New to the stock market: Where do I begin?

[beamstas]

Re: Green Beginner

Hi every one.
recently i have inherited some money and have to admit that looking at them sitting in bank account is like watching the grass grow.
I would love to invest (trading) in shares, but i have to say i am at the same question you all have at the beginning.
Where do i start ?
I did have webinar with elite traders, but the starting cost (over $4500) is pretty much to high. They do have learning curve of 21 days to get you trading and SMS alert advice on margin stock.
Is there any book (first steps) any one could recommend for a beginner ?

Appreciate your help.

Regards

Medici

For a total beginner i'd read Adaptive Analysis By Nick Radge or maybe even Share Trading by Guppy

 

[Julia]

Re: Green Beginner

Before you buy any books, or even faintly consider buying any of the multitude of stock picking programmes out there, read through all of the Education section on the ASX website so that at least you know how the market works, what the lingo is etc.

www.asx.com.au

 

[Boggo]

Re: Green Beginner

Before you buy any books, or even faintly consider buying any of the multitude of stock picking programmes out there, read through all of the Education section on the ASX website so that at least you know how the market works, what the lingo is etc.

www.asx.com.au

Agree, and when you do decide on your first book I would suggest Stan Weinstein's Secrets for Profiting in Bull and Bear Markets while using free software such as Incredible charts (http://www.incrediblecharts.com/online_charts/free_download.php) to practice the application of the theory.
There is also a lot of useful info under the Education tab on that site.

Then read the first 30 or so pages of Adaptive Analysis by Nick Radge again and again until you are capable briefing someone on it.

Once you have done that then you will be capable of knowing what you are being sold as a training course and will be able to recognise bulldust at 100 paces.

I remember reading somewhere years ago that trading is like walking a tightrope, and that paper trading is like walking a tightrope while it is lying on the ground, you have to do the latter bit first though otherwise you will just lose your mula and will end up doing it anyway.

That's my

 

[GumbyLearner]

Re: Green Beginner

Just don't buy anything involving Malcolm Turnbull.

He used to make bucks logging the Solomon Islands. But remember it's all Krudd's fault, not Turnkrudds!

 

[kam75]

Re: Green Beginner

Take the advise of Boggo and read Weinstein's book. It's brilliant. I remember back in 2003 when I first read it. Stan's a great writer and his book "The Secrets to Profiting in Bull and Bear Markets" easily rates as one of the best books ever written on how to trade profitably in the markets. It will far outclass any $4000 share course.

 

[Medici]

Re: Green Beginner

Lots of info.
Appreciate your help
Looks like my education starts tomorrow.

Thank You All

Medici

 

[Mr J]

Re: Green Beginner

I'd only suggest trading if you're going to take it quite seriously. Most investors don't seem to.

 

[brianwh]

Re: Green Beginner

I have just had a "google" around but couldn't find what I was looking for but there are figures around that suggest that something like 90% of traders (as opposed to investors) go out backwards within 12 months. I know these figures sound a bit scary so maybe I have it wrong. It might have been in something Marcus Paddley wrote. Anyway somebody else may have better information.

 

[Semillon]

Re: Green Beginner

Is there a particular reason you are looking at trading as opposed to longer term investing?

 

[Mr J]

Re: Green Beginner

I have just had a "google" around but couldn't find what I was looking for but there are figures around that suggest that something like 90% of traders (as opposed to investors) go out backwards within 12 months. I know these figures sound a bit scary so maybe I have it wrong. It might have been in something Marcus Paddley wrote. Anyway somebody else may have better information.

The often-quoted figure is that 95% of traders lose. This has probably been misinterpreted and/or exaggerated, but one stat I did read was a brokerage report where apparently 70%+ of their clients were losers over a certain period. The figure itself doesn't matter, as the fact is that most people cannot trade profitably. There are many reasons why a trader may fail, such as being overly-aggressive, lack of willpower (i.e. give up), lack of effort, lack of skill, lack of mental fortitude, inadequate capital or management, simply unlucky etc.

The odds are against you, but you can improve them significantly by taking it slowly, becoming informed, and becoming comfortable.

Is there a particular reason you are looking at trading as opposed to longer term investing?

Because he hopes for a proper return on his capital :.

 

[Medici]

Re: Green Beginner

Well...
I am a independent person and hate to see my retirement days depending on government scrappy pension.
Yes i am serious about trading and as i stated my learning begins today (already placed order for some books).
I also understand risk involvement with trading, but i will not get anywhere if i sit on my bum and do nothing while i have chance to improve my social situation (being not dependent on pension only).
I have to admit that being a little conservative, my choices of stock would be ASX 200.
In the time when all stocks went down i did not have the money to get my shares, but i told all my friends that " this is the time to get shares - BHP and RIO - Westpac and NAB" as my feeling has been of only minor down in shares value.
And yes, i was right. If i did have money then i would make some good return on my "investments".
But, this is history and now is a new chapter. I do have some money and i believe that with good home work and study i will achieve my goals.

Medici

 

[johenmo]

Re: Green Beginner

....i believe that with good home work and study i will achieve my goals.
Medici

A lot depends on how involved you want to be. Amibroker is a great programme - cheap - but you have to learn to programme, But even just basics as getting price and volume is relatively easy. Can download a trial version which is fine for me atm.

Preparation beats luck most of the time.

 

[jono1887]

Re: Green Beginner

There is really no need to spend alot of money on educational resources. Theres plenty free stuff out there on the internet and on this forum.

 

[Mr J]

Re: Green Beginner

It's good that you're motivated, as I think passive investing, funds, savings accounts etc are a horrible waste of capital. I read some books, but I mostly devoured everything on trading forums, as forums are an awesome source of information. Much of it is rubbish, but there are always gems to be found.

In the time when all stocks went down i did not have the money to get my shares, but i told all my friends that " this is the time to get shares - BHP and RIO - Westpac and NAB" as my feeling has been of only minor down in shares value.
And yes, i was right. If i did have money then i would make some good return on my "investments".

I wouldn't consider this a positive. Perhaps you do have an amazing ability to pick stocks on intuition, but it was likely just chance. There are a few concepts that a trader really should understand, such as probability, variance, and expected value.

Probability: The value given to any possible outcome of an event. Example, the probability of heads on a coinflip is about 50%. We realise that outcomes are not certain, and use this knowledge to adjust our ego and apply sensible risk management. A winning trade is not necessarily a good trade, as even a coinflipper is right half the time.

Variance: The measure meant of results deviating from the mean. Example, going flipping heads twice in a row instead of 50% heads, 50% tails. Why it is important? Shorterm results are misleading, and by shorterm I mean regarding sample size, not time. Even a coinflipper can win 5 in a row, or 30 out of 40. If the sample is statistically insignificant, then so are the results.

Expected Value: In trading terms this would be our expected profit or loss. It is formed by combining probability and price. More specifically, the size and probability our profits compared to the size and probability of our losses. Why is it important? Without it we will not profit over the longrun. We may experience good shorterm results, but we know that shorterm results are meaningless. Without a positive expected value, a trader can only rely on luck to succeed, and this is a very poor approach.

I think once a trader thinks about everything in terms of probability and price, the rest may fall into place.

 

[ilyuck]

Please help a beginner out!

hey every one I am 14 and I want to start investing in some stocks but I'm not too sure how much money I should invest because I have no clue about investing or the stock market but I want to start learning. do you think it is a bad idea for me to start investing so young? should I start with a few hundred dollars or save a couple thousand? how is the best way to learn all of these terms people are using? should invest independently or with an investment agency(is there such a thing? )? I'M sure these questions get asked a lot and I'M sorry if you are tired of them but I don't know who else to talk to about this

Thanks

Jake

 

[snsdmonkey]

Re: Please help a beginner out!

Haha firstly welcome to the forums little man. I bought my first stock when I was in Year 7, about 6 years ago. It was Newcrest and I did pretty well of it, went from $18 to $31 if I remember correctly. But in all honesty I knew nothing about the sharemarket even though I read the newspaper quite frequently.

14 is too young I reckon. Don't put in any money at the moment, I would say start off with at least 2k to do anything, 5k for anything remotely decent. You learn nothing in high school that helps you with stocks and most of the stuff on here is too technical for you at the moment. But you can always start early, ASX has sharemarket games for you to play which is a good place to start out. Try and take it seriously, don't give up if you lose money on it because it's fake and keep going. See how much you can make/lose.

Browse around the forums I guess to try and learn. Read some simple books, nothing on technical analysis at this stage and see how you go.

Feel free to PM me if you have any other questions. I've probably missed a lot of stuff as well so others feel free to critique my response haha.

Cheers

 

[johenmo]

Re: Please help a beginner out!

The market is in poor shape and very difficult for the proven. Spend a year or three red the education stuff on the ASX, do the ASX sharemarket game, you can get free demo accounts for currency trading. And threads here on ASF for (nearly) everything.

Learn the biggest hurdle you will have to overcome is yourself. There are numerous posts about books for beginners. The same messages are delivered. It's about finding a writing style that you gel with.

The bigger the capital base the easier it is to weather dips.

Whatever you do with shares etc, don't trade without a stop loss.

 

[So_Cynical]

Re: Please help a beginner out!

Whatever you do with shares etc, don't trade without a stop loss.

He wants to invest not trade.

hey every one I am 14 and I want to start investing in some stocks

The rest of johenmo's post was pretty much spot on.

Take your time, save your money, get a stock market education, enter the share market games, keep reading the financial papers and blogs etc....hang around this forum, find out what interests you and what your comfortable with..set up some watch lists and add stocks at the current price and keep coming back to see how your doin.

 

[snsdmonkey]

Re: Please help a beginner out!

He wants to invest not trade.

Probably doesn't know the difference LOL

 

[ilyuck]

Re: Please help a beginner out!

I think I know the difference investing is long term and trading is short term is that right if I'm wrong I will probably sound really stupid haha so I'm sorry for that