people who try to trade lose money and fail.
But I believe penny stocks have an advantage over blue-chip stocks. For example, there are dozens of analysts who cover Apple. How can you and I compete against an army of analysts whose sole job is to know the ins and outs of a company?
However, the majority of penny stocks have no analyst coverage. And most people who trade them are unsophisticated, degenerate gamblers. I’d rather compete against them, wouldn’t you?
#3 Aren’t Penny Stocks All Scams?
I’m not a legal professional, but I will tell you my philosophy here.
I expect the worst out of these companies. That’s why I look at them as TRADES ONLY. I don’t buy into any of the hype.
Many of these companies don’t make money and are bad businesses.
But I’ve also found that most people running these companies aren’t that smart.
And as I said earlier, I would rather concentrate on a catalyst like a press release or a piece of news than compete with an army of analysts who know the inside and out of a company better than me.
#4 How Long Until I Make $1 Million Dollars?
The reality is very few people will ever reach $1 million dollars in trading profits.
However, that doesn’t mean it will work for you.
Some people don’t have the time or patience to endure 1-2 years of losing money before they can potentially see results.
That’s why I would not place any monetary goals in the beginning. Instead, you should have process-oriented goals.
Think about this, my two top students, Tim Grittani and Jack Kellogg, made a combined -$2,600 in their first year of trading. They likely would have given up if they had focused on monetary goals in year one. Instead, they focused on learning the process, and both have gone on to make 8 figures each.
Another reason why you shouldn’t have monetary goals is that you can’t predict the market. For example, 2020 was a wild year for trading, with plenty of opportunities. However, 2023 has been slow thus far.
That’s why you should focus on things you can control.
#5 What Are The Most Common Mistakes?
Most newbie traders have irrational expectations. As humans, we overestimate what we can do in a year and underestimate what we can do over time.
Most newbies want results right away. These irrational expectations allow fear and greed to overrun them.
Penny stocks are built around hype. Newbies want that homerun trade, and fall in love with the idea of taking $1,000 and turning it into $50,000 to $100,000 on one trade.
While I’ve had some massive percentage gain wins in my career. The majority of my profits have come from hitting singles and doubles.
(Bonus #6) Where Can I Learn More?
If you want to learn more from me, then I invite you to check out my:
- YouTube Channel
- Interviews: Jordan Belfort, Chat With Traders, Tom Bilyeu, Lewis Howes, Brad Lea TV , Ryan Pineda, and Steve Harvey.