Educating myself to trade - Any suggestions?

[leonc]

I know a bit about shares in general but would like to try some trading in 3-6 months to make some quick profits and also maybe invest for the long term. In the meantime, what should I be doing to fully educate myself? I am currently reading the book "Rivkin's Introductory Guide to the Sharemarket". I will sign up for ASX shares game, read and sift through the good information on forums like this one, read other books and daily newspapers and learn as much as I can with information available online including the online course on ASX's website. Any other suggestions? I intend on starting slowly with 5-10K with strong blue chips and then look at higher risk shares as time goes by. With the prospect of losing my job (again), I am fed up with working for someone and am open to the idea of just doing this fulltime from home. My mortgage has been paid off and I am well educated so I have no doubt about my ability to achieve. Any input would be appreciated. My first post done.

 

[son of baglimit]

just make sure your reading includes info regarding "sometimes you win, sometimes you lose".

its dead easy to INVEST in the market, and even easier to lose, though the last 5 years would make some believe otherwise.

just be damn patient, and be prepared to lose some, but dont let it cloud your judgement.

 

[awg]

I have also joined ASF so as to assist in the process of "learn how to trade".

You would need to obtain at least a small selection of trading books, that will give you an indication of what skill sets you need to obtain, and to act as reference material.(search threads for recommendation,or browse bookshop or library & internet)

You can read some of the older threads by search on the Trading/strategies and Trading/resources sub-forums. They are quite enlightening


Also search threads by some of the pro-traders on this site such as Tech_A and Trembling-hand, to name a couple.

To be honest, my personal opinion is that it will take somewhat longer to learn than you mention. Others may disagree, but it seems to me to be like a Trade (as in tradesperson).

There is a great deal of knowledge subsets required. ie computer skills, chart reading, technical analysis, position sizing, market trends, money management,trade plan, psychological stuff etc, and that is just the BASICS.

My understanding is that about 80% of new traders fail. I would say that some of that is due to lack of preparation, although obviously you would think that at least 50% have to fail in order for the winners to win. When you see what the real pros are doing, I think you will see that they eat new traders alive.

But you have to start somewhere, so good on you. Work at it, and good luck.

regards tony

 

[tech/a]

it will take somewhat longer to learn than you mention

Tony
Wise words.

AWG
Trading should be treated as a business.Even if your intention is to dabble!
Think a little as to how valuable it would be to be able to trade confidently in ALL market conditions from now to you take your last breath!
Hopefully thats a long time so get it right or your business or attempt at business will fail well before you get a chance to open!

I've been at it 14 yrs.
Still learning still,making errors,but still enjoying the confidence in KNOWING how to trade events,doesn't mean I get them all right but does mean I KNOW what to do to minimise loss and maximise gain---when it comes along.

Here is my advice for what its worth.

There is SO MUCH to learn and such a diversity of methodology that to become proficient as a lone trader trading in all market conditions is extremely difficult for most of us mere mortals.

If your going to TRADE rather than invest,you'll need a great deal of help to build your proficiency in you business as time will generally defeat you.

(1) If you don't have the proficiency to analyse companies fundamentally search out people who do and pay for their information.
(2) If you decide to trade technically search out experts in the coding field and pay them to code the set ups and even systems that you wish to trade.

Find mentors who have been down the road.

(3) Learn all you can about RISK.
(4) Learn all you can about application.
(5) Make your OWN decisions don't listen to chatter on forums,it wont take long to recognise the cream floating on top.

My own mentor is Nick Radge private email me if you want details.

Lastly enjoy
If your not having the time of your life then your doing something VERY wrong!

 

[prawn_86]

I would suggest that you dont plan on making profits (overall) until after at least a year, perhaps longer. Im sure most would agree that it seems the 'easy' gains are now over.

Personally i started about 18 months ago and ended my first year down, but the amount i had learnt was more than worth it IMO, especially considering my age.

I guess i am what you would call a swing or momentum trader. I buy mainly on fundamentals but usually only have a 6 - 12 month timeframe, so not really an 'investor' as such. Although some of my holdings are now for the longer term, due to my uncertainty about the current market environment.

As another member (RichKid) says:

Plan your trade, Trade your plan.

PS - with regard to Techs final comment, its true. I love doing it and im glad i have found something i enjoy at this stage of my life. You shouldnt do it just to make cash otherwise it will put too much stress on you IMO.

 

[austek]

I think the difference between the successful and the failed traders/investors is -

Winners are passionate about succeeding and will push thru the hard times regardless of the pain when losing. It does become stressful when you see thousands of dollars peeling off your acount every hour during crashes if you haven't a plan in place to counter it.
Business experience helps, but in my case the drive comes from wanting to work for my self all my working life (40 years now retired) and this may be a big assett to yourself.

From what I see of losing traders so far is they make the job difficult by starting out with insufficient equity. Been trading & investing 5 years full on
without a losing year to date and a great 2006.

I find it much easier to trade my $350k account than my Daughters $6k account.

Refused to take lessons early, nor read books, didn't trust anyone.
Things are different now I know who I can trust, and I have read almost all the top books mentioned in forums. A good starting point is the "Money Bags" site ,they list the top 10 books world wide and I read them all.

You don't have to buy them all, just get your local library to order them 2 at a time for one dollar a piece, then buy those that would make a good reference thru the trading week.

Good luck

 

[Timmy]

Nothing to add except to say what a great bunch of replies ... really good stuff on this thread for a beginner leonc.

 

[leonc]

I'll say Timmy! I'm so impressed with the quality of replies and I thank you all so much. I will certainly take your comments on board. I have just picked up 3 books from the local library. All for free and I'm going to dive into them and build up my knowledge. That moneybags site looks very good too. Oh well, I have to start somewhere.