# So what am I getting myself into?



## Rock84 (7 September 2011)

Hi guys, my first post here, though have been lurking/reading up for a little over a week now.  

I'm very keen to get into stock trading but have found the setting up and a tonne of WTF!? moments have really slowed things down a lot more than I'd hoped so I'm after a bit of guidance on a few things.

I'm in need of a good online broker. By good I mean cheap (of course), low minimum deposit (like $1k if that is even possible?) and easy, i.e. good for a beginner.

It's also taken me a little while to define what my actual goals are with trading and I've concluded that I'm not too interested in day trading yet.  I see that as a bit more of a lifestyle shift, something tat you need to be into 110% to do properly and I'm not really there yet, I want to trade in shallower waters, on lower volatility, but at the same time I'm not self managing my super...yet.  So more the medium term trading, stuff that wont go up in a straight line but wont take years to see any real value.  

I would like to dabble a bit in Forex, but mostly commodities like coal, oil, lithuim etc. (as that is what I understand mostly) and those 'hot tips' you hear in back alley bars.  I also don't want to be limited to ASX, I want world markets.

So is there one broker with the lot or do you need to use several different ones depending on what I'm wanting to trade?

Cheers,

Rob


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## So_Cynical (7 September 2011)

Why do i get the feeling this thread is about you telling us about this amazing broker you have found that meets all your needs.


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## ob1kinobi (8 September 2011)

So_Cynical said:


> Why do i get the feeling this thread is about you telling us about this amazing broker you have found that meets all your needs.




Good call SC, you don't seem to be so cynical all the time though.


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## Rock84 (8 September 2011)

So_Cynical said:


> Why do i get the feeling this thread is about you telling us about this amazing broker you have found that meets all your needs.




Umm I'm not sure why you are getting that feeling actually, why don't you tell me cos I'm really interested. 

Maybe while you are doing that others could kindly make positive contributions to this thread...


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## tech/a (8 September 2011)

All with a Grand!!

My advice.
Find $20-50K then start your search.
In the mean time learn a little more and youll be able to answer your own questions without attracting the wrath of some of us who are Cynical.


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## Tysonboss1 (8 September 2011)

tech/a said:


> All with a Grand!!
> 
> Find $20-50K then start your search.
> In the mean time learn a little more .




I second that motion,

If you are in the position of not having much money, Investing or trading is not going to be the cure to that problem.

First fix your cash flow problem, ie, earn more or spend less, and start generating savings.

and in the mean time learn about your chosen field ie, investing or trading.


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## LostMyShirt (8 September 2011)

You don't _need_ 20-50K starting money. 

Just make sure that the money you do throw down will not be retrieved so it can ride the lightning.

I have had my fair share of missed targets, but my first trading experience a few years ago was with 1K flat, trading with Westpac brokers. That 1K, if it had been left for at least a period of 1 year, would have actually earnt me up to 30K.

Now, this is a dream result - I wouldn't expect that result to occur on a regular basis. But it does happen, and with a decent fundamental style analysis, buy and hold strategy, you may just be able to catch a tsunami before it happens, and ride it with a 1K board.

Is this ideal? No. Expecting such large returns from the market regularley is a little silly. Of-course, 10K would be personally ideal, but I only had 1K, and a determination.

Don't worry about finding funds right now. Go and open a demo account - paper trade, read about the markets, learn charts, have your eyes on news tickers and go from there.

I am not a day trader - I am more of a buy/hold, and I don't trade CFD's or go short (not experienced enough).


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## tech/a (8 September 2011)

That 1K, *if* it had been left for at least a period of 1 year, *would* have actually earnt me up to 30K.

I can look at the market every year and say that.
Now go do it!

Woulda coulda shoulda


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## matty77 (8 September 2011)

just use Belldirect.

$15 buy/sell

minimum purchase is $500

sold!


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## LostMyShirt (8 September 2011)

tech/a said:


> That 1K, *if* it had been left for at least a period of 1 year, *would* have actually earnt me up to 30K.
> 
> I can look at the market every year and say that.
> Now go do it!
> ...




Mate - no need for the arrogance. Regardless of whether or not I left the money in there the fact remains that the price movements do happen so pushing him to find 50K is not a necessity....


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## skc (8 September 2011)

LostMyShirt said:


> Mate - no need for the arrogance. Regardless of whether or not I left the money in there the fact remains that the price movements do happen so pushing him to find 50K is not a necessity....




It is also an indisputable fact that people win the lotto. But looking back at the winning numbers last week is hardly going to improve your chance of winning it this week, is it?


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## LostMyShirt (8 September 2011)

skc said:


> It is also an indisputable fact that people win the lotto. But looking back at the winning numbers last week is hardly going to improve your chance of winning it this week, is it?




Are you honestly comparing the financial markets to a lottery?

Fact: you don't need 25-50K to start
Fact: Companies grow over time (DYOR, strong fundamentals)

You may not recieve 30:1, you may only get 3:1 (which is still through the bloody roof).

The fact of the matter is, it can happen, it does happen, and it is not exclusive to a few traders.

Besides, would it not be optimal to test the waters lightly, then to jump in with all your assets tied to your legs?


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## tech/a (8 September 2011)

> Mate - no need for the arrogance




Thats not arrogance

*THIS is arrogance*

" Unlike you I didnt sit and watch $s flash past my eyes I actually traded my money
with positive expectancy and *STILL* have my shirt"

The difference is about as subtle as a brick
a bit like trading/investing $1000 or $ 50000


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## LostMyShirt (8 September 2011)

tech/a said:


> Thats not arrogance
> 
> *THIS is arrogance*
> 
> ...




Sorry - but whether it was real money or a paper trade, the stock made its rise, and so did all my other picks, though no in the same sky rocketing nature as the lucky strike.

I appreciate your _experienced_ comments, but I am going to have to disagree to some extent, knowing full well the advantages of a larger invstment. You must be a full time trader, so I see where you are coming from.

I hope the OP finds comfort in the former opinions by everyone.

" Unlike you I didnt sit and watch $s flash past my eyes I actually traded my money
with positive expectancy and *STILL* have my shirt"

I do apologize that we all cannot be as financialy comfortable as you are, Sir money bags.... I on the other hand needed to pull out my investments for personal reasons - yet had I held, I'd be one happy camper.


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## tech/a (8 September 2011)

> Besides, would it not be optimal to test the waters lightly, then to jump in with all your assets tied to your legs?




There is no more RISK in trading $1000 as there is trading $50000
provided you understand risk management.


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## LostMyShirt (8 September 2011)

tech/a said:


> There is no more RISK in trading $1000 as there is trading $50000
> provided you understand risk management.




Fine - yes.

Good day, Tech/a...


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## againsthegrain (8 September 2011)

I use cmcmarkets for 9.90 a trade could start day trading with around 5k with that fee. Sometimes I do a few small trades of 1 - 2k when things get boring and doesn't eat much margin


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## LostMyShirt (8 September 2011)

againsthegrain said:


> I use cmcmarkets for 9.90 a trade could start day trading with around 5k with that fee. Sometimes I do a few small trades of 1 - 2k when things get boring and doesn't eat much margin





$9.90 _is_ excellent.


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## howmanyru (8 September 2011)

Hi Rock, I suggest you set your sights lower, taking on forex, world markets etc, etc, etc, when you have no experience and little money sounds like a bad idea. You may become overwhelmed and broke very quickly. Why not just have a dabble at normal long trading until you understand what it's about & can control your emotions and have a well developed risk management plan, and PROVEN you can stick to it (wish i could do it!) The stock market can be brutal to your finances and emotions and there is a LOT to learn so take your time. As far as a broker goes, i just use Westpac as I have a linked savings account with them anyway, so they may charge a few bucks more but hey, if i squabble about a few bucks on the brokerage then i shouldn't be trading anyway, oh, and have fun, it's only money


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## TabJockey (8 September 2011)

Rock84 said:


> I would like to dabble a bit in Forex,* but mostly commodities like coal, oil, lithuim etc. *(as that is what I understand mostly)* and those 'hot tips' you hear in back alley bars.*  I also don't want to be limited to ASX, *I want world markets*.
> 
> So is there one broker with the lot or do you need to use several different ones depending on what I'm wanting to trade?
> 
> ...




Oh god, I dont know whether to laugh or cringe. To answer your question IG markets do it all, but its a bucket shop. But its going to be the same result as going to a casino. You need to research for a few months, and then test strategies without putting any money down. If you hop in and try to trade commodities off a short or even medium time frame you are going to get skinned alive.

It will be fun though but don't expect to make any money until you know what you are really ahead of the game. Remember for you to make money trading anything you have to take money off other traders, and for you to do that you have to be better than them which is not likely after ONE WEEK of "research".

Perhaps you are confusing trading with investing. That's going to require allot of research also, but at least you stand a chance if you buy long term value.

AND FOR CHRIST SAKE DO NOT LISTEN TO ANY "HOT TIPS"


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## Rock84 (8 September 2011)

Wow.  My intention sure as **** wasn't to provoke this much emotion. 

Anyway...Thank you to those who actually provided something useful, I'll definitely take your suggestions and advice onboard.

First off, I'm a noob in practice but have been following certain markets, reading a lot of blogs and newsletters like Sovereign Man and The Daily Reckoning (among others) for a little over a year now and have now and the main reason I haven't started trading (or investing as TabJockey said, is the better way to put what I'm looking at doing) is because I've been traveling and wasn't able to put as much focus as I'd like to into this. 

To clarify, I'm not looking at this to solve all my money problems, I have money and have a job and can save perfectly well, but dropping 20k+ of my hard earned at my level is obsurd and would go against every single cell in my body.  Waiting til I have a 'spare 20k+ just gathering dust is also obsurd.  To be more specific, my goal is to invest, and reinvest as I earn.  So maybe I need a specific broker for this?  Either way, starting small on something that I can afford to lose I think is the way to go.  1k sounds reasonable.

The reason I specified world markets is because I'm not wanting to miss opportunities when they come up.  In the past I've come across stock investment opportunities overseas.

As for Forex, this does seem like something that can be picked up relatively quickly, I have had a demo account and played around with it, and understand _some_ Forex markets and why they move, so this will probably be my entry into day trading, if/when I get to that stage.  

So, based on my revised criteria I'm happy to listen to advice/opinions.  

I'll check out IG Markets and CMC.

Cheers,

Rob


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## LostMyShirt (8 September 2011)

I am also new to this, Rock. However in my short time of learning about stocks after incurring very slight losses I have learnt a thing or two, however have yet to capitalize on it.

Try, www.chartschool.com to start your learning of charts. Trading shares IS hard work! It requiers patience, dicipline and a keen sense of a deal. Only the shrewd individuals will win in this game. So take the time to educate yourself on your pick before putting your money in there, or else you will be stuck learning the hard way, like me.

As you can see, I have lost my shirt


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## Smurf1976 (8 September 2011)

My opinion is that you are better off learning ONE thing and doing it well rather than attempting multiple strategies all at once and messing them up.

If you only speak English and want to learn Japanese then that's all well and good. Trying to learn Chinese, French and German at the same time is going to make for one almighty confusion most likely...

Learn one thing first. The other markets will still be there tomorrow.


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## LostMyShirt (8 September 2011)

Smurf1976 said:


> My opinion is that you are better off learning ONE thing and doing it well rather than attempting multiple strategies all at once and messing them up.
> 
> If you only speak English and want to learn Japanese then that's all well and good. Trying to learn Chinese, French and German at the same time is going to make for one almighty confusion most likely...
> 
> Learn one thing first. The other markets will still be there tomorrow.




I suppose that is a decent plan. Then again I didn't think learning the two basic aspects, fundamental and technical analysis would be a daunting task. Then again, if that be the case - learn fundi first perhaps?

They may still be here tomorrow, but your dreams may not....


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## Billyb (10 September 2011)

Hi Lostmyshirt

Some of the folk here are often pretty blunt sometimes, they forget that they too were once beginners exactly like you, looking for friendly help as well...
Anyways, there is still a lot of wise content in their comments, starting with the fact that $1k is not enough.

But basically
Don't even think about commodies or forex right now as they are leveraged investments suitable only for very experienced traders. That leaves basically stocks. Any Aussie broker (comsec etc) can get you into the stockmarket and they don't usually have any minimum opening balance but brokerage is the cost you need to worry about. Comsecc's brokerage is $40 per trade (buy and sell), so on $1000 that means you need to make 4% profit just to cover brokerage. This is one of the main reasons why $1000 is not enough.

There's a lot to learn. While you are saving enough cash to open an account you can start to study and work out what kind of investor or trader you want to be. Then you can start to paper trade to build your confidence. Now's not a good time for beginners to be in the markets anyway.


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## LostMyShirt (10 September 2011)

Respect to the wise and abhorance for their ego's.

1K is a measly amount - however it can work for you quite well.

Yes, broker fee's are important to take into consideration. They eat into profits.

Now; I started with 1K. I jumped in with the idea of being a medium-long term investor. In other words, I wanted to find a small company, and up and comer into the industry, and invest. Of-course, it took a lot of reading before I jumped in. The idea was to invest the 1K, and top up as time goes by.

Now, due to personal financial reasons, I needed my thousand back. We won't go into why.

2 of the stocks I picked make decent profits in a single year. One made 100 percent, the other made 3000%. Now, I have been told that the latter company is akin to a lottery, but is it really? 3000% is a heavy amount, but wouldn't one be satisfied with even 1000%, or 500%?

The fact of the matter is a 1K starting amount is fine - it is enough to begin with. You will not make large profits fast - but you can start there and get a feel for real trades. If you become confortable with your long term or mid term pick, you can top up from time to time. So, in my view, the best thing to do with small amounts of money is mid-long term growth. The stock market is not a lottery - they are companies doing their best to grow. Small companies become big companies all the time - it is the way of the financial world, if of-course they are competative enough and strong enough to get there.

So before those "experienced" ego maniacs jump in and respond to a very humble trader, such as the OP, with outlandish comments such as GO AND FIND 50K (no doubt to project a reflection of their own status), stop and think what a good trader who has done his homework can do with any amount of money. The OP did not state he is wanting to make a million overnight.


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## theartglasshouse (10 September 2011)

$1,000 is perfectly fine to start of with, but ensure that you invest that $1,000 wisely. I usually study a company for 2-3months before investing in it. My first share buy was NST, which has come back to me quite well and is still going strong . It is setting me up for a good trading account for the future. 

Another one I thoroughly enjoyed investing in recently was IVR. I put $850 in the pot for that one and sold out for $2,000 due to the good announcement they put out. All within 3 weeks 

So trust me, you don't need $50,000 to start of with. And generally just ignore the 'rude' comments here and just use this place as an arena to gather information for you own gain. Some of the over inflated ego's here are good for a laugh but that is about all 

Also, just use a place that has the lowest brokerage fee. I use belldirect. 

Goodluck, that $1,000 if invested wisely can lead bigger things!


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## LostMyShirt (10 September 2011)

TheartGlasshouse,

Excellent post, and I must agree on all points.

I also wish to compliment you on the good picks - and respect the fact that you realize it is not the money but the knoledge that counts. A good trader will turn his 1K into a lot.

May I ask, what are the main things you look for in a company when making your investment? I wish to know out of curiosity and the OP would also find the information useful.


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## tech/a (10 September 2011)

Kiddies

Trading with $ 1000 is putting you way way behind the eight ball to start with
Here commision becomes an issue.
You can't spread risk.
You can't even position size correctly.

You will be limited to 2 positions $ 500 min each trade.
$1000 won't even get you a decent computer.
The ideal is to trade with well over $100,000

Strange how experience is seen as ego.
Then again I guess not I was a dumb ass know it all kid once myself.


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## LostMyShirt (10 September 2011)

You are correct, Tech/a, on the point of risk and diversification. But the fact is you _can_ make it work.

You can't run all the systems of spread, risk management and diversification. You only have the tools and strategy to find a decent pick, and there is no certainty.

A know it all Kid and a know it all Veteran are two sides of the same coin.

With a small amount like that, it is possible to earn very slight side income, which always helps - though is not going to sit you next to Murdoch. The point though is that you earn and re-invest and to do so you need a solid strategy.


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## tech/a (10 September 2011)

There are rare instances where a long term base is built from next to nothing.

But anyone who has attempted to run even a part time business valued at a Few Thousand will tell you failure is almost certain.

No different trading--- other than 95 % of people who have a go at their own investment or trading fail.just look back on all those traders who come and disappear from this forum.

I'd argue that this know it all vet has the proven track record
If the know it all kid is on the same coin I'm on the wrong currency.

Further I would suggest that a noob and $1 k couldn't out perform a vet with $50k in a Year.( in % return) terms.


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## Garpal Gumnut (10 September 2011)

I've tried to make sense of your quest, Rob, but am unable to.

Where would you like to be in ten years time?

gg


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## LostMyShirt (10 September 2011)

tech/a said:


> Further I would suggest that a noob and $1 k couldn't out perform a vet with $50k in a Year.( in % return) terms.




Of-course not as the guy with 50K can diversify and have an accumulated percentage providing it is majority wins. Not only that, you are comparing a learner driver against Schumacher.

Well, this is getting slightly off topic. I still don't agree that 25K+ is a prerequisite, but totally understand the arguments for it, and agree that a larger starting fund would be ideal.


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## tech/a (10 September 2011)

Ok
Let me put it this way.
Starting with $ 1000 won't give you the opportunity to learn how to trade.
It's like buying a business for $1000 and expecting to expand it with capital earned.
Under capitalization can be a real killer.

*All your doing is having a $1000 punt on a few stocks.*

That's it----an educated punt.
Like looking through the form guide and picking a horse.

If you call that trading or investing you've not passed first base in your education.


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## tech/a (10 September 2011)

By the way I can have 20 % winners and still out perform a trader or investor who has 50 % + winners.


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## LifeChoices (10 September 2011)

I don't think you should trade the markets with 1K - it would be soul destroying and will end in tears.

If I had 1K to lose, I'd be making a night of it and would go down to the dogs on Monday nights and eating bad hot dogs and getting prison tats when I win - you'd have more fun doing that for heaps longer.

DYOR


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## nulla nulla (10 September 2011)

And with a half decent capital base you can have cumulative 1% winners and out perform the 50% winners. 

No offence, watching this thread has been entertaining. It swung from the noobie seeking advice from the experienced to the noobie asserting what could and couldn't be done. 

The proof is always in the pudding. As in business, the majority fail for lack of capitalisation and business acumen. Trading, whatever instrument you choose, is a full time career and not a part time hobby (Unless of course you are filthy rich and only do it for fun). 

T/A is right, build up your $50k base then choose your weapon.


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## satanoperca (10 September 2011)

Not to weigh in on this discussion but a $1000 to invest. 

Okay,

1. Amibroker - Charting Software
2. Data Feed - Northgate
3. Subscription to someone who understands trade, maybe thechar?????t
4. Time : Min 12 months research and learning 

What is gained, some tools to not lose $50K playing the share market.

Cheers


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## LostMyShirt (10 September 2011)

nulla nulla said:


> And with a half decent capital base you can have cumulative 1% winners and out perform the 50% winners.
> 
> No offence, watching this thread has been entertaining. It swung from the noobie seeking advice from the experienced to the noobie asserting what could and couldn't be done.
> 
> ...




Wow.

"No offence, watching this thread has been entertaining. It swung from the noobie seeking advice from the experienced to the noobie asserting what could and couldn't be done. "

Just - wow.

Ok - I'm wrong. Nothing can be gained from playing the share market under 50K. All who invest under 50K, lose. Nulla-Nulla and T/A have established this with the utmost solidity. Put your money in your pocket - leave trading for the BIG BOYS. My sincer condolences to those who have invested $49,990... Because we all know every single trader on Earth who ever made money started with 50K. No knowledge or experience, just 50K. They all had diverse portfolios when they started, because they had 50K. Found a very decent entry into a very cheap low cap with established growth potential? Don't have 50K? Then go to the TAB./sarc

It is as if I havent made myself clear. I understand the benifits of trading with a significanly larger base - they are obvious. But is it an absolute prerequisite? NO!


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## nulla nulla (10 September 2011)

LostMyShirt said:


> Wow.
> 
> "No offence, watching this thread has been entertaining. It swung from the noobie seeking advice from the experienced to the noobie asserting what could and couldn't be done. "
> 
> ...




This little tirade comming from someone that has already admited the he lost his shirt. 

Dealing with shares: To buy and sell shares you need to deal in marketable parcels with a minimum value of $500. For $1,000 you can buy two (2) parcels of shares of $500 ea or one parcel of $1000.
To cover the cost of brokerage, $19.95 in and $19.95 out, you need to make a profit of $39.90 per trade simply to cover brokerage. Buying and selling at this level you are going to be a long time in the market (if you are successful) building your fortune. Of course if the share value of your parcel drops below $500 you could be a longer time in the market waiting, hoping for it to recover so you can sell it.

In reality if you are starting with $1,000 the best you could do is to learn up on TA & FA and buy a share that has a yield of 10%, preferably fully franked. Each time you save up another $1,000 buy more of the same share or another one that pays close to 10% fully franked. Re-invest your dividends and keep slugging in those $1,000's and eventualy you will have a portfolio worth $50,000 and you will be in a better position to trade. 

Also by that time you should have learned about risk assessment, money management and have identified the area you are comfortable buying and selling in. Good luck.


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## LostMyShirt (10 September 2011)

nulla nulla said:


> This little tirade comming from someone that has already admited the he lost his shirt.
> 
> Dealing with shares: To buy and sell shares you need to deal in marketable parcels with a minimum value of $500. For $1,000 you can buy two (2) parcels of shares of $500 ea or one parcel of $1000.
> To cover the cost of brokerage, $19.95 in and $19.95 out, you need to make a profit of $39.90 per trade simply to cover brokerage. Buying and selling at this level you are going to be a long time in the market (if you are successful) building your fortune. Of course if the share value of your parcel drops below $500 you could be a longer time in the market waiting, hoping for it to recover so you can sell it.
> ...




Lol - I'm a bit of a punter by nature, and I thought the name was clever  But no I havent lost my shirt.

That advice sounds like a fairly decent strategy, it makes sense. With 1K, yeah you will be in the market for a long time - but over time, if you are confident with your stock and you see the potentials coming into fruition, you eventually top up.


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## Billyb (10 September 2011)

theartglasshouse said:


> Another one I thoroughly enjoyed investing in recently was IVR. I put $850 in the pot for that one and sold out for $2,000 due to the good announcement they put out. All within 3 weeks




In other words you took a punt and it payed off. It's not all that different to gambling at the Casino. Yes Rob it might pay off if you're lucky, but all you are doing is GAMBLING but more importantly with $1000 there is no room to make errors and learn. And what's the point if you're not learning, thats what I think.


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## LostMyShirt (10 September 2011)

Hold on; why is it gambling if he has conducted research on the stock like any other trader would do? Now, if he just randomly picked off an index on the other hand, I'd agree with you.


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## barney (11 September 2011)

LostMyShirt said:


> Hold on; why is it gambling if he has conducted research on the stock like any other trader would do? Now, if he just randomly picked off an index on the other hand, I'd agree with you.





Hi LM/Shirt,

I am actually surprised that some of the more experienced traders here are not a little more flexible with their analysis of your strategy.  Only caveat would be, it should only be implemented in a *BULL MARKET*

Its true,  .....   1K ain't gona do it unless you get real lucky ........... however ......

*1)* Everytime you save up your 1K, you do your research/due diligence, and Invest it in a fledgling Spec with "potential"

*2) *Stop Loss is set at .......... SP=0  ..... loss $1000

Repeat the above process for example 10 times ...... Investment= $10,000

To keep it simple, lets say  *3 stocks go bust, 3 stocks double and 3 stocks remain stagnant*.  Lets also assume *you get one outlier *that increases to 5X initial outlay.

That would net you close to *50% ROI*.   

You could possibly achieve that result with Random entries/Stock picks.   For an experienced trader, the above scenario should be a piece of cake .....

I agree that you don't need $50,000, but you will definitely need more than $1000 to swing the statistics back closer to neutral.  Just my 

Good luck.


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## Billyb (11 September 2011)

LostMyShirt said:


> Hold on; why is it gambling if he has conducted research on the stock like any other trader would do? Now, if he just randomly picked off an index on the other hand, I'd agree with you.




One could assume that a stock that is capable of doubling in value in a 3 week period is probably a high risk speculator stock - i.e high risk. 

Putting your money into these kind of stocks is not gambling if you have some sort of money management strategy. IF you have a $50000 account and you put $1000 into a speculator stock like that (that you've researched) and you have allocated/diversifed the rest of your capital to reduce portfolio risk then it's not gambling. This is because you are only risking 2% of your entire account. But when you only have a $1000 account and you put it all on one speculator stock (Black/Red) then it's not all that different to gambling IMO (no matter how great the fundamentals, especially in a bear market). It's the same as putting 100% of a $50000 account on one speculator stock - of course that's gambling.


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## LostMyShirt (11 September 2011)

Yes I do agree with that, Billy. The risk is significantly higher when parking the entirety of your desired asset into a single growth potential. I personally believe that a well conducted FA should help avoid such breakdowns however, it must be for the long term. 

I also agree that such a strategy should be implimented into a Bull market - however, a decent entry into a growth potential left in there for the long term (with top ups through-out the course of the trade) is a better option than a short to mid term investment. I am glad that some members were able to close out high percentages within 3 weeks of the trade, however for the most part in these volatile times the swings may make a trader panic, thus long term is better with a stock that has growth potential after being confident enough to buy in after a very well done FA.

The risks are significant, OP. I hope you realize that - but you do have the potential to succeed.


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## tech/a (11 September 2011)

I doubt that any amount of careful and considered F/A is going to be accurate in the future with regard to " perceived" undervalued stock.
With world economics as they are today's undervalue is likely to br tomorrows over value.

Frankly I think your more likely to profit very short term in these markets of uncertainty than taking the optimistic view long term.

I'm always amused that strong and persistent selling is seen as "panic"
Yet buying dips is seen as smart value investing.
Even though there is no sign of an emerging bull run.

I think it's highly likely that the really smart traders are unloading to the really smart traders every time there is a move up.
Who's really smart then?

My point is that putting anything long term in this market is at best optimistic.
If I was trading a grand I'd be technically trading fast momentum moves in and out in a day or so.
Infact -----


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## LostMyShirt (11 September 2011)

No doubt, Tech/a - with experience and knowledge you can do these strats and win. That was my initial drive to get into the market and learn to make quick trades. I am testing my theories on paper before I hit the market short term with real money.

Well; I hope the Original Poster got a kick out of the thread.


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## skc (11 September 2011)

barney said:


> To keep it simple, lets say  *3 stocks go bust, 3 stocks double and 3 stocks remain stagnant*.  Lets also assume *you get one outlier *that increases to 5X initial outlay.
> 
> That would net you close to *50% ROI*.
> 
> *You could possibly achieve that result with Random entries/Stock picks.   *For an experienced trader, the above scenario should be a piece of cake .....




You can make a lot of profits by giving hypotheticals. Go back to all the listed stocks on say 1 Jan 2000 and see what percent of them went bust vs stagnant vs double vs 5x outlier... and see what a portfolio of 10 stocks will achieve on average today.


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## barney (12 September 2011)

skc said:


> You can make a lot of profits by giving hypotheticals. Go back to all the listed stocks on say 1 Jan 2000 and see what percent of them went bust vs stagnant vs double vs 5x outlier... and see what a portfolio of 10 stocks will achieve on average today.




SKC, Respectfully ...... Quoting my post with my caveat omitted is not really a fair representation of what I was alluding to, but I understand your point.

My *Bull Market *"hypothetical" was simply an alternative for under capitalised new traders to slowly access the market, while keeping their risk minimized.  

Seems a safer plan than saving up $50K, then cutting loose on the "unsuspecting" market  ........... That a bit like giving an L plater a V8 Supercar to practice their parallel parking in

ps. I crashed my V8 Supercar a few years ago so I speak with authority


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## theartglasshouse (12 September 2011)

One thing I would never do is place all my eggs into the one basket, but that is hard to really do when you only have $1,000 to start of with!

So if I was starting out again and only had $1,000 to invest, I would be looking at a spec stock that is close/near to producing with good assets and a good management team.

Over time I would topping up on this one to build a base whilst putting some cash aside for future share purchases. Whilst you do this, you have time research other companies that you may want to invest in. This also gives you time to learn. 

Certainly these are more volatile times, but thankfully out the 12 stocks I own, 75% are still in the green. I am not concerned about the others (as I have been topping up at these wonderfully low prices) as I believe they have a good future with some quality assets. One thankfully, is close to producing 

The main thing is getting your foot in the door, and this is the time do it! Another thing is to not be too concerned with the price fluctations. If you have picked a quality company with good assets, you can with a bit of luck, watch that base grow like I have done (and I only started of with $2,000, although I did have more cash in the bank).

Generally, I am long term buyer/holder, so for me doing something like I did with IVR, certainly was a gamble, but it was also a company I had been looking at for a while. I only wished I had bought in a bit earlier at $0.05 

Whatever way you go, I would ignore the comments of you can't do it, as you certainly can like I have, and like many others no doubt. 

All it takes is patience, time, research and of course, a bit of luck. And never panic, unless your on the titanic!


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## LostMyShirt (12 September 2011)

Couldn't agree more, GlassHouse.

I am also quite glad to hear that your portfolio is majoirty green  It is always nice to hear about wins


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## theartglasshouse (12 September 2011)

For the moment lostmyshirt, some are edging close to where I bought in at LOL. See how this week pans out :


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## LostMyShirt (12 September 2011)

I personally would wait until this uncertainty passes and we are back to moderate swings.

I am in RED at the moment and has been fairly resiliant however selling now at the 4% loss wouldn't be a good idea. If your companies are fundamentally strong then I suggest waiting. It may be a terrible suggestion but oh well, I'll see if it is in time.


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## theartglasshouse (12 September 2011)

I will be riding it out of course as there is no point in selling in the current market and the majority of my shares are long term investments.

I have looked into RED as well, but have decided to forego a purchase into them at the moment due to other financial commitments


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## LostMyShirt (12 September 2011)

theartglasshouse said:


> I will be riding it out of course as there is no point in selling in the current market and the majority of my shares are long term investments.
> 
> I have looked into RED as well, but have decided to forego a purchase into them at the moment due to other financial commitments




Well either way I hope you make a bundle.


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## marioland (12 September 2011)

I too have just started with two grand. Day trading with this sort of money, not a chance. Speculative buys, yes.


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## LostMyShirt (12 September 2011)

marioland said:


> I too have just started with two grand. Day trading with this sort of money, not a chance. Speculative buys, yes.




I started with 1K (topped up along the way), and lost a bundle on Aug 5th - being an absolute newb, I cashed out. If I rode the storm for only a month I'd be back in the profits.


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## skc (12 September 2011)

barney said:


> SKC, Respectfully ...... Quoting my post with my caveat omitted is not really a fair representation of what I was alluding to, but I understand your point.
> 
> My *Bull Market *"hypothetical" was simply an alternative for under capitalised new traders to slowly access the market, while keeping their risk minimized.
> 
> ...




The suggested plan was saving up $50k while you learn the market - not saving up $50k and go crazy!

If you hypothesize with numbers plunked out of thin air you can't suggest that one can achieve anything like 50% ROI while minimising risk. I don't know what the real percentages are, but I suspect not 1 in 10 stocks will go up 5x.

There is nothing wrong with starting with $1k - It's only wrong to expect great returns on the average.

P.S. Where do you get yourself a V8 supercar?


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## barney (12 September 2011)

skc said:


> The suggested plan was saving up $50k while you learn the market - not saving up $50k and go crazy!




Lol ..... I know that ...   A man needs a little poetic licence to embelish when writing on a Forum!!

The biggest problem for new traders is that no amount of reading books/paper trading/learning t/a, f/a etc etc will have them ready  to take on the market with the required depth of experience (in my view) .... 

There may be some exeptions, I just haven't met any of them yet: 

With that in mind ..... amplifying the start up capital will only amplify the eventual losses until the required "real time" experience is gained  (again in my view)  ... Perhaps I'm wrong.




skc said:


> If you hypothesize with numbers plunked out of thin air you can't suggest that one can achieve anything like 50% ROI while minimising risk. I don't know what the real percentages are, *but I suspect not 1 in 10 stocks will go up 5x*.




I agree with the part in Bold  I was only trying to keep the maths simple ...... and also agree that a random selection of stocks would require a fair amount of luck ......  however, trading well researched "penny stocks" in a Bull Market with a mix of  ...

Low Debt
Extremely low market Cap 
Quality assets/Tenements/ etc etc 
Switched on management
And a dash of T/A for productive entries
(Each trader can add his own specifics)

can be very fruitful ... and who doesn't like fruit??





skc said:


> There is nothing wrong with starting with $1k - It's only wrong to expect great returns on the average.
> 
> P.S. Where do you get yourself a V8 supercar?




For sure ..... Not great returns with $1K, but with $10K the odds can be adjusted more favorably, especially when a few exit/entry filters etc are added to the mix ........... although, even with $10K its going to be a hard road unless additional risk is added.

The V8 Supercar was a hypothetical representation of my first trading account which was well over the $50,000 figure mentioned earlier ....... I crashed and burned that account unceremoniously, which is why I shudder when I see traders recommending new traders save up their base capital before learning how to lose correctly!!

Fortunately by my most recent trading account has faired much better 

appreciate your input as always.


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## skc (12 September 2011)

barney said:


> The V8 Supercar was a hypothetical representation of my first trading account which was well over the $50,000 figure mentioned earlier ....... I crashed and burned that account unceremoniously, which is why I shudder when I see traders recommending new traders save up their base capital before learning how to lose correctly!!




Lol. I really thought you had a V8 Supercar... I even thought of googling ex-V8 car drivers named Barney. But I better things to do 

Anyhow, $50k is not the answer to success, and neither is $1k.


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## LostMyShirt (12 September 2011)

skc said:


> Lol. I really thought you had a V8 Supercar... I even thought of googling ex-V8 car drivers named Barney. But I better things to do
> 
> Anyhow, $50k is not the answer to success, and neither is $1k.




51?


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## skc (12 September 2011)

LostMyShirt said:


> 51?




Getting warmer


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## barney (13 September 2011)

skc said:


> Lol. I really thought you had a V8 Supercar... I even thought of googling ex-V8 car drivers named Barney. But I better things to do




I wish ........:car:




skc said:


> Anyhow, $50k is not the answer to success, and neither is $1k.




Absolutely.


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## Julia (13 September 2011)

skc said:


> Lol. I really thought you had a V8 Supercar... ID
> 
> .



So did I.  Almost sent a message of sympathy.


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## tech/a (13 September 2011)

> Anyhow, $50k is not the answer to success, and neither is $1k.




Undercapitalization isnt a pre curser to success either.
Other than Luck.
I dont know of any other road to success with a K or So.
Please enlighten me.


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## LostMyShirt (13 September 2011)

The entire thread is full of suggestions to the question you have posed. What more can one say?


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## tech/a (13 September 2011)

Well
If I had ONLY $1000.

*Perhaps surprisingly*

Id be very short term trading.
Momentum trades in small caps
with tight stops. Very short term
Day or a few day trades.
1 at a time.
Re investing profit.

Here is some of todays flyer's---a couple here with some great volume
Id dis guard the really low volume prospects.

Sure you have to learn what to look for set up---both in and out of a trade.
But worth doing.

*IN/OUT/GONE.*


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## alexc2005 (13 September 2011)

tech/a said:


> Well
> If I had ONLY $1000.
> 
> *Perhaps surprisingly*
> ...




you would have to get good at reading volume.

Alot of the ones i have seen jump quickly cant really maintain.

How can you be sure that you are buying on the climb and not at the peak?


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## tech/a (13 September 2011)

There certaintly are ways of detecting opportunity and there are ways of detecting exhaustion.
You would need intraday data though.
You would need a few 1000 hrs study of VSA and some more perhaps 1000 hrs reading charts.
It does become pretty obvious.

Here is an example Ive been trading VSA around 5 yrs.

Here is todays SPI Im trading and how Ive spotted trades and traded them.
If you look carefully youll see how and why I made decisions.

(1) Wide range bar ultra high volume.
(2) *2 bars *together with higher than normal volume often indicate
exhaustion of Demand OR Supply.
(3) Decision points have more relevence at Support or Resistance levels.
Often Support and Resistance is *EXCEEDED* in Futures due to stops being taken out!

*Click to enlarge*


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## 5oclock (13 September 2011)

TECH/A do you use the trend cluster function in trade guider? I am just getting started withT/G.


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## LostMyShirt (13 September 2011)

There you go, T/A - you worked out a strategy suited to your style of trading with the percieved minimum starting amount of 1K. Awesome


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## tech/a (13 September 2011)

No.

I find a lot is bells and Whistles unfortunately purely because the general public (And a lot are sold to the Asian Countries) like lots of indicators and lines.

The Diamonds are nothing more than an M/A---disappointing Eh!


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## LostMyShirt (13 September 2011)

So you use only OHLC bars and volume? That is pretty awesome man - a definite display of experience.

Lol, maybe those others are like me and feel smarter while using stochasitcs, M/A and MACD  Volume ofcourse


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## 5oclock (13 September 2011)

TECH . Yes I guessed the diamonds were MA. After having read some of your older posts onVSA , and read Master Markets I  have been trying to use VSA to follow some stocks. But like you and others have said there is no magic bullet. However VSA does explain a lot of price action that was previously a complete mistery. Do you find VSA throws more light on stocks with high volume rather than thinly traded?Any hints or references on VSA would be most welcome!! I have looked at a number of the other threads relating , but may have missed some.


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## tech/a (13 September 2011)

LostMyShirt said:


> So you use only OHLC bars and volume? That is pretty awesome man - a definite display of experience.
> 
> Lol, maybe those others are like me and feel smarter while using stochasitcs, M/A and MACD  Volume ofcourse




Not even Open ---not required.



5oclock said:


> TECH . Yes I guessed the diamonds were MA. After having read some of your older posts onVSA , and read Master Markets I  have been trying to use VSA to follow some stocks. But like you and others have said there is no magic bullet. However VSA does explain a lot of price action that was previously a complete mistery. Do you find VSA throws more light on stocks with high volume rather than thinly traded?Any hints or references on VSA would be most welcome!! I have looked at a number of the other threads relating , but may have missed some.




Its really experience.
A lot that I use is from observation and not available in books.
Well not that Ive seen and I havent published one reciently!.

Im happy to start a thread and do some RIGHT HAND page analysis on charts thrown up.
Ill Start a VSA analysis discusssion thread.


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## 5oclock (13 September 2011)

TECH ,  Sounds good ,if you can spare the time I am sure that a number of others are interested and would value your experince on subject!!!


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## LostMyShirt (13 September 2011)

Indeed.

I could use all the guidence I can get - relish the oppertunity.


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## tech/a (13 September 2011)

Kick off over here

https://www.aussiestockforums.com/forums/showthread.php?t=23435&p=658111#post658111


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