New to the stock market: Where do I begin?

[websman]

Re: Beginner

Well, only if you don’t apply your trading method.

People spend some hours on flight simulator for example, then applying what they learned in real flight they can do it and they can do it well.

But I don’t want to make impression that anybody has to do what I do.

Good point my friend. Everyone needs to develop their own style of trading. what works for one may not work for another.
:drink:

 

[robots]

Re: Beginner

To Atomic Sheep,

think about being a long term investor with your $1000.00

a stock like reece(plumbing) for example if you put $1000.00 in around the mid 70's would now be worth around 4 million (reinvesting distributions) similar story with many other stocks.

look for companies that are in the top200, every day companies, they will all go through different economic cycles and therefore the ups and downs but will appreciate well

no doubt have some fun (and agony), but put aside into quality

regards
robots

 

[kaveman]

Re: Beginner

Paper trading sucks. I recommend jumping in with cash, but taking small positions. You have to learn to control your emotions and you can't do this while paper trading. There's a big differnece btween losing money on paper and losing real money.

Webs...

How do you know if a system can be profitable if you do not test it in real time? Backtesting is only as good as your's and the software abilities to create trading system in code. Why would you throw money at something if you ahd no idea if it can make profits?

 

[It's Snake Pliskin]

Re: Beginner

How do you know if a system can be profitable if you do not test it in real time? Backtesting is only as good as your's and the software abilities to create trading system in code. Why would you throw money at something if you ahd no idea if it can make profits?

kaveman,

There are two points I would like to make here:

1. Nothing is guaranteed in the market, regardless of backtesting and the like.
2. Paper trading is not accurate enough to be taken seriously.

Those who paper trade may see some benefits but may be disillusioned or mislead as to the future outcomes of their trading methodology.

These are just my thoughts and don't mean others are wrong or right.

Regards
Snake

 

[tech/a]

Re: Beginner

I agree with points in both.

Papertrading shouldnt be confused with systematic or system trading--

I certaintly agree with Kave to trade in any way without having an idea if at the end of a period you'll be nett profitable is just plain crazy.
97% do it-- one or even a dozen winning trades doesnt guarentee a consistent profit. But I'd rather travel with a road map that was correct at the time of printing than with none at all!!

Nothing is guarenteed in the market place---well in the short term possibly however in my lifetime 51 yrs Buying and holding most of the top 100 stocks GUARENTEED profit. I can also guarentee every trader that if they,

(1) Have more winners than losers

AND OR

(2) Have bigger winners than all accumulated losers

They are guarenteed to be nett profitable.

As for paper trading not being accurate that is entirely determined by the recording skill of the trader using it and the period of time you test it.

Finally traders who do not exhaustively test their methods could well be dis allusioned---
The discretionary trader with no testing normally finds himself locked in losses as he cannot afford to take the loss,rather than locked in winners reluctant to take profits!.

Yes Paper trading ISNT THE answer I agree whole heartedly but can be the basis of a methodology.I think new traders without the technology are really up against it.

There are a whole lot out there without a map.

 

[kaveman]

Re: Beginner

I am confused with this
If you do not test a system how do you know if it can give profit returns?
I agree that paper trading is not like reak trading, but is it not better to start real trading having had some experience at not-so-real trading.

Does anyone here trade a system with real money wthout doing any testing to see if the system has positive expectancy (ie expect it to have agood chance of returning profits?)

Perhaps you dd not finish reading what I wrote on the paper trading?
I expect real returns to be at best half profitable as paper trading.

I always look at it that I coould possibly make half the returns, or double the losses, in real trading compared to paper trading to allow for the psychology effects

Perhaps you only use backtesting for proving to yourself that a system could make money. But what stocks do you base the testing on? If it is the ones you will be trading then you ahve to remember that the charts of the past are not necessarily the charts of the present or future. Perhaps one of those stocks had a large upwing going from 50cent to $5, but will it do the same in the future going from $5 to $50 in the smae timeframe? So many variables make a chart different from time to time and from price to price.

But without some testing, you can never know if a system has positive expectancy even though that testing is flawed. But it is better to base your trading on a system that has shown its worth than to trust a non-tested system with your real money?

 

[tech/a]

Re: Beginner

Graham
For what its worth I agree.

 

[It's Snake Pliskin]

Re: Beginner

Perhaps you only use backtesting for proving to yourself that a system could make money. But what stocks do you base the testing on? If it is the ones you will be trading then you ahve to remember that the charts of the past are not necessarily the charts of the present or future. Perhaps one of those stocks had a large upwing going from 50cent to $5, but will it do the same in the future going from $5 to $50 in the smae timeframe? So many variables make a chart different from time to time and from price to price.

But without some testing, you can never know if a system has positive expectancy even though that testing is flawed. But it is better to base your trading on a system that has shown its worth than to trust a non-tested system with your real money?

Kaveman you have raised some good points.

Backtesting stocks in different conditions and time frames surely would not be representative of future results. It, however, would determine one's positive expectancy or negative expectancy - the predominant aspect of backtesting - with regards to one's system. That I do agree with.

Paper trading is not something traders should base their trading philosophy and methodology on though. Only real experience can help shape this, which has always been my point.

Snake

 

[It's Snake Pliskin]

Re: Beginner

What's wrong with the doll thing???

It won't kiss me!

Snake

 

[Bobby]

Re: Beginner

I agree with points in both.

Papertrading shouldnt be confused with systematic or system trading--

I certaintly agree with Kave to trade in any way without having an idea if at the end of a period you'll be nett profitable is just plain crazy.
97% do it-- one or even a dozen winning trades doesnt guarentee a consistent profit. But I'd rather travel with a road map that was correct at the time of printing than with none at all!!

Nothing is guarenteed in the market place---well in the short term possibly however in my lifetime 51 yrs Buying and holding most of the top 100 stocks GUARENTEED profit. I can also guarentee every trader that if they,

(1) Have more winners than losers

AND OR

(2) Have bigger winners than all accumulated losers

They are guarenteed to be nett profitable.

As for paper trading not being accurate that is entirely determined by the recording skill of the trader using it and the period of time you test it.

Finally traders who do not exhaustively test their methods could well be dis allusioned---
The discretionary trader with no testing normally finds himself locked in losses as he cannot afford to take the loss,rather than locked in winners reluctant to take profits!.

Yes Paper trading ISNT THE answer I agree whole heartedly but can be the basis of a methodology.I think new traders without the technology are really up against it.

There are a whole lot out there without a map.

Hi Tech,
That road map you talk about that 97% don't use, think I need one , can you recommend a book on how to get the maps ?
Hope you know what I mean .

Cheers Bob.

 

[bullmarket]

Re: Beginner

Hi Bobby

There are heaps of books on charting, fundamental analysis etc etc but one that goes a bit deeper and takes you though a step by step process in putting together what you know about charting and fundamental analysis into a written trading plan (roadmap as mentioned in other posts) is "Trading with a Plan" by Compton and Kendall....a very good read imo.

Good luck

bullmarket

 

[tech/a]

Re: Beginner

Hi Tech,
That road map you talk about that 97% don't use, think I need one , can you recommend a book on how to get the maps ?
Hope you know what I mean .

Cheers Bob.

Bob about 5 yrs ago a few of us posed the same question and came up with an answer.
This is the result and its been traded for 3 yrs +.

The method is called Techtrader but more than the method the search and the understanding of What makes any trading method profitable is way more important than the methods success.

I'm nearly finished a summary for the site below as there are over 1500 posts for new people to wade through.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

Even better its FREE.

 

[Happy]

Re: Beginner

Providing you can put up with the format

 

[Bobby]

Re: Beginner

Tech :
Thanks for the link, have registed & now wait approval so as to read your map!.
Much appreciated.
Bob.

Bullmarket;
Nice of you to give that information.
Thankyou .
Bob.

 

[tech/a]

Re: Beginner

Providing you can put up with the format

Dont know whats happened there.
I posted 4 sections of the Summary and only the code section remains.

The first 3 have disappeared on my screen???

I've mailed Nick so Will see.

 

[RichKid]

Re: Beginner

Dont know whats happened there.
I posted 4 sections of the Summary and only the code section remains.

The first 3 have disappeared on my screen???

I've mailed Nick so Will see.

Tech, will be good if you could post the same here in a new (eg 'Techrader summary') or current techtrader thread- thanks in advance. It won't disappear, Joe is very careful to preserve material and keeps an eye on technical glitches.

 

[zarfius]

Where to begin?

Hi

I am interested in learning more about short term trading (not day trading, more weeks or months).

I realise that what I am asking can take years of practice and I'm certainly not going to blindly jump in and trust any particular method. I also realise that there is no such thing as 100% certain when it comes to trading.

What I am looking for is some tutorials on the basics of picking, entering and exiting short term trades. I'd like to learn more about how each of the indicators work and how to put a probability on price movement.

This might be in the form of book's or online tutorials, or maybe I just have to keep asking questions but I'm sure getting you guy's to point me in the right direction is better than blindly googleing for answers

 

[doctorj]

Re: Where to begin?

At the risk of sounding like a wanky walking cliche, I think the best place is to sit down and work out some goals.

Have a think about what kind of returns you'd like to get, what risk you're prepared to take and what drawdowns you can tolerate.

These inputs will begin to define the what and how aspects of your trading and then you can better direct your efforts toward which instruments/markets/indicators/methods you're going to study. As you study you can refine your goals and at the end of it you should have some sort of workable trading plan.

 

[zarfius]

Re: Where to begin?

I have been thinking about my goals.

Without using the wanky walking cliche "I want to be a millionare" lol
but seriously..

Long Term Goal:
By the time I retire (sooner rather than later ) I want to be living off "passive income". By this I mean, dividends, rental income and income from shares in my own business.

I realise that's a bit of a broad goal since I don't really know how much money I am going to need to live the lifestyle I want.

Short Term Goal:
My short term goal by the end of the year is to have the skills required to make a few trades during the year to increase my return compared with a buy and hold strategy.

In the short term I am only concerned with getting the hang of some strategies in practice mode, playing sharemarket games, watchlists, and backtesting.

 

[Infest]

Where to begin?

Hey guys. Currently discussing about investing in shares on another forum and was pointed in this direction.

So, I was just wondering, where do I start? I don't know much of anything when it comes to this kind of stuff. I want to start with $1000 and go from there. I was told "Managed funds". Is this a healthy choice? Can anyone recommend me anything better? I only just turned 18, therefore am a bit tight with money. I have also just created a term deposit ($30,000) so this have left me with just over $1000.

Any recommendations and advice would be extrememly greatful.

Thanks guys.