Perverting Common Wisdom (A stock market tale)

"Perverting common wisdom, Nephew, is the mark of all great conspiracies" - Baron Vladimir Harkonnen (Dune, Frank Herbet)

It's an accepted premise that to make money you need to spend money. And to spend money you need to have money. So by syllogism, to make money you need to have money. This applies to the stock market quite sensibly, and most people agree that you should start an investment account with $2,000 or else you simply won't be able to make the aggregate gains required to counter commission fees. Aggregate gains is very important, because it is really how you are to play the game correctly. Most stocks will not jump several hundred dollars, or for that matter several dozen dollars, in anything resembling a sensible period of time to hold a stock. Not without some major news coming out of that company.  So you're looking to make a few cents to a few bucks on hundreds of shares.

But what if you don't have this $2,000 to invest, is it still possible to make money? With, say, $700? If you are careful, subtle, and lucky can you make not-enough into enough?
To this end I'm starting a new blogspot site:  A Stock Market Tale
Hello, Readers. I'd like to play a game.

First, my rules:

• I can only use my initial investment of $700, and any money earned from this initial investment
• As I only have $700 and want to make the absolute most of it, I cannot pay for any service beyond my broker.  Everything I use for my research will have to be free.  No trials either, that's just lamesauce.
• Every purchase will be my own decision, I will not overtly take tips.  I will be required to justify each decision based on clear and rational criteria.  This isn't to say I might not ask my friends for opinions on things, but I will never ask "What should I buy?" or accept "Hey, you should buy ____, I think it'll go big."
• Sometimes I will have to stay in cash, but if I haven't made a move in 2 weeks I will declare game over.  Temporarily, at least.
• If I lose too much I will declare defeat.

Now your rules: (otherwise known as a disclaimer)

• I have absolutely no idea what I am doing.  I am in no way implying that I have developed some super secret methods or intuition.  You will not, under any circumstances, consider what I say as any form of advice.  If I write that I am doing something it is in the interest of disclosure.  If you make any decisions based on what I say, that is your own fault and I cannot be held responsible because this is not advice.
• What I am doing I am doing as my own personal interest.  It is obviously not my job and outside of any profits I make I am not being paid for any of it.  If AdSense on the side of the official blog make any money, it's a plus but it is not the point.
• I am not doing this as an endorsement of any official broker or any companies I might invest in.  I do not intend to reflect onto my employer or any related entity.  
• Please understand that I'm just a dude writing about stocks with no formal training or inside information.

The plan of attack:


Since I have a limited amount of money to invest I'm going to be looking exclusively at stocks priced at less than $10 a share.  This is the only way I can make a net profit, any higher and I won't make enough aggregated over the number of shares to amount to counter commissions.

Since I have no news information other than what is freely available, and most of the companies I'll be looking at just don't make news, I will be relying purely on technical analysis to pick my stocks.  I will also be mitigating my risks using stop loss orders to sell my positions if they drop too far past a level based solely upon an analysis of the chart.

As I buy and sell positions I will sporadically update the new site (A Stock Market Tale) with details of how I'm doing, and also why I'm moving the way I've decided to.  Hopefully it'll be interesting.

--PXA