Realistically Profit from Trading Stock with $300 Initial Investment

How much could a teenager realistically profit from trading stock?… The initial investment is $300. The answer is “not much”. I am assuming you will put the money in solid companies and not penny stocks (avoid these). Over a year’s time of trading, if you have managed to preserve your initial investment of $300, you have done quite well.

But let’s say you hit it big. Your stock doubles! Just remember that your skill had little to do with this and more to do with random variation in the market. This will keep your mind sober for the next trade.

 

Emotions are your worst enemy because they will mislead you on each trade. Keep them in check, recognize them for what they are and maybe you will manage to minimize losses.

That said, $300 is severely undercapitalized. Transaction costs are going to eat into your capital and limit your trading choices. Better to start by paper trading and investing that money in yourself and your education until you have a clue about the market.

 

I recommend reading the following books. These books will help you to start to think like a trader and realize what you are getting yourself into:

1) “Reminiscences of a Stock Operator” by Edwin Lefevre

2) “Art of War” by Sun Tzu (Not a trading book but an old book on rules of war and how to protect yourself from being outsmarted and defeated by your enemies)

3) “The Trading Methodologies of W.D. Gann” by Hima Reddy

4) “Time Compression Trading: Exploiting Multiple Time Frames in Zero Sum Markets” by Jason Alan Jankovsky

5) “The Game in Wall Street” by Hoyle

Forget about profit and focus on learning.  The money will come if you take  learning seriously.