#WCW: Rachel Fox
The first time I saw Rachel Fox was when she was interviewed on CNBC. She was adorable and smart and was totally smitten. What was this cute little fox (pun intended) doing on business news at 16 (she recently turned 17)? Oh, she was talking about day trading. Wait, she was talking about day trading?!
Rachel’s Top 5 Things Stock Traders Should Never Do:
Thing not to do #1 – Never take a stock tip. This is true whether you are making a quick trade, or a slow, long-term investment. Why? Because your timing may be different then when the ‘tipper’ gets into and out of the stock. Trust your own research and judgment. The sooner you do, the more you’ll understand how everything works and the better choice you will make.
The one time I bought what someone ‘suggested’ I buy, I lost my shirt… thousands of dollars. I bought several shares at $2/share. They told me the stock was definitely going to $10/share and today it trades for a quarter of a penny/share. It’s okay to laugh, but be sure to laugh AND learn.
Thing not to do #2 – Do not start trading with real money without first trying it out in a virtual (paper) trading account, with fake money. This rule is not hard and fast, but it is a strong recommendation. You will be so much more comfortable when you trade with real money if you trade with fake money first because questions will come up and you will not know everything. When you hesitate for a second and are trading virtually, it’s no big deal, even if you lose some money. When you hesitate for a second and real money is at stake, then you could lose a lot of money.
Thing not to do #3 – Do not get emotionally attached to a company whose stock you trade or invest in. This is especially true if you are making a quick stock trade based on technical indicators (past stock prices used to see probable future price patterns) because you should only be focusing on price or other movements to make a trade. It’s somewhat true for investments as well since you should invest in stocks that you think will appreciate in price for one reason or another, but not for the reason that you ‘love’ the company.
Thing not to do #4 – Never watch your stock’s price constantly after you made your purchase. It will drive you insane. Choose your price at which you will sell or buy to cover (if you sell short) and either set those actions up to occur automatically or watch your stock some, but not too much, to implement that manually.
Thing not to do #5 – Do not put all your money into one stock. Do not even get close. You probably already know how important it is to diversify your portfolio. You may want to diversify by have some stock trades, some stock investments, and maybe putting some money into options, currency, or other assets. You may also choose automatic diversification by purchasing mutual funds or exchange traded funds (ETFs). Whatever you choose, do not put all your money in one investment. If it tanks for whatever reason, you will lose everything.
My 3 takeaway lessons from Rachel:
1. Age really is just a number.
2. Interested in starting something? Just do it already.
3. You can have pathways in your career that don’t necessarily seem to connect, but you can make it so.