Help needed for beginner

[CanOz]

Re: Advice for beginner

to be honest I wouldnt mind working at a prop shop or for an investment bank doing trading (although i know that they can trade very differently), ill apply for both when im at un and afteri and see what happens. Ill stick to doing finance at uni as itll allow me to further understand the markets (i hope) and also develop social skills, mature more and to give me a better chance of landing a trading job. For the time being I think ill try and save some decent money, read up more on trading and then start to trade. whats an amount of money that's reasonable and worth while?

There is no right amount to trade with...You need to assess your risk per trade and then work out a 'risk of ruin'. With Interactive Brokers you'll need 10,000 AUD to open an account. Then you could trade 30k lots of FX if you wanted to get a feel for losing money.

OR

You could just sign up for an FX demo account and see for yourself what its like to trade.

I really think you need at least 10k to give yourself a chance at anything. I started with about 17k and just traded equities back in 2006-07.

You should spend some time on a simulator for a while (like 6-12 months). You could get a free copy of NinjaTrader and apply for a demo data feed. You might pay 50-$100 a month for CME data with level II if you wanted to continue. Start watching the DOM, check out You Tube for videos by Guy Bower, nobsdaytrading, Jigsaw Trading, L2ST, FT71...etc...That would keep you busy while you sim along...

CanOz

 

[FlyingFox]

Re: Advice for beginner

to be honest I wouldnt mind working at a prop shop or for an investment bank doing trading (although i know that they can trade very differently), ill apply for both when im at un and afteri and see what happens. Ill stick to doing finance at uni as itll allow me to further understand the markets (i hope) and also develop social skills, mature more and to give me a better chance of landing a trading job. For the time being I think ill try and save some decent money, read up more on trading and then start to trade. whats an amount of money that's reasonable and worth while?

Can't help you with the trading side but my advise will be to try and give yourself an advantage if you decide to go to uni. Don't just get a straight finance degree, try to value add. You might consider any of the following:

1) Programming
2) Hard Math (Stats and Calculus)
3) Econometrics


Philosophy even...

Ofcourse if you get some trading experience, it will be even better.

EDIT: Forgot to add, this may not help you at all but it will broaden your view and give you a set of skills that might be useful in later life.

 

[PinguPingu]

Re: Advice for beginner

With Interactive Brokers you'll need 10,000 AUD to open an account.

Only 3k if you're under 26.

 

[CanOz]

Re: Advice for beginner

Only 3k if you're under 26.

Wow, i didn't know that...

CanOz

 

[db94]

Re: Advice for beginner

There is no right amount to trade with...You need to assess your risk per trade and then work out a 'risk of ruin'. With Interactive Brokers you'll need 10,000 AUD to open an account. Then you could trade 30k lots of FX if you wanted to get a feel for losing money.

OR

You could just sign up for an FX demo account and see for yourself what its like to trade.

I really think you need at least 10k to give yourself a chance at anything. I started with about 17k and just traded equities back in 2006-07.

You should spend some time on a simulator for a while (like 6-12 months). You could get a free copy of NinjaTrader and apply for a demo data feed. You might pay 50-$100 a month for CME data with level II if you wanted to continue. Start watching the DOM, check out You Tube for videos by Guy Bower, nobsdaytrading, Jigsaw Trading, L2ST, FT71...etc...That would keep you busy while you sim along...

CanOz

i had downloaded ninjatrader planning on using that and doing simulated trading but they are incompatible with macs, ill have to get a pc laptop. I have read a few things by guy and hes very good at explaining concepts

 

[cbc1]

Re: Advice for beginner

CanOz,


Ahhahaha, that comment on forex. Thats makes me laugh. Noone seems to keen on forex. I met this guy at my gym and I told him I was looking at getting into forex and he said he would put a gun to my head for me. I don't trade it at all now.

Anyway DB94 everyone is talking about what to do before you start and its all great advice. AFTER you start trading your going to gain money and your going to lose money. After each winning trade I print out the graph and various data and go over what happened, why I chose that position and how I would look for that next trade. I also save the graph from bigcharts as my wallpaper on my phone so I look at it all the time (100 times a day if I have another open position !).

Go over your winning trades so you know what to look for next time. By going over them I find that it re-programs you mind and you automaticly look for those sort of positions / graphs / buying cycles again. Plus its also fun to remind yourself of your profit.

Good luck

 

[HiMyNameIsAri]

Re: Advice for beginner

ill only have $2000 or around there, when I plan to start trading

Thats plenty. I'm a beginner like yourself. The first thing I learnt was to only invest what you'd be prepared to lose. Last year (2011) around July I invested $3000ish in Suncorp (ASX:SUN) at about $6.50 per share. Theyre now at around $10.70. Alot of guys on this site will scough and call that chump change, but from small beginnings come great things. And for someone just starting, I'm quite happy.

Im not sure about you, but you could give me every book in the world about the stock market, but until I actually get my hands dirty, I won't know what I'm doing. So don't assume the books will teach you everything.

In saying that, open a BellDirect account, it was fast and easy for me as you can send your application in via email and usually have it activated within the day. Transfering funds take awhile depending on which bank you're with. Their fee is $15 per trade and a minimum of $500 spent per trade, or if youre purchasing more of the same stock I think it can be less than $500 after that.

So far Ive found the interface quite user friendly and informative, you'll also receive a daily email with reccommended shares which may give you some idea of where to start. I also use Google Finance as you can create portfolios and add any share to it, as well as how many shares and the price you bought them for. So it's handy for doing test portfolios to see how they perform before you spend your dollars.

Use your $2000 to get a feel for it. At the end of the day if it goes horribly wrong, you've only lost $2000 of your own money, not $200,000 of the banks. So maybe stay away from levergaing until you're confident in your purchases.

As for what shares to buy, you'll have to do your research, you can find heaps of opinions and information on the ASF forum about specific ASX shares. Google 'The Motley Fool' I found their information very insightful, its free too! They give recommendations on what stock they think is going to do well, also which stocks to invest in for stablility.

 

[McLovin]

Re: Advice for beginner

Thats plenty. I'm a beginner like yourself. The first thing I learnt was to only invest what you'd be prepared to lose. Last year (2011) around July I invested $3000ish in Suncorp (ASX:SUN) at about $6.50 per share. Theyre now at around $10.70. Alot of guys on this site will scough and call that chump change, but from small beginnings come great things. And for someone just starting, I'm quite happy.

Buying and holding with $2,000 is a bit different to trading with $2,000.

 

[HiMyNameIsAri]

Re: Advice for beginner

Buying and holding with $2,000 is a bit different to trading with $2,000.

Who said I held? All im saying is $2000 is plenty to see what works and what doesn't, regardless if you intend to hold it for awhile or day trade. I thought the OP mentioned something about medium/long term investment?

 

[McLovin]

Re: Advice for beginner

Who said I held?

Umm...you did.

All im saying is $2000 is plenty to see what works and what doesn't, regardless if you intend to hold it for awhile or day trade. I thought the OP mentioned something about medium/long term investment?

I'm not trying to be argumentative, God knows there's enough of that on here, but how does buying a single share and holding it for 18 months show you what works and what doesn't anymore than paper investing/trading? Maybe you could let us know what it taught you.

Personally, I think having the mindset that "I can afford to lose this money" is the completely wrong one to have when you get into the market. We all learn from our mistakes (probably more than we do from our gains) but you should do everything you can to not lose the money. Make it hurt a little bit and you'll learn a lot more.

 

[HiMyNameIsAri]

Re: Advice for beginner

Personally, I think having the mindset that "I can afford to lose this money" is the completely wrong one to have

Not exactly what I was trying to say. More like 'CAN I afford to lose this money?'.

As a beginner myself I think it would be wise to take baby steps. $2000 still gives you plenty of room to make a gain AND make mistakes. The rewards won't be high but neither will the consequences of a bad investment. That's all I was simply trying to say. It seems the mind set here is to go big or go home. Which puts a lot of new guys off.

In regards to my shares, bought low, sold high, bough low. I now have more shares than what I started off with. I learnt timing, research and patience can pay off. No I never said I held, I only said I bought them in 2011, and what they're worth today. What I did in between wasn't mentioned.

 

[johnnyhuynh21]

Re: Advice for beginner

Hi! im also new to trading, and want to get really serious into it. I just finished an accounting/corp finance degree so i know how to read financial statements (though it feels like other than terminology and definitions, the finance degree doesnt help with trading AT all) and going to start as an auditor in march!

I did trade CFD's briefly mainly using technical analysis but didnt really know what i was doing. Other than uni, is there any place where i can get taught on basically where to begin ? i know what everything is but just dont really know how to apply it practically, like in terms of tech/a i know what all the indicators are/do but at the same time i just find myself applying it and trading on what fits in the lines, so very very basic stuff

At the same time i know a little bit about fundamental analysis, like what ratios to look at and to compare it with similar stocks/market/industry but then dont really know how much the company is really "worth" so even a good company can be over-priced.

Right now i dont really have a trading style either, ive been trying out fundamental and tech/a and find i generally prefer technical analysis more but i think thats because i prefer a short term trading preference. So what i mean is while i know a little bit of everything, it also feels like i know nothing at all, as i have no solid "plan" and dont really know whats good and whats bad! can anyone perhaps give me a few pointers on where i could learn alot more and perhaps develop something suited to my style ? and im not really keen on learning about programming and stuff like that, is it really essential to do well ?

 

[tollbridge]

Re: Advice for beginner

Im not sure about you, but you could give me every book in the world about the stock market, but until I actually get my hands dirty, I won't know what I'm doing. So don't assume the books will teach you everything.

That is fantastic advice.

Dylan I started trading at an extremely young age (14) after I convinced my mother to open a brokerage account for me (or did I fake her signature? I can't remember :dunno: )

Every time you buy or sell shares you are going to have to pay brokerage. I think the minimum offered is still around $10.00 so you are going to be down 2% before you even start. See if you can find a broker who is offering some free brokerage for new customers, open an account and begin reading their research. I've found that the research and charting tools offered by many of the top brokers are far superior to the free news and tools found online. Find a few companies which you know of and understand, download their most recent annual report and have a look at their charts over a 1 week, 1 month, 6 months, 1 year and 2 year timeframe. Have a play around on your brokers platform and read the free guides or watch the introductory videos they may offer - you need to know what you are doing before you begin investing your money. Once you feel comfortable buy a parcel of shares (minimum $500.00 as per ASX rules) and set up a stop loss or mobile text alert at the predetermined price you want to get out at.

You'll realise very quickly how different real trading / investing is from anything university could have taught you. I promise you that you'll never forget the feeling of coming home and seeing your account balance has grown (even by a few dollars) whilst you were at the beach or out watching a movie.

Good luck and let us know how you went.

 

[db94]

Re: Advice for beginner

That is fantastic advice.

Dylan I started trading at an extremely young age (14) after I convinced my mother to open a brokerage account for me (or did I fake her signature? I can't remember :dunno: )

Every time you buy or sell shares you are going to have to pay brokerage. I think the minimum offered is still around $10.00 so you are going to be down 2% before you even start. See if you can find a broker who is offering some free brokerage for new customers, open an account and begin reading their research. I've found that the research and charting tools offered by many of the top brokers are far superior to the free news and tools found online. Find a few companies which you know of and understand, download their most recent annual report and have a look at their charts over a 1 week, 1 month, 6 months, 1 year and 2 year timeframe. Have a play around on your brokers platform and read the free guides or watch the introductory videos they may offer - you need to know what you are doing before you begin investing your money. Once you feel comfortable buy a parcel of shares (minimum $500.00 as per ASX rules) and set up a stop loss or mobile text alert at the predetermined price you want to get out at.

You'll realise very quickly how different real trading / investing is from anything university could have taught you. I promise you that you'll never forget the feeling of coming home and seeing your account balance has grown (even by a few dollars) whilst you were at the beach or out watching a movie.

Good luck and let us know how you went.

thanks for the advice i remember doing the news.com.au supertrader comp when i was 16 and I made $3000 in the first day, needless to say lost $6000 the next day lol. i knew nothing but i was an awesome feeling and experience and since then ive been hooked on trading

 

[pixel]

Re: Advice for beginner

[...] Don't just get a straight finance degree, try to value add. You might consider any of the following:

1) Programming
2) Hard Math (Stats and Calculus)
3) Econometrics

Philosophy even...

Of course if you get some trading experience, it will be even better.

EDIT: Forgot to add, this may not help you at all but it will broaden your view and give you a set of skills that might be useful in later life.

+1
especially the last "EDIT" bit