Newbie at the start

[moneynuts]

Hi, another newbie on the forum. I’ve been reading this forum for a while, and finally I decided to post my questions. I really appreciate all people efforts that are going to give an answer for my questions or at least make it clear for me.
So far I read so many books about trading and I still don’t feel comfortable. For the beginning I want to find out what is the diffesence between the brokerage. For example, nowadays we can purchase shares via internet by using comsec, Anz (etrade) or St George. Also I found that there is some on-line brokerage firm. Also I red in a book that you can trade at brokerage office or you can get direct line to home with real time changes on the market (not sure about it). So can anyone make it clear for me? Basically I want to try to trade on my own.

Now I want to ask what the difference between trader and speculator is. On this forum I found that to become a full time trader or trade on your own you need to get a license. Can anyone tell me what this license for, how to get it is? And do I really need it for a short trading?
Here is one thing to come, how do u people keep track of your trading movements (portfolio). For example do you have any software for it? Lets say may be excel sheet? Any suggestion how to keep a track of your transaction profit and loss.

Thank you very much for your time to explain it to me and sorry if i posted some silly questions.

 

[carpets]

welcome moneynuts
I dont have all the answers to your questions but could tell you a little bit about how i trade.
i use st. george directshares and do all my trading, research etc. myself. their brokerage is about 27.95 per trade which is pretty good compared to other online trading accounts. some of the guys here have been complaining about difficulties with the NAB online trading, new fees, website difficulties and so forth, but my old man uses that one and finds it pretty good. some have different options and features so its a matter of finding whats best and what price your willing to pay for brokerage.
not sure about needing a licence to trade on your own, i do all my trades myself (through direct shares) and have never heard of needing a licence, are you talking about something else?
I know there is some pretty good software out there to track your portfolio, but i like to keep it simple and use excel spreadsheet to track buys/sells, profit/loss. you can set it up how you want and seems a relatively easy way to keep on top of things. i also rely pretty heavily on looking at charts. i am yet to purchase any charting software but have found incredible carts pretty good.
Carpets

 

[Julia]

Hi, another newbie on the forum. I’ve been reading this forum for a while, and finally I decided to post my questions. I really appreciate all people efforts that are going to give an answer for my questions or at least make it clear for me.
So far I read so many books about trading and I still don’t feel comfortable. For the beginning I want to find out what is the diffesence between the brokerage. For example, nowadays we can purchase shares via internet by using comsec, Anz (etrade) or St George. Also I found that there is some on-line brokerage firm. Also I red in a book that you can trade at brokerage office or you can get direct line to home with real time changes on the market (not sure about it). So can anyone make it clear for me? Basically I want to try to trade on my own.

Now I want to ask what the difference between trader and speculator is. On this forum I found that to become a full time trader or trade on your own you need to get a license. Can anyone tell me what this license for, how to get it is? And do I really need it for a short trading?
Here is one thing to come, how do u people keep track of your trading movements (portfolio). For example do you have any software for it? Lets say may be excel sheet? Any suggestion how to keep a track of your transaction profit and loss.

Thank you very much for your time to explain it to me and sorry if i posted some silly questions.

Hello Moneynuts:

No such thing as a silly question when you are starting out imo. I still ask silly questions.

Have you visited the ASX (Australian Stock Exchange) website? www.asx.com.au It has a wealth of information about the stock exchange, fundamental and technical analysis, investing and trading shares and much else. Personally, I don't think you should commit yourself to anything until you have worked your way through this site and possibly participated in their Education sub-section.

I use E-trade which, with GST, works out at $32.95 per trade for up to 10 trades per month and reduces o $24.95 for over 10 trades.

I can't comment on the other online brokers, (i.e. Comsec, NAB, etc.) but if you are an E-trade customer you have automatic access to research from I think 6 broking houses (including Huntleys which I think is the best), plus many other features including charting (graphical representation of share prices etc over various time frames). I find I don't need any additional software as my "Portfolio" screen can be customised to show whatever I want, e.g. no. of shares, cost price, yield, last price, + or - from yesterday's close, total market value etc etc. You might like to visit www.etrade.com.au for a sample look at what they offer.

I've never heard of a trader needing a license, but I'm a long term investor. Other forum members who are short term traders will be able to help you on this.

I'm not sure from your post whether you know there are two types of brokers. Full service (they offer you advice, their own research and huge brokerage charges, e.g. up to $1000 per trade on a large $transaction). Or online brokers, eg e-trade, comsec where, although you can access research, they provide no ADVICE but are very cheap. All this sort of thing is covered on the ASX website.

My suggestion would be not to go risking any actual dollars in the market until you feel you have a reasonable understanding of how the market works and what your trading plan is going to be.

With best wishes

Julia

 

[bullmarket]

Hi and welcome moneynuts

:iagree: with Julia's and carpet's comments.

In addition, whether you use an online or full service broker is a matter of personal choice according to your requirements and circumstances. When I was in the work force I used JB Were as my broker (full service broker). Now that I have more time on my hands to do my own research etc etc I use an online broker. I use Commsec as my online broker. If you haven't chosen a broker yet maybe have a look around http://www.comsec.com.au for info on the services they provide and their brokerage rates.

Re licences you mentioned - my understanding is that someone needs a licence if they intend to give financial advice and charge a fee for it. If you want to trade/invest from home then you don't need a licence. But then if you set yourself up as a company or some other structure is again up to you depending on your circumstances. As Julia suggested, maybe have a look at the ASX site where there is heaps of information on how the market works, free online courses etc etc.

Good luck and if you have any more queries just fire away and I'm sure people will help

cheers

bullmarket

 

[bvbfan]

1st - Brokers

You have a wide choice of brokers to choose from, I've used westpac, comsec and netwealth
Set up wise, Westpac then Comsec were the easiest, Netwealth although the cheapest for broker was a major hassle, cheap and nasty is apt

From the brokers you can get various types of data. Real Time and delayed
Real time you can get as either manual or automatic, that is the manual data is provided when you request it by refreshing. The automatic data or dynamic data occurs as the market changes.
Delayed means that the information is what happened 10mins or given time period before.

With brokers you also have 2 types of order placement and execution, straight through processing (STP) where the orders go directly onto the ASX trading system called SEATS. The other is the order goes to the company back office and they place the order into the market for you.
STP is very quick and a must have in my opinion for any broker.


2nd - Trader vs Speculator

Trader usually has a set plan that they stick to, they have criteria for entering and exiting a trade
A speculator basically tries to pick the way a security will move profit from that

3 - Licences

To be a trader on your own account you don't need to have a licence. A licence is required when you are providing financial advice or a service.

4 - Short selling

Generally short selling is not encouraged and the online brokers don't offer it
You'd generally need a full service broker to do it and there are some criteria they require you to meet.
Best way to go short is through derivatives like CFD's, futures or options.

5 - Portfolio tracking

I use Quotetracker to track my portfolio daily, Comsec allows me to download the trades I may into a spreadsheet which I use to calculate profit/loss (I don't trade frequently enough to warrant any more costly programs)
I just match you contract notes and work out profit or loss from there then sum them on spreadsheet

Hope that answers your questions, if not feel free to ask. I'm sure others can help if I've missed an area

 

[GreatPig]

Moneynuts,

we can purchase shares via internet by using comsec, Anz (etrade) or St George

There are quite a few more online brokers than just them. Take a look at Infochoice.

or you can get direct line to home with real time changes on the market

You just need an Internet connection, preferably broadband if you want to trade regularly, and sign up with one of the online brokers.

Dynamic data (where updates occur automatically in real time) is typically a premium service, meaning you either have to pay more for it or do some minimum number of trades per month. Unless you want to be a real short-term trader though, like intra-day, you shouldn't need anything more than End-Of-Day (EOD) data.

how do u people keep track of your trading movements (portfolio)

I use some software I wrote myself. It's available in this thread for free. Go to one of my messages near the end for the latest version. Other messages in the thread also mention other software options.

GP

 

[moneynuts]

First of all I want to say thank you very much to all of you who posted and make my mind a bit clear. Would it be possible to get an advice from you what is the best to start with CFD futures warrant or options. I don’t have any exp in stock market so I need to start from something and dig it in.
Looking forward hear from you 

 

[Julia]

First of all I want to say thank you very much to all of you who posted and make my mind a bit clear. Would it be possible to get an advice from you what is the best to start with CFD futures warrant or options. I don’t have any exp in stock market so I need to start from something and dig it in.
Looking forward hear from you 

I'm sure others will endorse my suggestion that you start with ordinary shares first. Why would you be looking at the other alternatives at this early stage?

Julia

 

[bvbfan]

Would it be possible to get an advice from you what is the best to start with CFD futures warrant or options. I don’t have any exp in stock market so I need to start from something and dig it in.
Looking forward hear from you 

Start with ordinary shares as the risks (you can only lose what you put in) are much less than the other options where you can lose more than you put in

Also need to understand the underlying before you start to play with the derivatives of the underlying

Paper trading, maybe do some research on different stocks and hypothetical buy them and monitor them over the time frames you intend trading.

Read a few books, ASX site is a pretty good start, they used to have a guide to investing in the share market that gives a good explanation of terms, you can probably download it now

Before you start you should find a method you want to use to buy/sell stocks

 

[surelle]

go easy moneynuts,
start with shares, and when you feel that you have a grasp on trading them, you can tackle the CFD's

best of luck
cheers

 

[warezwana]

My wife and I use OptionsXpress as our broker as we find the platform fairly easy to work with and the fact that once you have joined you get to papertrade or virtual trade until your more than confident (no 1 month trial like many)

Do people here have problems with OptionsXpress.. I thought somebody would have mentioned it well before Comsec and definately ANZ's Etrade..

Also (to the experienced punters out there) what is considered the best way to enter the markets (as in the most simplest to understand)... Obviously buying 'stock' would be the easiest to grasp I think in my eyes, but what comes next? The tricky world of Options? I don't think you have to be shown too many times to be able to place or understand how to place a Put or Call. Making it a winner is a whole nother story but the actual placing has to be easy enough for most... IMO