# Sincerely looking for help and advice on starting in stocks



## debaron (4 October 2006)

hie. 
I'm a beginner in stocks and basically dont know much about the going ons. I just started reading some basic books and articles online and i find it hard for me to actually cross the stage of actually practising what i read. I understand that i am new and still very much green in this area however i would really like to be more active. However, i dont know how to go about as i dont know anyone within my social circle tt does this sort of things. ( i have also just begun to join community clubs). I dont feel i am learning as much as i ought to be as most of the books i am reading are mostly introductory. I would really like to take a leap to the next level but dont know where to go. 
I even considered signing up for a course but after reading soem posts on the forum i realised that the majority thinks that those are just a waste of money. I would really love to hear how most of you started. (any books that are suitable to read ?)
Please advise me on how to proceed. I am really interested to learn and not just to gain a quick buck from the market.


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advise.*

debaron :

First you must determine which type of help your after.
Investor or Trader ----- they hold  opposing views of the sharemarket and their approach to it.

If Trading is what your after have a look at the "  Trading Plans " and the "Improving Chart Analysis " thread , the latter has gone over board now for a beginner but the early parts are o/k.

To see a difference in the two approaches check out the OXR thread 


Cheers


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## debaron (4 October 2006)

*Re: sincerely looking for help and advise.*

hie.
i was thinking trading for a start. then investing later on.


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## doctorj (4 October 2006)

*Re: sincerely looking for help and advise.*



			
				debaron said:
			
		

> hie.
> i was thinking trading for a start. then investing later on.



Is this because you feel that you don't have enough capital to make investing worthwhile?


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## yogi-in-oz (4 October 2006)

*Re: sincerely looking for help and advice.*



Hi debaron,

Here's a free download of practical stuff that you may 
need to address, before you commit your money to 
any market ..... 

http://authorsden.com/visit/viewwork.asp?id=10134

happy days

  yogi


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## ghotib (4 October 2006)

*Re: sincerely looking for help and advise.*

I think Coyotte's idea is that you need to decide first whether to trade or invest, and then focus your learning on one or the other. I disagree... a bit (Isn't that helpful? 2 replies and they disagree ) 

I also disagree... a bit... with your interpretation of the forum's view of courses. If you look again, you'll find that the majority thinks most of the expensive courses are a waste of money. That doesn't rule them all out. Take a look at the ASX education section: they offer free courses. There are plenty of free websites that are packed with information. 

You've obviously already made a start on this road, which is probably why Coyotte suggests you decide between trading and investing. I agree about making a decision, because you sound like you're feeling overwhelmed with information. But I think a big decision like that won't help enough. There are so many different strategies around within both trading and investing that you'd still be battling to see the trees for the forests, so to speak.

What about designing a kind of series of courses for yourself, and doing practical work on paper or with some of the real money you were thinking of spending on courses. 

What I mean is this. Pick a method from one of the beginner books and try to put it into practice. You already know that you'll discover things you don't know, so find out about them. IOW, get to know one method in depth. If you find the first method works for you, terrific: you can add another one when you're ready. If it doesn't, write yourself some notes about why, and use them to find another method to explore in depth. 

That's pretty well what I'm doing, and I've found it really helpful in sorting through the masses of information around here and elsewhere. I have a lifetime of methods to investigate one day, but they'll keep. There's always an opportunity somewhere.

Have fun.

Ghoti


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advice.*

What do mean doctorj --- you only need $500 to start investing .


But as the Wall Street bit goes " you have the Bulls , the Bears and the Pigs" Unfortantlly for the Pig the other two keep on trampling over him/her.

Cheers


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## nioka (4 October 2006)

*Re: sincerely looking for help and advise.*



			
				debaron said:
			
		

> hie.
> i was thinking trading for a start. then investing later on.



I'm sure you have that the wrong way around. Try investing first and paper trade at the same time until you get the feel of things. Remember that in trading for someone to gain there will be someone losing at the same time. On a rising market there is room for both but it can be an expensive exercise on a falling one.  Enjoy the experience regardless.


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## Sean K (4 October 2006)

*Re: sincerely looking for help and advice.*

Invest in something solid for a start. Blue chip. Then buy something else solid. Then something else. Diversify a bit. If you haven't lost all your money you could buy a managed fund with a regular investment. When you've accumulated about $30-50K I'd get a margin loan and start borrowing to invest in some more good stocks and managed funds. If you haven't lost all your money, think about putting some of that harded earned aside to 'trade' with. Paper trade for a while, develop a system, and then put it to practice. You'll lose some money so never bet the house on anything. The money you lose are your trading lessons. They don't come cheap. Plus, read, read, read, and maybe join a tip sheet or two to get ideas and join a forum to ask people questions and get other ideas. 

Perhaps if you can, before any of this, get a yonger brother who is the GM of Research at a stockbroking firm, to provide you with some advice to get started. 

Well, that was how I got into it 12 years ago. 

Good luck.


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advice.*

debaron

Hate to see U lose. your Capital.

Trading requires a min of $10,000 of back-up risk capital --- whether U trade with a Broker or CFDs  ---- you only want a small amount say $100, for a practice/training account with CFDs (IGM) --- But do not expect to make a overall profit for at least 12 months. 


Cheers


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## debaron (4 October 2006)

*Re: sincerely looking for help and advice.*

guys thanks for all the input.
i should prolly mention that i jz finished from uni, meaning that i have not much capital yet. I want to take this time to learn and read more. However i would want to get started on something small. I want to learn to trade before i invest as i want to get the liquidity for a bigger invesment in the future as i understand that trading is usually related to shorter term than investing?? (correct me if i got the whole concept wrong)


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## tech/a (4 October 2006)

*Re: sincerely looking for help and advice.*

Little capital?

Then paper trade as if you had it.

While you wont learn the psycological side of the equation you can test both longterm and short term trading ideas at the onetime.

Enter competitions like Yogi does (Yogi does it to win you'll do it to compare how you go.)

All without the necessity of losing a cent.
Plus you'll get a hang of how much you need to work at this business.
My guess is that it will take 3 yrs to become competent.


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## Realist (4 October 2006)

*Re: sincerely looking for help and advice.*

To make much money from a small start by trading requires one hell of alot of skill (and some luck).

And investing takes one hell of alot of patience.

If I was you at your age I spend my money on travelling, buy a car, or saving to buy a house.

The stockmarket is no money making machine....


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## Shroomos (4 October 2006)

*Re: sincerely looking for help and advice.*

I am only in the early days of trading myself, dont let low capital put you of, if you choose your shares carefully, and reinvest your profits, then that small amount could end up a large amount. The biggest worry when begining is the fear of loosing your cash.Share trading is often viewed as gambling, I disagree with this, as I feel that even if your share price  goes down, you stil should have a larger percentage of your capital in existance. And ofcourse, educate yourself, to put odds in your favour. asx has an online sharemarket tutorial, books can be a good source. financial review, magazines (Financial reviews magazine and money are good ones) These will give you an idea of what investment stategies are out there, and also investment products, as well as information about companies etc. Choose a few stocks to watch, see what influences make them go up and down. Once you feel you have chosen a good stock, at a low entry, buy, the best way of learning is by experience.


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## tech/a (4 October 2006)

*Re: sincerely looking for help and advice.*



> The stockmarket is no money making machine....




Well its worth the time and effort------trust me it certainly can be.


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				Shroomos said:
			
		

> I am only in the early days of trading myself, dont let low capital put you of, if you choose your shares carefully, and reinvest your profits, then that small amount could end up a large amount. The biggest worry when begining is the fear of loosing your cash.Share trading is often viewed as gambling, I disagree with this, as I feel that even if your share price  goes down, you stil should have a larger percentage of your capital in existance. And ofcourse, educate yourself, to put odds in your favour. asx has an online sharemarket tutorial, books can be a good source. financial review, magazines (Financial reviews magazine and money are good ones) These will give you an idea of what investment stategies are out there, and also investment products, as well as information about companies etc. Choose a few stocks to watch, see what influences make them go up and down. Once you feel you have chosen a good stock, at a low entry, buy, the best way of learning is by experience.





It's GAMBLING!

Learn how ODDS/ PROBABILITY are calculated, and always keep the edge your way.

Cheers


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## Shroomos (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				coyotte said:
			
		

> It's GAMBLING!
> 
> Learn how ODDS/ PROBABILITY are calculated, and always keep the edge your way.
> 
> Cheers



Its not gambling if you make well informed decisons, and know how the market works. Anyone who thinks it is gambling should not be trading.


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## tech/a (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				coyotte said:
			
		

> It's GAMBLING!
> 
> Learn how ODDS/ PROBABILITY are calculated, and always keep the edge your way.
> 
> Cheers




Interested Coyotte how YOU do this?
IE Keep the edge your way.

Do you think having the information below is important?

If so
Whats your longest string of losses?
Whats your average win rate?
Whats your average loss?
Whats your average hold time?
Whats your expectancy?
Whats your biggest winning trade?
Whats your biggest losing trade?
Whats your longest string of wins?


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## ghotib (4 October 2006)

*Re: sincerely looking for help and advise.*

Hi debaron,


			
				debaron said:
			
		

> hie.
> i was thinking trading for a start. then investing later on.



In your own mind, what is the difference? 

Specifically, what will you do differently when you make the change? 

Cheers,

Ghoti


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## debaron (4 October 2006)

*Re: sincerely looking for help and advice.*

Realist : dont worry i do make it a point to go on a holiday at least once a year and buy a car in the near future. I just want to learn something when i can still afford the time to take is slowly. 

I'm not in a rush to make big bucks. I just want to learn and hopefully apply what i learn soon(?).  

Speaking of online sharemarket games, do you guys know of any to reco?
I heard they are suppose to mimic the real market in terms of trends etc? 

As for books.. im looking to start of some tech/a ones like Guppy's trend trading. Anymore recos? (btw should i even touch those by buffett or benjamin graham's?).


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## mjp (4 October 2006)

*Re: sincerely looking for help and advice.*

Make sure you learn about risk management first - limit the amount of capital you are prepared to loose between your buy price and your initial stop for every trade.  2% of your capital at risk per trade is commonly talked about, but plenty of traders will be more comfortable operating at 1% or less.   Track how you are going over a number of trades and bail out and rethink at or b4  you are down 6% of your initial capital.  Better yet as soon as you have had a loss, cut your trade risk down, and with further losses cut your risk per trade again.  Let your trading earn it's way back up to positive territory before you allow yourself to increase your trading risk back up to 2%.  If you can get back to positive territory there is some hop eyou have a trading approach that might be working.  

That'll give you time to learn without blowing your capital and also give you an idea of how much capital you might need to be able to trade sensible sums allowing for brokerage costs every trade.  If brokerage is a big part of your 2% then you ain't got enough capital and you'll be trying to set stops too tight.  Van Tharp has something to say on this, as does Nick Radge and others.

Once you've got that sorted you need to find your "edge" - a combination of a style of trading that you are psycologically able to trade and that has a positive outcome over time.  That involves reading the books and paper trading and real trading trying approaches that appeal until you are onto something.   

Happy reading.  As TechA says expect three years+ trading b4 you are consistently trading well.  If that doesn't suit then save some of your income every year and watch it compound in the bank till you have the time to take this on.  

Good luck!


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				tech/a said:
			
		

> Interested Coyotte how YOU do this?
> IE Keep the edge your way.
> 
> Do you think having the information below is important?
> ...




Tech/a
was under the impresson that most of you guys would be doing this anyway with back testing a method ----something I've never bothered with as it's to akin to horse racing systems -- which never work because of the consistanly changing variables -- as compared to a casino system which is constant  envirement.

Q1:  imaterial
Q2:  imaterial
Q3: The Most Important part --- over the last 3 years 5% --mainly due suprise moves like OXR  last week (I was SHORT)
Q4: Varys -- eg: yesterday used the old method of selling to the "  lunch time crowd ) Long OXR around  11 closed around 12.30.
Current : Short OXR last Thurs -- Long Hedge Fri --- Close Long Mon (minor profit) ----- Long LHG Tues (last week) added to position Mon will Close today if Close looks like < 2.75 Loss 4% at 2.75 from the top up, even on inital.
no looks like I'm still in at at 4 pm
Q5: Prediction , not into that

Q6:MCL  O.05 TO 0.70 years ago --fluke ', over the past 2 years OXR -- have ridden it LONG/SHORT since Aug last year

Q7:   GYM 100% mine flooded on a xmas day       NTG several years ago 95% loss -- buy hold & pray.
        Over the last 2 years OXR --- 15% after the manipulated move Mon last  week --- was able to bail out during the day but the price got away to quickly.

Q8:   Not applicable


I go along with what Nick Radge ideas on Profit/ Loss Ratio  vs Win%


As the bulk of my trades are initated by Triangles or Flags I,m in the 70/80% S/R area , hence the edge is my way --- but with the S/R falls away with the tighter stops -- but this leads vasty improved Profit/Loss Ratios --- hence pushing the edge further my way

Basic stuff really

Cheers


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## coyotte (4 October 2006)

*Re: sincerely looking for help and advice.*

Will get into calc odds later on 


Cheers


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## barney (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				debaron said:
			
		

> hie.
> I'm a beginner in stocks and basically dont know much about the going ons. I just started reading some basic books and articles online and i find it hard for me to actually cross the stage of actually practising what i read. I understand that i am new and still very much green in this area however i would really like to be more active. However, i dont know how to go about as i dont know anyone within my social circle tt does this sort of things. ( i have also just begun to join community clubs). I dont feel i am learning as much as i ought to be as most of the books i am reading are mostly introductory. I would really like to take a leap to the next level but dont know where to go.
> I even considered signing up for a course but after reading soem posts on the forum i realised that the majority thinks that those are just a waste of money. I would really love to hear how most of you started. (any books that are suitable to read ?)
> Please advise me on how to proceed. I am really interested to learn and not just to gain a quick buck from the market.




Hi Debaron, I'm not gona try and give you specific advice, cause I'm still doing all that learning stuff myself, and besides, I've probably lost more in the last few months than you've earned in your whole life!!!!......but in a sense, that gives me credibility in some strange way..........There are so many people on this forum you can learn from, but its a funny thing about learning; you can't really appreciate good information until you understand/learn each part of the puzzle for yourself..................My advice (for what its worth) Start from the very beginning......Assume you know absolutely nothing..........and simply read anything and everything you can get your hands on, from wherever and whoever you can get it...........Don't believe its true until you prove it to yourself (PS Most of what you will read from good sources will in fact be true, but you need to understand it; thats the hard part). Don't bother trading until you at least have some grasp of how technical analysis works, and how the buyers/sellers "work" the share price of a given stock up or down..........Exit levels are far more important than entry levels (ie money/risk management etc etc.)...........there is just too much stuff to take in, in one go............So my main advice is; Do what I'm doing...........Learn, learn, and then learn some more......DON'T be impatient (I was and lost heaps!) .............Understanding how the market works and operates is the key..........If you make a choice to buy/sell a stock, you MUST believe (through knowledge) that your decision is/was correct (even if you got it WRONG), because if you are unsure about why you chose to invest your money, then you shouldn't have invested/traded it in the first place..............Long winded YES, but I speak from the experience of "doing it wrong" the first time..............I intend to get it right this time (and I'm doing much better atm!!)...........
So in brief ..........
"Education"......
"Technical Analysis".... 
"Money Management"..................
"Patience".....
"Discipline"..... and
"Luck"...........There are lots more but I don't want to bore you too much, All the best, Barney.

PS Read all the threads from the "smart" people around here, and then re-read them every couple of weeks as you learn more, and it will all make more sense


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## MichaelD (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				Shroomos said:
			
		

> Anyone who thinks it is gambling should not be trading.



Anyone who DOESN'T think it's gambling should not be trading.

One difference, though - with trading done correctly you get to be the house and have the edge in your favour.


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## wayneL (4 October 2006)

*Re: sincerely looking for help and advice.*



			
				MichaelD said:
			
		

> Anyone who DOESN'T think it's gambling should not be trading.
> 
> One difference, though - with trading done correctly you get to be the house and have the edge in your favour.




In isolation I couldn't live with your first sentence, though trading certainly shares some charactaristics with gambling.

With the addition of the second sentence though, I can.

So is Crown Casino a business or a gambling outfit?


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## coyotte (5 October 2006)

*Re: sincerely looking for help and advice.*



			
				wayneL said:
			
		

> In isolation I couldn't live with your first sentence, though trading certainly shares some charactaristics with gambling.
> 
> With the addition of the second sentence though, I can.
> 
> So is Crown Casino a business or a gambling outfit?




The Poker machine side, along withTAB, Keno , Lotto, Lotteries, etc are a business as the operater  is taking a  fixed percentage out of the pool ---there is no risk to operator, they are acting as a agent or broker.

The Gaming Tables side --Gambling , the long term edge is with the casino eg:
Roulette -- 18 /18  = breakeven But we have either 1 or 2 zeros which belong to the Cansino --- if all bets where evenly placed and zero was not coming up
the casino/ players would be in a neutral position.
But if you had a period where  players are consistantly winning against the table, the table in theory would go broke.


If anyone thinks that just because they have hitech charts and heaps of overated theories on T/A, sorts of puts them above the league of Punters, they should do their homework --- these Guys sent the old style Bookies broke ---- the avg Pro Punter would have put more work into analysing a field than the avg Trader and would probably have had more resoures available.

If you are achiveing a overall S/R of 80% with a Profit on turnover of 10% with around 5 trades each and every week, then you're in the same league as these guys were --- otherwise just another mug punter only in a different field.

Cheers


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## tech/a (5 October 2006)

*Re: Sincerely looking for help and advice*

coyotte

Your trading CFD's are you using the full 10:1 leverage?


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## coyotte (5 October 2006)

*Re: Sincerely looking for help and advice*



			
				tech/a said:
			
		

> coyotte
> 
> Your trading CFD's are you using the full 10:1 leverage?




NO !

I  treat them the same as a broker  20% max on a signal trade 

If doing a $5000 trade (total value $5000   margin $250) that $5000 is sitting in the Trading account.

as I trade short term both  L/S interest is not a problem
But I love the ease of trading --- live feed , INSTANT ORDER , good Graphs.

Except for LONGGG  TERM INVESTMENTS  I could not go back to trading with Comsec --- its just to damm hard compared to IGM --- its trading platform is set up for traders , ComSec for Investers




Cheers


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## coyotte (5 October 2006)

*Re: Sincerely looking for help and advice*

The major Problem I'm confronted with is the Trading Bank

This has to be readily accesable --- But it is idle Cash 

Hate the set up --- but don't know  what to do about it

Any surgestions ?

Cheers


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## tech/a (5 October 2006)

*Re: Sincerely looking for help and advice*



			
				coyotte said:
			
		

> NO !
> 
> I  treat them the same as a broker  20% max on a signal trade
> 
> ...




Cant work out your maths.
20% of $5000 is $1000 wheres the $250 come from?

If you have $5k with them does that not give you control over $50000 of stock?



> If you are achiveing a overall S/R of 80% with a Profit on turnerover of 10% with around 5 trades each and every week , then your in the same leaque as these guys where --- otherwise just another mug punter only in a different field




Hmm interesting numbers.

4 10% wins 
1 100% loss


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## coyotte (5 October 2006)

*Re: Sincerely looking for help and advice*

Tech/A 

ie : Trading Account $25,000
Max Pos 20% of Trading Account
= $5000 max position size

$5000 worth of stock gives U control of nothing --- its meerly a contract / bet between U and the CFD dealer --- but with IG at the underling price

Margins required by CFD Provider  --3% to 25% of total Position 

The $ 250 is generally around my avg margin (deposit)

The fiquers quoted for Pro Punters are real --- I was involved in it at the time 
You had to attend the Track to obtain a fixed price -- Betting on Saturdays 3 to 4 races and Wendsdays 2to 3 races .


What U was doing though was taking overlays (over the Odds ) at a fixed price on up to 3 horses per selected race --- generally for one of these to beat the pulic Favorite , which by its very nature would be under the Odds --- during the course of betting  one your selections could end the starting Fav -- But U should have obtained overs on it earlier in the betting ---- Great Stuff !


Cheers


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## MichaelD (6 October 2006)

*Re: sincerely looking for help and advice.*



			
				wayneL said:
			
		

> So is Crown Casino a business or a gambling outfit?



The house is in business, the same as trading when done properly.

Most participants at either sport, however, are gambling.


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## RichKid (6 October 2006)

*Re: Sincerely looking for help and advice*



			
				coyotte said:
			
		

> The major Problem I'm confronted with is the Trading Bank
> 
> This has to be readily accesable --- But it is idle Cash
> 
> ...




Hi Coyotte

(Assuming 5% margin for following examples)

MacquarieCFD  (trying them out atm) pay you 5.5% for 'available funds' (ie for the money that is not being used for collateral/margin). If you use a GSL you only put up the GSL % as margin and you need not worry about extra funds (but the GSL's can be expensive on some stocks, it's basically the cost of a closing order plus a premium). If you were _exposed*_ to a $5k position then having $5k in the ac would only be of use if the stock fell to near $0 right? 

_*(As opposed to using $5k as margin- then exposure would be $100k at 5% margin. 20:1 leverage) _

Wouldn't the CFD provider make a call and close out the position once you ran out of $$$ in your ac anyway, but may incur fees for that, (eg CBA CFD's (say 107 shares at 46.80= approx $5k) with MacCFD's require 5% of exposure as collateral, so 5% margin of $5k is $250 plus $x for your stop loss distance, it's good to have extra $$$$'s in the ac too to cover slippage, interest and the like but do you really need to have the full exposure in cash sitting in the ac?). 

If your stop loss order was say 5% from entry that would be another $250 so you'd need $500 (250+250) minimum plus extra $$$$'s for brokerage, interest (if going long) and slippage in your account, so let's say about $1k to $2k deposited in the ac for that single position. 

Tech/Wayne etc, you guys are experienced in trading on margin, does my math make sense?

Not sure if I follow this CFD margin system properly......Is this what you were querying or was it something else Coyotte? At least you get about the cash rate for your 'available' $$$'s with MacCFD, I understand some CFD providers give you nothing. I wonder if it's been covered in the general Question on Margin Lending thread....I am still learning about this so please be skeptical when reading my posts and seek expert advice!

PS Another good thread with some great posts by Ageo: https://www.aussiestockforums.com/forums/showpost.php?p=68411&postcount=14


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## happytrader (6 October 2006)

*Re: Sincerely looking for help and advice*

Hi Debaron

I would suggest you focus on the movements of one stock preferrably a bluechip - for instance after two quarters down it would be time to look at say banks. 

No one can do the work for you because you need to feel safe about where you put your money in your  own mind.

BTW, there is a big difference between the mindsets of an investor and a trader. Definitely some similarities to small business owners and employees.
So know who you are. The patterns of your life regarding, attachment and decision making style will give you clues.

Cheers
Happytrader


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## Julia (6 October 2006)

*Re: Sincerely looking for help and advice*



			
				happytrader said:
			
		

> Hi Debaron
> 
> I would suggest you focus on the movements of one stock preferrably a bluechip - for instance after two quarters down it would be time to look at say banks.
> 
> ...




I agree with  these comments, and those from Kennas and Ghoti.

Debaron, Ghoti asked you specifically how you saw the difference between being an investor and a trader and how you would do things differently in one or the other capacity?  This is a good question and I'd be really interested in your answer.

Even the ATO doesn't have specific guidelines to define the difference.

Julia


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## nioka (6 October 2006)

*Re: Sincerely looking for help and advice*



			
				Julia said:
			
		

> I agree with  these comments, and those from Kennas and Ghoti.
> 
> Debaron, Ghoti asked you specifically how you saw the difference between being an investor and a trader and how you would do things differently in one or the other capacity?  This is a good question and I'd be really interested in your answer.
> 
> ...



The difference ,in my mind (and one which influences the tax man)is simple: An investor looks to have shares for a reasonably long term in a successful company.A trader doesn't NEED a company to be successful but to have price swings. I have traded ,with good results, in some very unsuccessful companies., especially when they have a habit of using spin to keep the shareholders happy.


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## Julia (7 October 2006)

*Re: Sincerely looking for help and advice*



			
				nioka said:
			
		

> The difference ,in my mind (and one which influences the tax man)is simple: An investor looks to have shares for a reasonably long term in a successful company.A trader doesn't NEED a company to be successful but to have price swings. I have traded ,with good results, in some very unsuccessful companies., especially when they have a habit of using spin to keep the shareholders happy.




Thanks, Nioka.  That's interesting.

What I was actually looking for is Debaron's own understanding of how he /she saw the differences, as originally asked by Ghoti.  I'm curious as to 
why he/she would regard trading as a more appropriate start than investing.

Julia


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## swingstar (7 October 2006)

A trader usually has no vested interest in a company. They only care about  short-term price action and trends.


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## Buster (7 October 2006)

*Re: sincerely looking for help and advice.*

Hey Debaron..

I like you am a complete noob when it comes to the sharemarket.. I've actually been dabbling in the market for about ten years now, you know 2K here and 5K there, and over that time missed some fantastic opportunities, but also avoided (well mostly.. anyone remember OneTel?? ) absolute disasters looking for the quick buck that everyone seems to associate with the stockmarket..

You'll find lot's of great advice here (certainly I have..) and witness some great debates about the why fors and why nots of particular styles of investing trading in the market.. 

I've really only put what I call significant amounts of money (250K is probably chicken feed for most of the posters here) in the last 12 -18 months after paying off the mortgage etc etc..

However, the lesson's I've learnt over the earlier years are quite neatly summed up in Kenna's post..



			
				kennas said:
			
		

> Invest in something solid for a start. Blue chip. Then buy something else solid. Then something else. Diversify a bit. If you haven't lost all your money you could buy a managed fund with a regular investment. When you've accumulated about $30-50K I'd get a margin loan and start borrowing to invest in some more good stocks and managed funds. If you haven't lost all your money, think about putting some of that harded earned aside to 'trade' with. Paper trade for a while, develop a system, and then put it to practice. You'll lose some money so never bet the house on anything. The money you lose are your trading lessons. They don't come cheap. Plus, read, read, read, and maybe join a tip sheet or two to get ideas and join a forum to ask people questions and get other ideas.




I'm not totally keen on the managed funds aspect as personally it burns me that some spruiker pulls in 2-4% of my hard earned money every time I dump some in on a 'trailing commission'..  But certainly Blue chip (I also personally prefer companies that have dividend reinvestment) and build yourself a nice diversified portfolio.. it will take some time, but that's a lesson I learned the hard way also, which is you generally have to be quite lucky (or have inside information)to hit a big time winner in the small caps.. 

After some time in the 'investing' game you can move onto the 'trading' game as you will have a whole new perspective about the sharemarket.. I've not yet progressed to the 'Trading' game.. but I don't think is too far off in the future..

A quote that really brought it all home from a book I read some years ago about the stockmarket and a passage about losing money in the market goes something like this..  'Do you know a professional Golfer who hasn't lost a golf ball??'  The point that matters is that you learn from it.. 

Good luck to you and look forward to reading about your success and (Lesser) failures here on ASF..

Cheers,

Buster.


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## nioka (7 October 2006)

*Re: sincerely looking for help and advice.*



			
				Buster said:
			
		

> Hey Debaron..
> 
> (250K is probably chicken feed for most of the posters here) .



I doubt that very much and definetely not so in my case.


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## MichaelD (7 October 2006)

*Re: sincerely looking for help and advice.*



			
				Buster said:
			
		

> (250K is probably chicken feed for most of the posters here)



250K is *not * chicken feed for anyone - you'll find that many more talk the talk than actually walk the walk.


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## Buster (8 October 2006)

*Re: sincerely looking for help and advice.*

Apologies..



			
				MichaelD said:
			
		

> 250K is *not * chicken feed for anyone - you'll find that many more talk the talk than actually walk the walk.





			
				nioka said:
			
		

> I doubt that very much and definetely not so in my case.



I've been lurking in these forums (generally don't feel qualified to post due to my lack of real stockmarket experience..) for some time, and had formed the impression that many here at ASF were quite advanced and talking big dollars.. like the sort of dollars I to aspire to aquire someday, but sadly have a way to go yet..   I't funny how you can form a mental image from what you read, and sometimes be off the mark..

Didn't mean to cause any offence etc..

Regards,

Buster


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## barney (8 October 2006)

*Re: sincerely looking for help and advice.*



			
				Buster said:
			
		

> Apologies..
> 
> 
> 
> ...





Hi Buster, I personally talk in very big numbers when recalling my losses   .....and very small numbers when I am counting up my winnings   ...... Cheers, Barney.  
PS I'm sure a large majority of people here would be very happy to split your 250 K with you ........


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## nioka (8 October 2006)

*Re: sincerely looking for help and advice.*



			
				MichaelD said:
			
		

> 250K is *not * chicken feed for anyone - you'll find that many more talk the talk than actually walk the walk.



And alot of us walk the walk but only slowly amble along and enjoy the scenery.


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## MichaelD (8 October 2006)

*Re: sincerely looking for help and advice.*



			
				nioka said:
			
		

> And alot of us walk the walk but only slowly amble along and enjoy the scenery.



That would be the ones who will enjoy the fruits of success in time. 

But just a further comment on a 250K pot to play with, Buster - there is a much higher likelihood of survival with such a decent stake, mainly due to the fact that higher risks are not needed to be taken as is the case with smaller stakes.


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## nioka (9 October 2006)

*Re: sincerely looking for help and advice.*



			
				MichaelD said:
			
		

> That would be the ones who will enjoy the fruits of success in time.
> 
> But just a further comment on a 250K pot to play with, Buster - there is a much higher likelihood of survival with such a decent stake, mainly due to the fact that higher risks are not needed to be taken as is the case with smaller stakes.



Having a $250,000 pot is a lot different to $250,000 being chicken food as suggested earlier. There is no more or less need to take risks because of the size of the pot. It all depends on your objectives. At my age (74) I don't want long term investments. As I said, I want to enjoy the scenery. Last year my investments bought me a new car, a modest cabin cruiser and let me enjoy life and not eat into my capital.
  I have seen people with a much better stake than $1m lose the lot.


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## yogi-in-oz (9 October 2006)

*Re: sincerely looking for help and advice.*



			
				nioka said:
			
		

> Having a $250,000 pot is a lot different to $250,000 being chicken food as suggested earlier. There is no more or less need to take risks because of the size of the pot. It all depends on your objectives. At my age (74) I don't want long term investments. As I said, I want to enjoy the scenery. Last year my investments bought me a new car, a modest cabin cruiser and let me enjoy life and not eat into my capital.
> I have seen people with a much better stake than $1m lose the lot.






..... great post, Nioka !~!

happy days

  yogi


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## MichaelD (9 October 2006)

*Re: sincerely looking for help and advice.*



			
				nioka said:
			
		

> There is no more or less need to take risks because of the size of the pot.
> I have seen people with a much better stake than $1m lose the lot.



Generally the smaller the size of the pot, the greater the greed and ego of the newbie trader, which pretty much guarantees failure. "I have $10,000 and I'm going to trade futures and/or options and make a million dollars a year. Boss, take your job and...". 

However, if the trader can overcome greed and ego and just patiently "enjoy the scenery" as you eloquently put it, then they will learn to trade safely and survive.

The statistics of success/failure at this game favour those with larger pots to play with. That doesn't mean there are people who simply won't learn their lessons and will still blow their big accounts up.

On a personal note, I trade at 0.5% capital risk per trade and with a very wide stop. Newbies will gasp - "so little?" - but I can happily survive 20 losses in a row with a minimal dent in my capital. You need to have a decent pot to be able to make the parcels involved feasible.


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## barney (9 October 2006)

Hi Guys/Girls (Ladies) , Nioka, You don't look a day over 45 !!!!  (You are about my Mum's age ...... good onya,     luv my Mum)

No real input here for me except, ......... I had a "reasonable" sized pot to start with, and lost 75% of it through lack of education ........... I agree that a larger initial stake can "buffer" you from the "whip sawing" action of the market, but you must "educate" yourself ............absolutely critical to success .....thats all I have to say ........... Cheers, Barney.


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## Porper (9 October 2006)

*Re: sincerely looking for help and advice.*



			
				coyotte said:
			
		

> I go along with what Nick Radge ideas on Profit/ Loss Ratio  vs Win%
> 
> 
> As the bulk of my trades are initated by Triangles or Flags I,m in the 70/80% S/R area , hence the edge is my way Cheers




I can't ever imagine having a 80% success rate ( I don't disbelieve you ).I don't trade many triangles etc. as I don't have the software, if I come across one I will maybe try if price action is correct, but 80 % is high.

I think I read that you have a 1:1 risk/reward ratio (maybe mistaken here)which would explain the high success rate.

Of course Nick Radge does say that the win/loss ratio is the most important, and not the win percentage, but with that combination you will be very profitable.

What software do you use to find your patterns ?


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## StockyBailx (16 October 2006)

_The best help and advice anybody could give anybody else is of course thier own exsperiance and know how?_

_This forum certianly makes for interesting reading and I can certianly vough for most comments made on this thread, although I must say that (Win%)Pofit Compound is the one of the most important factors to trading. I suggest that moving averages are also very important. As they make up the stocks body language. Combined  your RSI Relative Strengh Index with CMA- Crossover Moving Average. CPMA- Classic Penatration Moving Average. MACD- Moving Average Convergance Divergance and MVA- Moving Volosity Average are the perfect rule to sucessful trading. Now of course you need these indicator values to ensure a credited Profit Compound can be reached. this method may appear to be difficult, but really it is not for any beginer or professional a like. Fundermentals are a perfect example to finding Profit Compound and re-asurance of your analyisis and trade. Looking back for past surges and breakouts can also be a good indercation of profit Compound. Technical and Charting Analyisis is helpful and above all useful._

_I have recently discovered that using Bollinger Bands and Certian values, can be great assistance in analyising a stock based on face value, To understand your trade, its trend and to know when to buy or sell is very Important to me._

_I find these methods of analyisis are very sucessful and can give you the upmost convidance in your trading. Almost full proof I think. Plus I find it much more oxcillerating and profitable trading the ASX smalls (0.01-2.0) In general, keeps me keen I guess and boy do they surge and make the bucks._

_To whom this thread is mainly concerning. If you are looking for assistance to get your self started, to keep your head above water and your self on the right track to be trading with more of those dollars, that are so very important in making trading easier as mentioned, May I strongly suggest and recommend to you to go the ASX Stock Chat Forum, were you will find a thread called outstanding breakout Alerts. I think this thread is very useful and it can give you a lot of insentive and a inside to the movers of today. Look for my threads (StockyBailx) I visit there often and Iam always more than happy to pass on sum winners that I find to be over 80% profitable, as they are and just before they breakout. _

_*Good luck with all that. I wish you all the very best and I hope you learn to understand my values. *_


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## swingstar (16 October 2006)

StockyBailx said:
			
		

> I suggest that moving averages are also very important. As they make up the stocks body language. Combined  your RSI Relative Strengh Index with CMA- Crossover Moving Average. CPMA- Classic Penatration Moving Average. MACD- Moving Average Convergance Divergance and MVA- Moving Volosity Average are the perfect rule to sucessful trading.
> 
> I have recently discovered that using Bollinger Bands and Certian values, can be great assistance in analyising a stock based on face value, To understand your trade, its trend and to know when to buy or sell is very Important to me.
> 
> I find these methods of analyisis are very sucessful and can give you the upmost convidance in your trading. Almost full proof I think.




Eeekk!!


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## coyotte (16 October 2006)

*Re: sincerely looking for help and advice.*



			
				Porper said:
			
		

> I can't ever imagine having a 80% success rate ( I don't disbelieve you ).I don't trade many triangles etc. as I don't have the software, if I come across one I will maybe try if price action is correct, but 80 % is high.
> 
> I think I read that you have a 1:1 risk/reward ratio (maybe mistaken here)which would explain the high success rate.
> 
> ...






Do not use programmed software to find patterns

I,m only talking about 3 patterns

Setups come from Guppy's " Precision Pattern Trading " Seminar

Have been trading this style for over 2 years .

Cheers


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## coyotte (16 October 2006)

PS : to the above

Both Stocks I was referring to at the time
ROC and LHG both achieved the Triangle Targets --- checK it out !

Difference is :  I am a Trader NOT a Anaylist


Cheers


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## Slick Rick (17 October 2006)

*Re: sincerely looking for help and advice.*



			
				nioka said:
			
		

> Last year my investments bought me a new car, a modest cabin cruiser and let me enjoy life and not eat into my capital.




"He who dies with the most toys wins."


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## nioka (17 October 2006)

*Re: sincerely looking for help and advice.*



			
				Slick Rick said:
			
		

> "He who dies with the most toys wins."



Try taking your investments with you.


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