Hey, it's Clay at claytrader.
com, and in this video I wanna show you how to buy a stock in avery non-theoretical way.
I'm gonna put some of myown money on the line here so that you can see how tobuy a stock with an account, and then how that's all gonna look, how the numbers andsuch are gonna function, and that way you can see how to buy stock in a very real-time atmosphere where it's no longer in atextbook or up on a chalkboard or whiteboard or anything like that.
So on that point, this is definitely as hopefully you saw inthe title, a part two.
Now the first part Idid, how to buy a stock.
I'll put a link down belowif you haven't watched it.
I go more so, and I'mjust talking about it from a very theoretical standpoint.
I'm standing in front of a whiteboard, and I'm walking throughthe different order types, and I wanna do just to follow up on what I talked about in that video to show you, like I said.
Now there's no theory.
You're gonna see howthese order types and such play out in the real world of trading.
So with that being saidI am going to assume that you've watched that video and, like I said, ifyou haven't watched it, I'll link it down below inthe description section, but if you don't watch it, then this video I thinkwill still make sense if I do my job right, but regardless I still encourage you.
I think this video willmake that much more sense if you do watch the original video.
Now the first order type Italked about in that video, part one, was a limit order, and remember a limit order is an order.
So I wanna buy that stock, but and there's always a but, and the but is but onlyfor a certain price.
I'm not willing to buyit for whatever price the stock is currently trading for.
So in this situation as I sit here, and let's just create a little story.
So I'm sitting here I'msaying, you know what? For whatever reason, I like AT&T.
Maybe they're my cell phone provider.
So ticker symbol T.
So that's what a ticker symbol is, and that's known as AT&T.
So I want to buy AT&T.
I'm happy with them asa cell phone provider.
I think it's gonna be a good buy.
So I'm interested, but I don't wanna buyfor the current price.
That brings up a question.
Okay, well, what are the current prices? Well, if you are brand new over here, this is what is called level twos, and level twos is showing you what people are willing to buy a stock for and what people are willingto sell a stock for.
So the people that are lookingto buy are known as the bid, and on the left side, these numbers right here show you the bid.
This is what people are currently wanting to buy AT&T stock for.
So right now they arewanting to buy it for $30.
Now it's, now $30.
Did you see how the numbers change? Over here, this is what iscalled the offer or the ask.
I mean this is the pricethe people are willing to sell AT&T for.
So right now people arewilling to sell for $30.
Over here they're willing to buy for 30.
Oh, see (laughs), it's changing.
So again, over here.
These people are looking to buy or sell? If you're saying buy, good job.
Over here, these prices are for people looking to buy or sell? If you're saying sell, good job.
So, again, this is called the bid.
This over here is calledthe ask or the offer.
There's kind of a coupledifferent terms for it, but bid and ask, that's what's going on.
Price people wanna buy, people, and then the price peopleare looking to sell for.
So in within the storyI'm saying, well, yeah.
I wanna buy AT&T, but you know what? I don't wanna buy it for $30.
I wanna buy it.
I think it would be agood value at $29.
Now where you come up with this number? I mean for whatever reasonyou just say you know what? I do want AT&T, but Ionly want it for 29.
So at this point, and let's say you wouldalso have to determine, well, how many shares you want? Well, I want 10 shares.
So down here the way my platform works.
Everybody's platform isdifferent, but my platform, you would say, okay, well, yeah, I want AT&T.
So just AT&T, symbol T, got that.
Got to determine how many shares you want.
So in this situation I want 10 shares.
So I'm gonna change that to 10, and then I've determined, well, I only want it for what? 29.
So right here in price, you would wanna type in the price that you want this stock for.
However, how are wegonna make that happen? Well, over here, this is the order types, and once again, assuming youwatch part one of this series, then you should recognizethat limit right there.
Now you click on that, and there are actually so many different typesof order types out there.
Honestly, I've never even really looked or considered any of these.
I'd probably have todo more research myself to figure out exactlywhat some of these mean, but for, and I'm making up this statistic.
So full disclosure there.
I'd say 95% of the time, you'regonna be looking at either a limit, a market, or a stop, maybe a trailing stop, maybe, maybe, maybe a stop limit, but 95% of the time, a limit, a market order or a stop order.
Those are gonna be thethree primary orders, but in this situation, wewanna do a limit, right? Because the limit order isfor those times where you say I want that, but I'm only willing to pay in our story 29.
So what I would do here is select.
So let's just say that this was actually on a market order right now, but in this situation, I wouldwanna change it to limit.
So over here watch whathappens when I click buy 'cause remember I wanna buy.
So I'd have to click buy.
You're gonna see theorders show up over here, and it's gonna be white, and it's gonna be white because that's telling me that, yes, my order is out there in the market, but nothing has happenedwith it because, well, I mean as of right nowthe price is at $30.
So let me hit buy.
So right there do yousee it down there now? So that part is justtelling you the exact time that I literally put the order in, but ticker symbol AT&T, I wanna buy 10.
See the zero of 10.
That's telling me that, yes, you wanna buy 10 shares, but as of now, you don't have any shares.
You have literally gotten zero of the 10 shares that you want, and then over here it'stelling you the price that I wanna buy for, 29.
90, and it's telling me thatI'm looking to buy those.
So that is how a limit orderworks, and at this point, I will not be gettingany shares unless what? Unless this actually drops down to $29.
So as of now, nothing is pulled back.
I just have not gottenany of those shares.
So let's just say within this story, I'm like you know what? I don't know, maybethis was a bad decision.
Maybe AT&T, this thing'sgonna be going up really high.
Maybe it'll never go down to 29.
I just want in.
I want in, and I don't care what price.
I just want in right now.
Now what kind of videowould that be were you? There is no but.
You are no longer saying I want in, but.
You're just saying I want in, and I want in at any price.
Well, thinking back to part one, hopefully you're saying, well, that would be known as a market order where there is no but.
You just want in at any price.
So, again, everything else is the same.
I still want AT&T, 10 shares.
However, now it doesn't matter.
So I'm gonna change this to market.
So watch what happens when I click market.
Notice how this number goes away.
Why did that number go away? Because I am willing to pay anything.
I am doing a market order, meaning whatever the marketis willing to sell me for.
So as of now, quiz question.
If I were to hit buy rightnow, what price would I get? If you're saying, well, Clayif you hit buy right now because there are peoplewilling to sell at 30.
01, you would get 10 shares at 30.
Correct, very good.
You have an understandingof how this is working.
Now what about now? If I had it? Well, never mind, itchanged too fast on me.
So let's see if it can can change again.
Now, there, ah (laughs)! There we go, two! All right, so now what? If you're saying, well, at thispoint, you would get $30.
02, exactly, because that's whatthe market's willing to sell.
People are willing to selltheir shares at 30.
So at this point, I'mlike yeah, you know what? I don't think it's going down to 29.
I wanna get in right now.
So at this point, becauseit's a market order, I'm gonna get in no matter what.
So this order over here isno longer gonna be white.
It's gonna go to green automatically.
Green on my platform represents, hey, you have the shares that you want, and then down here, you'regonna show or you're gonna see T show up as a positionbecause that's what occurs.
When you have a position right here, that's what's gonna show up, and down here you're gonnasee a 10 under the position.
Now all these other ones fromwhat I traded on the day, you see zeros by all thesebecause at one point, I did have shares, but nowI've gotten rid of them.
So my position is zero, but I've still tradedand made money from them, but in this situation, you're gonna see thatchange down there too, or you're gonna see the position show up.
So here, uh-oh, now it's at 30.
So now I got to pay a penny more, but, like I said, I don't care.
I'm gonna get in, hit buy, and notice.
So let's go through things here.
I now own, so my positionof AT&T, 10 shares.
My price is 30.
Uh-oh, right now I'm actually losing 10 cents in those shares.
So that right there is my profit and loss.
So when it's red, I'm losing money.
If it goes to green thatmean I am making some money, but as of right now, I am losing10 cents on that position.
So that is the market order.
It means it just got me in no matter what.
Now had I kept it at 29.
90, and let's just say theprice all of a sudden would have went down to $29.
85, it doesn't matter thatit went down to 29.
I'd've still gotten my shares at 29.
Because, well, that's whatI was willing to buy for, but now because I did the market order.
Uh-oh, am I gonna bemaking some money here? Keep an eye on that number right there.
In fact, if we can see some green there that means I'm making some money.
Right now I'm at breakeven.
See how it's zero? I mean I'm not making any money.
I'm not losing any money.
I'm just at breakeven.
There we go.
So there's the number to watch.
Just continue to watch that number.
Let's see if I can make somemoney in the trade here, but in all seriousness, I'm not gonna.
It's 10 share.
So very, very little is at risk, but to carry on with thisstory, let's just say that, okay, well, I've learned, I've heard that you wanna be goodwith risk management, and you wanna manage risk.
That's what trading is all about, and you're absolutely right.
So I need to manage some riskand part of managing risk is, well, I need to makesure that I don't like lose all my money in this trade.
So the question then becomes, okay, well, how do I manage risk? Where do I need to get out at? And I'm just making upthis number randomly, but let's just say youdetermine that you know what? If this thing hits 29.
If this thing, if the priceof AT&T goes down to $29.
95, I better get out for whatever reason.
Within my plan, within my strategy if it hits that level, I need to get out.
So at that point, you wouldwanna what stop the trade.
Now this is why I'm not a, and that's why I dolike it's called a stop.
A lot of people use astop loss, which is true because most times you'reusing them to stop a loss, but in all actuality youcould be in the green, You could be making money, and you could still put in a stop, and it wouldn't necessarilybe stopping a loss anymore.
It would just be stoppingthe trade as a whole.
So stop and a stop loss, they're the same thing, and a stop loss like that that just comes from the whole idea thatat the very beginning, yes, you are putting in a stop loss because you're gonna stopa loss at a situation, but let's just say thiswere to go up to $35, and I put in a stop, at that point, it would no longer be to stop any loss because I would be so much in the green.
I'd be making so much money on it, but it would just be tostop the trade as a whole, but in this situation, like I said, all right, well, I wanna put in a stopbecause I wanna get out if this thing goes downto what number did I say? Well, 29.
So at 29.
95, I would wanna sell.
I would wanna get rid of my shares.
So in this situation I'mnot gonna hit by anymore because I'm looking to sell.
So AT&T, 10 shares.
My stop, notice howchanged, it's at 29.
So I'm gonna go down there and hit sell.
Now notice what happened over here.
Here's my order out there.
It's telling me that I'mlooking to sell at 29.
95 with the stop.
Why is it white? Well, because nothing hashappened with the order.
Why is nothing happened with the order? Well, because right now theprice is still at $30.
We're not even anywhere close to 29.
So that's why it's white, and it'll remain whiteas long as the price stays up above 29.
95, and that is how the stop is working.
The stop is just sayingI will stop the trade for whatever reason at 29.
Now another thing you coulddo is you could come here and change this to a stoplimit, and at that point, you could say, well, I'm onlywilling to stop the trade, but into a certain price.
So for example, 29.
90, let's just say like, well, it's okay to sell at 29.
95, but I'm not willing to sellfor anything less than 29.
So in this situation, again, let me repeat that because this is wherethings get a little fuzzy, you're saying I would liketo ideally stop the trade at 29.
95, but I am not willingto sell for anything less.
My limit would be 29.
Maybe I'm, and I'm really strugglingto think of a time where you would wanna do a order like this because these can reallyget you in trouble, but that is what a stoplimit is, is an order where you're just saying you'rewilling to stop the trade, but if it hits a certain price, then you're no longerwilling to stop the trade, which sounds confusing, and it is confusing, and that's why I'm struggling.
I'm not quite sure why somebody would ever want use that type of order.
I don't know, in the comments section, maybe you're way smarter than I am, why would somebody everwanna use a stop limit? I get it, well, there could beslippage and stuff like that, but at the same point, that's true, but I mean you could reallytake a much bigger loss because if somethinggoes way far below you, but like I said, I do wanna, and I'm not trying to confuse you, but I get that questionquite a bit, is, okay, what's the difference betweena stop and then a stop limit? So a stop, that's gonna be the normal one, and usually those are gonnabe a stop market order.
So, and it doesn't say markethere, it says stop limit, but a stop market means you want out, and you want out at any price, and those are the types oforders that you're gonna be using probably, like I said, a made up statistic, but I would say in probably95% of your trades, when you say you wanna get out, when you say you wanna stop the trade, you mean just, yeah, I wantout of the trade at any price, and that's gonna be what you want.
So that would be a stop market.
Now, like I said, my platform doesn't say a stock market, but when I do put it in, notice how above the order type it does say market right there, meaning, again, I want out and Iwant out at any price, and I don't mean to repeatmyself too much in that regard, but, like I said, thoseones are kind of sketchy, but at the core, what you'regonna be using the most is a limit, again, that'sthe one with the I wanna buy, but you're gonna be usinga market, I just want in.
I don't care the price.
Let me in now, now, now.
Give me, give me, give me.
I just want in, and then the stop, meaning just get me out of the trade.
So actually it's coming down here.
So we might see it.
So, again, if it sits, so I'llstall here for a little bit, but if this number goes down to 29.
95, then this is going, this orderdown here is gonna change from green, or excuse me, from white to green, and I'm gonna have, soand I'm gonna have a loss because right now I'm down30 cents, uh-oh, 40 cents.
This is not a good tradefor me, I'm down 40 cents.
So you know what I'm gonna dois I'm gonna pause the video, and if it looks like thisthing is gonna creep down and maybe even hit the stop-loss, so we can just see how allthis operates automatically, or else, why don't I look, why don't I just do this? Why I don't say, no, no, no.
I don't think I wanna do 29.
I wanna do 29.
So if this thing drops byone more penny I want out.
So I'm coming to come overhere, change this to 98.
So now we have 98 rightthere, still a stop.
So now I wanna sell there.
So now if this thing hits, andnow it goes up by two cents.
All right, I'm trying to getstopped out here, and I can't.
So now I'm saying, okay, well, not.
I better, I wanna change it up to 99, and now it's at 31 or 30.
So let's just stay right there.
So again, now if it goes down and hits 30, that's gonna go from white to green, and I'm gonna be out.
So let's watch the price.
So if this, now it goes to.
So here, let me just change it up to here.
Now let me go up to 30.
So, again, a if that dropnumber over here on the bid, drops to 30.
(laughs) Okay, let's go to 30.
02, now 03.
There we are, all right.
So out there at 30.
I put it in there, and that number just happened to be then the number where it was.
So it went down, and ultimately I lost10 cents on the trade.
So that's what you canalso do with the stop.
You can just slowly adjustit higher and higher, and depending on your strategy and depending on how it all works, but at the core, that'show you buy a stock.
That's how you enter in.
It depends what your plan is, what your emotions are, orwhat your mindset is, right? If you're willing to buy, however, there's the but, then that's where you wannause a limit order as you saw.
If you wanna buy something, and you just want in, and you don't care what price, that is where you woulduse a market order.
So that's how you buy stock.
That's how it works in the real world, and hopefully this complimentedand did a very nice or helped out with the part one with me in front of the whiteboard there, and if you have any questions or comments or additional things, let me know down below.
I will say, Clay, what isthis platform you're using? What is this platform you're using? I'll in the description box, I will put a link to myresource page at the site, and that'll walk you throughall the different tools and platforms and stuff that I'm using.
So that way, 'cause I knowthat'll pop up quite a bit, but all in all any otherquestions or anything like that, please let me know.
If you enjoyed these videos, let me know.
I'm willing to do them formore of my, 'cause I realize I am in front of the chalkboard and the white board quite a bit, and those are more theoretical videos, but if you enjoy these videos where you kind of just seethings play out like this, then let me know, and Ican do some more of these real-life type videos whereI'm actually putting in orders, and this is all real money, and you can kind of see how this stuff playsout in the real world.
So, like I said, leave me thosedown in the comment section.
Hit that like button ifyou enjoyed the video, and also check out the channel as a whole, and if you enjoy what you see, then I'd love to have you as a subscriber.
So hit that subscribe button, but if nothing else, like Isaid, hit that like button, and hopefully this canhelp you out in terms of what all this looks likein the real world of trading.
First off, thanks so much forwatching the entire video.
Real quick before yougo, I wanna invite you to a live webinar, webclass, training, workshop, online event, whatever you wanna call it, but it will be me live revealingto you what I've discovered that has allowed me to transform myself from being an employeeto being my own boss, including how I had only one losing day out of 73 days in total.
I'm gonna cover threekeys that have helped me unlock profitable consistencywithin the markets.
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Even if you can't make the live session, please still sign upas it will be recorded, and you can go back and watch the replay that I will send you.
Click the image on the screen or click the link downin the description box.
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If you have any questions, let me know.
If not, I'll be seeing you soon.