Now comes the fun stuff! Now that you are introduced to all of these different terms, and have had the opportunity to work with your CPM to get the understanding behind them down, it is time to apply what you learned! Practice regardless of where you are at experience wise is important, because not only does it prepare you for what you will see in real life, but it also challenges your brain to think outside the box.
There are
two key ways to practice:
- Stock Journal
- Stock Simulator
Stock Journals were around when stock simulators did not really exist or were just coming into their power. The point of a stock journal is to write down what you bought, at what price, with details, then track how your stock did. It is basically practicing on paper. And, though it is not a real life trade, it allows your brain to expose itself to the concepts your mentor has been working with you to grasp from step #3. I personally learned utilizing a stock journal and later stock simulators, and actually have attached with this post my first ever journal entry and two others for your viewing pleasure.
Stock Simulators are an excellent way to practice and get the swing of the basics behind trading for two reasons: less writing and more applying to real life. Here at the FIO, we have teamed up with investopedia.com to offer multiple investor groups for our members to participate in.
The Silver or Gold Group will most likely be your first groups you join. Your personal mentor will help you get your investopedia.com account set up if you need it, but it really isn't too hard to figure out. (Side note) When making your investopedia.com account, try to remember to make your username the same as your FIO member name, as this will make it easy for the community to recognize you. You can now go to the investopedia.com
site, and register your name. Once you are done then move on down.
I got my investopedia.com account!
Once you are signed in for the first time, take a look around and try to get used to the layout. I have attached a picture of what your main screen will look like and point to what key icons to keep in mind. You need to go though to the information booth for our investor groups, and get yourself joined; here is a link to that information
area. Once you join a group, the "competition" name should appear when you click on "my competitions" (see attached diagram for button location). When you see it under there, you know you have joined successfully
.
Now what Mr. Magic?
Now you make your first trade! Your personal mentor will help you find a stock to buy for your first trade. Remember though that the stock market is only open during the week from 9:30 AM to 4:00 PM!! Don't be expecting to make a trade after the market closes, because it won't be able to happen. Once you and your mentor have found a stock to make your first purchase, follow the instructions to fill out your trade "ticket", and place your order. Wait 20 minutes and your order will be up. Congratulations, you just made your first buy!
The purpose of the first buy is to get you associated with everything you have learned thus far. All the basic terms your mentor has been working with you on now come together in just a few clicks. Find the trading ticket simple to fill out? Enjoy then, because it is also that easy in a live trading account.
Practice, Practice, and when you think you are all set, Practice some more!
Your Mentor will probably help you trade 2 or 3 full rounds (a buy and sell) before moving onto graduating. It will take a few times to really get the hang of it, but isn't that a nice feeling? You started knowing very little about the stock market, and already you are applying basic knowledge to make your first few trades. Managing the money in your account is important, and all the rules that apply in real life apply in the simulator. You can't spend more than you have in your account (unless on margin), and you can loose everything you have
.
Graduating the 5 Step Program
Every CPM will have their own personal requirements to graduate the 5 step program. The best part about it is that there are no grades, and your mentor is there to work with you until you pass! Along being able to make trades on your own successfully, understanding all the basic concepts and terms you have been taught along the way are very important. The next step after graduating is stepping out on your own. We taught you how to swim, but it is up to you to learn more and survive in the open waters! Step #5 will give you some excellent sites to bookmark and use for the future, along with some well known paths that you may follow to enhance your skills. Has your mentor graduated you? If so, move on over to Step 5.
Step #5 - Going Out on Your Own, Graduation
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