CANSLIM, $500, IBD

Once I establish my stock market investing routine, I'm going to take the CANSLIM strategy, deposit $500 into a trading account and use the IBD to see if I can replicate what William O'Neil did with his investment club. He says that you can start small and while I know Chris Perruna would be disappointed in me for not using position sizing, I'm going to do this to get my feet wet with real money in the market. In O'Neil's case, he was able to do quite well. Hopefully, we can too. If not, we'll throw another $500 bucks in.

The first thing I want to do though is set up a screening and watch list management strategy. Over the next few weeks, I will start to work on that if I get time. While a stock market simulator can teach you the mechanics of stock trading, it can't bring the emotion to the equation that you need to trade in real time.

I know that a simulator is a lot like a video game. It's easy to manipulate if you know where the game is week and there's nothing really on the line. If you make a mistake, you don't have to pay for it with real dollars. This makes you think differently. Your goal then should be to use the simulator to get your routine established and start investing real money as soon as you do.

This important transition will help you become a better investor sooner. The market is being manipulated all of the time by the big money and the sooner you feel it for real, the better. I know that a friend of mine has been investing in options and he has been quite irked at some of the upgrades and downgrades of some of the options he has been playing. He feels like Wall Street has an alert set up that tells them when he puts his money in the market. Whatever he buys goes down almost immediately. We had a good laugh about it, but that's the kind of information you get from trading for real.

That doesn't mean that you shouldn't continue refining your routine. Quite the contrary. Use what you learn to improve upon it. Learn by doing, not by simulating.