# Newbie that is currently trading



## Nh55 (16 November 2013)

Hey guys,

I currently hold shares in different companies. I sold and made a loss not long ago, I'm in profit with some companies, loss with others. I have come to realize I don't know enough. I don't regret losing money, just makes me just want to learn more quicker.

Just a few questions.

Could someone link me or explain to me why market capital is important and what it means? how to evaluate it before buying into a company.

Any good links on different chart patterns and meanings? for example.. I've seen the term cup and handle, want to get more in-depth knowledge onto how to read and assess charts properly.

Anything else I should be looking into for basic knowledge for the market?

Cheers.


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## darkhorse70 (16 November 2013)

Hey NH. I think market capital refers to how big the company is total $ wise. The more it is the bigger the company is. I think you calculate it through total balance sheet worth. Not sure or maybe total worth of shares. To your qs on identifying chart patterns
 etc you can start by reading books. That and it takes alot of experience and even then nuthings promised haha. Thats my noobie advice. GL


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## darkhorse70 (16 November 2013)

oh yea and market capital is important for alot of reasons. Some exchanges have certain cap size limits,  i guess sm. all cap companies have bigger potential and risk and bigger market cap companies (should) be safer. Well thats what i think haha


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## burglar (16 November 2013)

Nh55 said:


> ...  why market capital is important and what it means? how to evaluate it before buying into a company ...



I like Investopedia.
Although it is American, I find it is neither opinion nor BS.

http://www.investopedia.com/terms/m/marketcapitalization.asp

On its own, Market cap is a very small part of the puzzle with which to measure a company.
You will come across many more, but it is a good place to start.


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## Nh55 (16 November 2013)

Could you please list in dot points other factors so I know what to research.


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## burglar (16 November 2013)

Nh55 said:


> Could you please list in dot points other factors so I know what to research.




Here is a good place to start:
https://www.aussiestockforums.com/forums/showthread.php?t=26679


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## Joules MM1 (16 November 2013)

Nh55 said:


> .... just want to learn more quicker.
> 
> Just a few questions.




how about you tell us what it is you want to learn, rather, what are the current, real, tangible hurdles you face.....that means, create questions rather than getting spoon-fed stuff....when you think of the questions you're asking from a how does-that-work what's-making-price-move-like who's-making-price-move-like-that point of view....

the difference between you asking/enquiring "more quicker" versus being handed a bowl of knowledge soup "more quicker" is a whole different ball game....learning to think thru the trade process by actually thinking thru each step and asking each step of the way gives you options.....a bowl of soup is the process of learning and un-learning and wastes a lot of time because it's someone else bowl not yours....

..... ideas


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## burglar (16 November 2013)

Joules MM1 said:


> ... it's someone else bowl not yours ...




Joewels, You said a mouthful, ...
Musta been alphabet soup 'cos you looking pretty smart! :


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## Joules MM1 (16 November 2013)

burglar said:


> Joewels, You said a mouthful, ...
> Musta been alphabet soup 'cos you looking pretty smart! :





i see, by the spelling, you've long ago eaten some of yours, eh


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## Joules MM1 (16 November 2013)

burglar said:


> Joewels, You said a mouthful, ...
> Musta been alphabet soup 'cos you looking pretty smart! :




i used to chat with the london trader, smartest guy.......he would constantly ask me the next step question like "so what makes this occur?" and " when were you thinking this might happen"

i spent a lot of time replying "err.....erm......well....what i saw is...." 

and he'd say, " youre almost there..." and rather than just handing me an answer he'd ask another question till i got an a-ha.....and then he'd say "so, what is likely to happen now?" and i'd have to discover what the next question to be answered is....and answer it myself

even tho he had a plethora of advice, he wouldnt give anything away unless i could articulate that i understood what was in front of me......it's vastly different to painting by numbers....


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## burglar (16 November 2013)

Joules MM1 said:


> i see, by the spelling, you've long ago eaten some of yours, eh




I was trying to say it in the nicest possible way.
Not enough emoticons here!

Let me retrace. 
Nice to have a book title if you are searching for a book.
Nice to have a big brother if you want to learn trading.

Give the newbie a break!


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## Joules MM1 (16 November 2013)

burglar said:


> Give the newbie a break!




lol .....my first index trades i'd say that outloud......guess what the other guy on the other side of trade said? 

nothing, he/she/it just took my dosh ......

there's nothing nice about donating dosh to someone elses account.......haha

i enjoy receiving it tho


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## Nh55 (16 November 2013)

Joules MM1 said:


> how about you tell us what it is you want to learn, rather, what are the current, real, tangible hurdles you face.




Every now and then I've seen a SP that are going from 0.001 - 0.005 go up massively in one day, obviously because any movement at a increase of a price usually means 25%+. I'm under the assumption that a company announcement will have movement but I'm wondering if high volumes of trade itself can cause a price increase. 

Just one of the things I've noticed. 

Cheers.


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## burglar (16 November 2013)

Joules MM1 said:


> ... it's vastly different to painting by numbers....




Agree with you, I do!

But he didn't actually ask which stock should he buy, 
(like many Uni-student-wannabe-stockbrokers do)! 
I actually thought it was a fair question!!


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## burglar (16 November 2013)

Nh55 said:


> Every now and then I've seen a SP that are going from 0.001 - 0.005 go up massively in one day, obviously because any movement at a increase of a price usually means 25%+. I'm under the assumption that a company announcement will have movement but I'm wondering if high volumes of trade itself can cause a price increase.
> 
> Just one of the things I've noticed.
> 
> Cheers.




Its nice to fantasize about winning a motza on a penny-dreadful!

But please start with something safer, until you learn the ropes!


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## Joules MM1 (16 November 2013)

burglar said:


> Agree with you, I do!
> 
> But he didn't actually ask which stock should he buy,
> (like many Uni-student-wannabe-stockbrokers do)!
> I actually thought it was a fair qwestion!!




it's a fair question when the question is concise, specifically framed to a specific step.....how a trader then creates a technique to give themself an option is the key....simply reading books and going to tutorials is just not good enough.....those things cannot give constructive experience.....but a tutor who can sit beside the trader and force the process of thought, that's different.....

any tutorial and book, is much like teaching someone to sum up a linear event and take actions on it.....much like most people do every day in most walks of life, but, in most walks of life there isnt a sentient account taking away your money.....they are not restricted by a books frame work or a tutorial guideline......

trading is closer to rugby, a shoulder fake ....

here's an example, trading a ladder, long, volume on the bid disappears, sell? no, not necessarily......what else is occuring, what time of day, who else is setting up their game?,...... lack of volume doesnt indicate anything other than lack-of-volume....learning context and relative size/action wont come from a book.....

and the game, the nuances are different for each player


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## burglar (16 November 2013)

Nh55 said:


> ... I've seen the term cup and handle, want to get more in-depth knowledge onto how to read and assess charts properly ...




trading pattern cup and handle


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## Joules MM1 (16 November 2013)

Nh55 said:


> Every now and then I've seen a SP that are going from 0.001 - 0.005 go up massively in one day, obviously because any movement at a increase of a price usually means 25%+. I'm under the assumption that a company announcement will have movement but I'm wondering if high volumes of trade itself can cause a price increase.
> 
> Just one of the things I've noticed.
> 
> Cheers.




and high vols cause the inverse, too..... 

i think you may benefit from doing some basic study on what an auction actually is....what drives people too an auction......


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## Nh55 (16 November 2013)

Thank you all for you're responses if I have any more question's I'll post them up here. 

Cheers.


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## Joules MM1 (16 November 2013)

burglar said:


> trading pattern cup and handle




 noooooooooaaaaaaaaahhhhhhhh :1zhelp:

right now the only cup n handle req'd is for drinking tea.....

sheesh


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## burglar (16 November 2013)

Joules MM1 said:


> noooooooooaaaaaaaaahhhhhhhh :1zhelp:
> 
> right now the only cup n handle req'd is for drinking tea.....
> 
> sheesh



@ Joules
Nice to see you again.
Where have you been?


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## Nh55 (16 November 2013)

Joules MM1 said:


> and high vols cause the inverse, too.....
> 
> i think you may benefit from doing some basic study on what an auction actually is....what drives people too an auction......




I'm asking more so what factors may change a share price, just an example of one of the things I've seen.. If the whole volume of trades in the company is a positive or negative reflection on the SP.. without any company announcements. 

Cheers.


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## burglar (16 November 2013)

Nh55 said:


> I'm asking more so what factors may change a share price, just an example of one of the things I've seen.. If the whole volume of trades in the company is a positive or negative reflection on the SP.. without any company announcements.
> 
> Cheers.




One of the biggest drivers of share price is the direction of the market.

I would say "all boats rise with the tide"
But some clever-clogs will say "not all the boats"


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## burglar (16 November 2013)

Nh55 said:


> I'm asking more so what factors may change a share price, just an example of one of the things I've seen.. If the whole volume of trades in the company is a positive or negative reflection on the SP.. without any company announcements.
> 
> Cheers.




There are two camps (at least); one investing (herbivores) one trading (predators).
Learn about both before you decide which you would rather be.

When you understand both camps, you will know why **** happens.


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## Joules MM1 (16 November 2013)

Nh55 said:


> I'm asking more so what factors may change a share price, just an example of one of the things I've seen.. If the whole volume of trades in the company is a positive or negative reflection on the SP.. without any company announcements.
> 
> Cheers.




yes, it's a fair question....

ok, for example and in no particular phase or order, think on this.....*what is sentiment?*

think about yourself.....your question carries a sentiment.....it's bullish.....you think that by looking and knowing what drives up price can give you an insight into getting in at the right time and at the right price

there's a lot of people thinking just like you......accept that youre just like everyone else

accept that you dont know that there are some people who have a lot of money who are the true drivers of sustainable price and who can also withdraw their long-side support at any time

accept that your prospective share is really a vehicle used to make money, to churn volume and price.....to withdraw value from your account to someone elses......this is the art of pushing the bid against the offer to force direction and tap sentiment.....

accept that right now you cannot read the signs of genuine accummulation versus a rinse-n-spin price rise

if you do accept this basic concept that you (yourself) cannot read when a price is being mined for its sentiment value, then, you are one step ahead of your account going to zero.......the odds of your account hitting zero is far higher in probability than you picking the winning horse.....because you are basically ignorant of the people who you are buying from... acknowledging this is a good thing....recognize this and take steps based on this ignorance, once youve owned up to the very thing you dont know youre way ahead of everyone else who's guessing as they go.......

your prospective speccy stock is already known and understood by the money that needs to know.....it is extremely rare for the major money not to know what-when-where of a company......the likely hood that you'll buy an oil-gusher or new technology ahead of anyone else is a fat-chance-to-none on an odds basis

so, this brings you back to the basics of what makes an auction, who comes to it and for what purpose......


several people here can write a cupla chapters on what makes volume move thru an exchange for one single stock code......but before you get to a specific code you need to be satisfied you understand what makes an auction


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## burglar (16 November 2013)

Joules MM1 said:


> ... but before you get to a specific code you need to be satisfied you understand what makes an auction



So, which stock should I buy?


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## Joules MM1 (16 November 2013)

Nh55 said:


> I'm asking more so what factors may change a share price, just an example of one of the things I've seen.. If the whole volume of trades in the company is a positive or negative reflection on the SP.. without any company announcements.
> 
> Cheers.




saturday night in a chat room.....lulz on me

repeat this to yourself forever: what is the point of the (stock code) auction today and this week and this month and this year?

you need to always be in balance with your own knowledge, that is, the _extent_ of your knowledge and the only way for you to achieve that balance is by asking non self-sentiment questions, in other words, to first balance out your own bias, your own sentiment, towards the thing you are interested in (a stock code)

you must ask the questions about the trade process and elocute what's happening

this should bring you back to the basic question of what is driving _*both*_ sides of the price and you can only do this when you fully understand the nature of _*that*_ particular auction, the phase it is going thru, the type of traders who in the buy-side and the type of traders who are in the sell-side, asking; what are their intentions and where is the evidence that reflects your conclusions.....this maybe far more valuable than the company or it's product/service....i say it is, in reality, far more influential than what the company does or produces.....

which still brings you back the basic question of _*makes an auction?*_.....

if you get any instant-soup answers to your questions, the odds are extremely high that next time around the auction ball-game has shifted but you wont know the right question to ask so you'll make an honest bet thinking youre getting honest odds and while the volumes can look similar and the company appears similar it is the auction process itself that carries the clues.....

there's a fake shoulder drop in every trade.....

low volume stocks can very quickly be assisted to elevate, the news comes out, it's good news, the stock price plummets south.....the people who needed to turn over their liquidity did what they needed to do and are now exiting the stock on the day prior to the news during the blow-out phase when all the tiny money just had to get in....in some instances they are simply churning their liquidity to create a range...price goes from 3c to 8c pre news, news releases, price plummets to 4c, tiny accounts chased up the price and bought all the supply the major money no longer wants, everyones happy.....erm......err.....the company does a cap raise, tiny accounts lose faith and start selling, easy supply for major money, a new announcment comes out, up we go again, major money sells the tiny money ('i-knew-i-shoulda-held-on') pressure on price is not as severe second time around, price treads water and gradually the tiny money hangs on for months and months while price drifts around in a small range and slowly deteriorates until a new news phase comes up...by this time a cupla years may have gone by....

there are a trillion stories in the goolash .....


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## Joules MM1 (17 November 2013)

burglar said:


> So, which stock should I buy?




haha

.......
:venus:

i missed you, too!


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## burglar (17 November 2013)

Joules MM1 said:


> slowly deteriorates until a new news phase comes up...by this time a cupla years may have gone by....




The tiny-money bloke holds in faith until the share price reaches the price he paid.
This brings him to the lip of the cup.
He and his mates rush to sell which makes the handle!


 ... and then voila; a cup and handle!

:

Which stock should I buy?:
 ... beef stock for goulash soup


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## Joules MM1 (17 November 2013)

rabbit stew.....with nuts?




burglar said:


> The tiny-money bloke holds in faith until the share price reaches the price he paid.
> This brings him to the lip of the cup.
> He and his mates rush to sell which makes the handle!
> 
> ...


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## burglar (17 November 2013)

Joules MM1 said:


> ... you need to be satisfied you understand what makes an auction



Hey Joules,

This is the best post I've ever seen on "Auction Action"!
Well done.


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