The Basics

Responsible trading is not gambling. Some people will say that you are throwing your money away. That brokers will take your money. You can’t beat Wall Street. That this and that. Fine, don’t even try to trade.

There is also a lot of hype out there claiming how you could get rich quickly by trading. Or one of the latest – get on the Bitcoin wagon. These are ALL scams and they WILL take your money. Guaranteed.

The fact of the matter is simply that properly done, and with a bit of work trading your own portfolio is done all the time by thousands of retired people. I would venture to say most at least beats the average return. Some take a portion of their RSSP or 401(K) and self-direct it. Buying and selling stocks.

If done right, and with some knowledge and discipline it is possible to at least break 10% a year. If you treat it as a business and really get into it – a 20-30% return is possible. But NO, getting rich quick is not where it is at. Yes, you can grow your capital, have some fun doing it and maybe take some money out.

As a retired person, it is imperative to protect capital. Only trade with money you can lose if you just can’t get it right. And learn the basics:

  • Never risk more than 3-4% of capital on one trade
  • ALWAYS have stops in place
  • Don’t be greedy – take your share of the profitable trade and move on
  • Research the market, learn some strategies that are proven
  • In my opinion, use both fundamental and chart analysis to decide what to trade

Trading stocks is the most safe in my experience. The price move relatively slowly so you have time to analyze where the stock stands and where it might be going.