<p><img src="https://static2.businessinsider.com/image/60d0b3013093db00197023db-2017/Ricky Gutierrez.jpeg" border="0" alt="Ricky Gutierrez in black T-Shirt on grayish background" data-mce-source="Ricky Gutierrez" data-mce-caption="Ricky Gutierrez is an investing and trading influencer with almost 1 million followers on YouTube."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Ricky Gutierrez first dabbled in trading when he was 17 years old, using money he earned mainly from buying and selling phones on Craigslist, and from creating and selling fingerboards, which are mini skateboards for your fingers.</p><p>"My parents weren't doing very well, so it encouraged me to not have to have them provide for me, just to make it a little bit easier for them," Gutierrez said.</p><p>His early experience consisted of trading <a href="https://www.businessinsider.com/what-is-a-small-cap-stock" target="_blank" rel="noopener">small-cap</a> and <a href="https://www.businessinsider.com/how-to-invest-in-penny-stocks" target="_blank" rel="noopener">penny stock</a>s, a practice that resulted in the loss of his first $2,500 investment, he told Insider.</p><p>"One of the things that I try to preach the most is there's a thing called paper trading or simulation trading. [I] try to encourage people to do that first, it's free," Gutierrez said. "It allows you to play with fake money and it's because I think people learn very early on that risky stocks might be really good plays for a short period of time, but they're not as consistent."</p><p>The rough start didn't deter himpersistence combined with the lessons he learned along the way led Gutierrez to develop an approach that has a strong emphasis on risk mitigation and profit-taking. </p><p>"If you're going to invest four years to try to get a degree or time and time again to try to learn how to do a job, why are you in such a rush to jump into the market and to try and make a quick buck when, you know, it has such a low success rate," Gutierrez said.</p><p>Gutierrez told Insider he initially learned how to trade by perusing websites and joining online chat groups. Then in 2015, he started his own YouTube channel called <a href="https://www.youtube.com/c/RickyGutierrezz/featured" target="_blank" rel="noopener">Techbud Solutions</a>, where he discusses his own trades, teaches trading for beginners, and talks about hot stocks such as <a href="https://markets.businessinsider.com/stocks/amc-stock">AMC</a>.</p><p>Today, Gutierrez is 26 years old and has been trading stocks full-time for over five years. His YouTube channel has amassed almost 1 million subscribers, and he sells an online course that includes his live-trading sessions. </p><p>In an exclusive interview with Insider, Gutierrez shared the top three strategies he uses when trading.</p><h2><strong>Don't fully invest in a stock </strong></h2><p>Because he's taken his fair share of losses, Gutierrez says position size is important. He told Insider he invests just enough that it motivates him to keep an active eye on his holdings, but not enough that he gets emotional if the stock goes down in price.</p><p>"Ignore the stocks that I'm trading. I don't care if [people] trade what it is that I have. That's never my goal. My thing is always just the concept of managing position size, taking a light position at the beginning and averaging up into it has been one of the most positive takeaways that I've ever shared," he said.</p><p>For Gutierrez, a "light position" translates to only investing 8% to 12% of his available funds in each stock. This allows him to be a dispassionate seller, meaning he can quickly cut his losses if a trade goes bad without getting overly emotional.</p><p>Gutierrez adds that the amount invested should be a personal decision and based on the amount a <a href="https://www.businessinsider.com/difference-between-risk-tolerance-vs-risk-capacity-investing-2020-10" target="_blank" rel="noopener">trader can tolerate losing</a>.</p><p>He takes additional measures to mitigate his losses, including a <a href="https://www.businessinsider.com/designing-a-mechanical-trading-system-part-ii-2011-10" target="_blank" rel="noopener">setting stop-loss order</a>, which is an order to sell a stock at a specified price, and a trailing stop loss order, a sell order that is not set at a fixed price, but rather adjusts to the stock's rising price.</p><p>Gutierrez says he isn't afraid to take profits, even if it means selling too soon and missing out on maximum gains.</p><p>"I would rather be someone that sells too early than doesn't sell at all and then rides it all the way back down," he said.</p><h2><strong>Buy the dips incrementally</strong></h2><p>Limiting his investment amount and taking profits also means Gutierrez has funds that he can use to purchase more shares when the stock price takes a dip.</p><p>"What I like to do is at the overbought levels, I like to reduce my position size. You never have to sell your entire position, but I like to be light enough, meaning I've sold enough shares that when the market does pull back a little bit, I'm able to load up on it, buy a little bit more of the different stocks that I cherry-pick," Gutierrez said.</p><p>He uses the 180-day chart to predict future patterns. While past performance doesn't recommend future outcomes, it helps give him an idea of what he may expect.</p><p>His technical analysis is based on the three stages of a reversal. First is rejection, which is when a stock is overbought and begins to dip, followed by consolidation, which is when the pattern has likely hit its low and remains within a limited range indicating a support level. Finally he looks for confirmation of an uptrend, which signals a recovery, and is also indicated by dips that are no longer as low as its predecessor.</p><p>Gutierrez begins by adding an initial amount to his position during the consolidation period and gradually increases his shares once there's confirmation of an uptrend. He refers to this as a relatively more conservative approach to buying once during the dip.</p><h2><strong>Stick to blue-chip stocks </strong></h2><p>Gutierrez is primarily focused on <a href="https://www.businessinsider.com/swing-trading-in-two-sentences-2011-6" target="_blank" rel="noopener">swing trading</a> <a href="https://www.businessinsider.com/what-are-blue-chip-stocks" target="_blank" rel="noopener">blue-chip stocks</a>, which are large companies that have a strong reputation, making them relatively less risky and more likely to recover from a dip. He also trades ETFs, such as the <a href="https://markets.businessinsider.com/etfs/proshares-ultrapro-qqq-us74347x8314" target="_blank" rel="noopener">TQQQ</a>.</p><p>Some of the stocks he's currently trading are <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a>, <a href="https://markets.businessinsider.com/stocks/pton-stock">Peloton</a>, and <a href="https://markets.businessinsider.com/stocks/twtr-stock">Twitter</a>. These picks are based on his belief the companies will perform well over a long period of time. Gutierrez doesn't get into any of the company's financials and says each trader should focus on companies they personally believe in.</p><p>He also adds that his strategy doesn't always pay off. He told Insider he's currently taking losses on <a href="https://markets.businessinsider.com/stocks/t-stock">AT&T</a> after the stock price took a dip and has yet to recover.</p><p>Gutierrez also admitted to Insider that the one stock he did not follow his own advice on was Tesla, where he holds a portion that far surpasses his 10% average and has incurred a large loss. He put the fault on his emotional attachment to the company, mainly touting its electric vehicle technology. He continues to hold his position, believing the stock will recover. </p><p><a href="https://www.businessinsider.com/stock-strategies-investing-influencer-1-million-youtube-subscribers-strategies-trading-2021-6#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/where-run-hide-earthquake-occurs-2017-6">Where you should go to stay safe during an earthquake</a></p>
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