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Why is it so hard?

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stargazer

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Hi all

Over a period of time i have trying to gather as much info as i can to generate some income from the market.

At first it was buy some stocks they go up and sell etc well not much progress there as the market has gone done. On some occassions i did sell only to see the stock take off and miss nice profits. On the other hand i held on to stocks i should've in hindsight sold and of course they went down.

Then i looked at stocks with dividends well the dividends were not that great eg OXR and BPT so no joy there.

I started to look at options and just when i thought i had some progress with covered calls they appeared to be fairly low risk. Looked good for some monthly income but via this forum i was alerted to the risks. The volatility trap etc

Finally got to understand Calls and Puts etc but again lots of confusion and everyone telling me how risky it is if you get it wrong infinite losses etc

CFDs have been touted as very risky so have steered clear of these.

So as time goes by trying to absorb so much info i am getting more and more confused of which direction i should take to learn how to gain some income from the market.

Has anyone got any suggestions where my first base should be to try at least.

Cheers
SG
 
stargazer said:
Has anyone got any suggestions where my first base should be to try at least.
Click to expand...

Start with the end in mind. What do you want? What are you capable of? Is what you want realistic? The markets are a means to an end. If being in the market is the end itself then your mission is already accomplished

ASX.G
 
The best thing you can do IMO is to spend some time seeking out the most skilled people you can find to manage your money, and give 95% of your money to them until you've convinced yourself that you can beat their performance based on whatever trading or investing activities you do with the remaining 5%. Many of the best performing fund managers (eg Paradice) tend to focus their efforts on very wealthy clients, which is a shame for the rest of us, but there are other consistently high-performing funds (over 5+ years and preferably 10+) who will take your money.
I think this is the most logical thing to do (and the thing that no-one does), since it's very unlikely that relative beginners in the stock market are able to beat the most highly skilled value investors.
 
stargazer said:
Then i looked at stocks with dividends well the dividends were not that great eg OXR and BPT so no joy there.
Click to expand...

If I were looking at stocks with dividends I wouldn't be looking at the resources.

The financials and property trusts will give you far better yields.
 

The first two important steps a Newbie has to go through in what would have to be the most lucrative game going is,
1, realizing that they know nothing about the market and how it really works.
2, realizing that the work they need to do to become consistently profitable is immense and a long way off.

If after that point you are still interested then the obvious thing to do is set about educating yourself to get a broad based knowledge in market mechanics then along the way you should find something that sparks your interest that you can then specializes in. Only after that ,finding a niche and learn & practise till the cows come home, have you any chance. Bottom line you are probably a couple of years off, minimum.

Do you really think it should be easy?
 
Consider you are competing against people who are either much smarter (PhDs in statistics, etc) and/or have much more inside information. Than consider the markets are mostly efficient especially taking into account transaction costs (spread, commisions, taxes, etc) and even the smarter people find it very hard to make money.
Perhaps your best option is to invest your money in index funds and work on whatever skills you have in other fields to earn more income.
 

I wouldn't look into CFDs and Options when you start out.
I would

1. Understand the market, what makes it tick and what affecting share prices
2. Understand fundamentals of a business, know how to read their balance sheet
3. Buy on fundamental, try to identify stock that trades under its real worth

If you got all that yesterday and today should provide some bargain stocks for you to pick and often ample returns in a few years from now
 
Stargazer,

I read your post and can relate, as I am relatively new to the stock market (and these forums) as well. I'm also keen to try and find the best way to 'tackle the beast' and make some income with the long term goal of supplementing the income from my day job - I'd be happy with one day off a week...

While I don't know the 'best' way to go about doing it, the thing I've decided to focus on is to learn as much as possible about basic share price movements and technical analysis. I figure all the derivatives (options, cfd's etc) are all based on shares so a good understanding of share price movements should make it easier to understand derivative pricing.

I've been reading a lot of books on technical analysis and the two authors I've found most helpful so far have been Darryl Guppy and Leon Wilson. There is also a plethora of really useful information and market wisdom on these forums .

One thing these authors put me on to that I didn't think was so important when trading shares is the money management side of things. It isn't just enough to be able to make money from a share, you have to know how to keep it....

Also keep in mind that when the market as a whole goes down, that doesn't mean that some individual shares don't go up....

Cheers,

Geffro77

**No Advice, Just Opinions...
 
You need a MENTOR

Go find someone who is consistently turning profit,who has been where you have and is where you wish to go.

Pay for their tutorage if necessary.
Three things will happen.
You'll save masses of time.
You'll learn what you DONT need to know to be successful.
You'll find renewed confidence and profit.
 

Easier said than done tech :

Especially for those younger ones amongst us.
 
I'm sorry i couldn't resist, and completey off topic..

thats what she said

Sorry I've been watching the US version of The Office...
 
God question! Im in the same boat as you.Problem is so many factors can
effect a share price.You may have found a company with a great product and sound fundamentals but it drops b/c the MANAGEMENT are greedy fkn idiots (abc/eddy groves).

how can one do their research on management? not easy I suspect.

Peter Lynch says to invest in a company that even a monkey could run!


ceasar73
 
Share trading certainly looks easy - but we all know that its not!

If peoples' initial foray into trading is in a bull market and they have success they think that it is easy and that they should be able to repeat the winning process. In a bear or choppy market its a different story and its not so easy to start with a winner.

Most people only remember their successes and put any losses down to bad luck. Its often like gambling where the rush one gets with a winning hand spurs on punters to try and get that feeling again and again.

For long term and sustained success the solution is education. Starting to trade without knowing fully what you are doing is a recipe for failure and the loss of capital.

See other threads for psychology of trading, fundamental analysis, technical analysis, money management and limiting risk to retain capital etc etc.

It seems that when all else fails be a contrarian. If the majority of beginners lose money share trading, using options etc then it might be a case of getting your partner to trade your money by doing the opposite to what you intended to do.

i.e. if you were going to BUY BHP then tell your partner that and they can then SELL BHP. If you were going to buy a CALL then tell your partner that and they will buy a PUT - statistically that should work!! LOL
 
prawn_86 said:
Easier said than done tech :

Especially for those younger ones amongst us.
Click to expand...

OK then add this up.

(1) What have you lost in your efforts to turn a profit?
(2) What has it cost you in books,software,seminars data etc
(3) Allocate an hrly rate to your time---what have you spent there?

Now look forward forgetting tutorage---what do you think you'll invest in the 3 above in say the next 2 yrs.

Now divide both time and price by up to 75%---I'll bet you cant afford NOT to.

Finally if your serious about turning a decient profit you'll have to invest a decient amount in your apprenticeship.If you were to buy a business that gave you an income ONLY---say $55k a year NETT you'd need to invest around $150,000 + stock and Equipment.

What makes everyone think that the hardest business in the world (95% fail)can be entered into profitably for peanuts.

If your going to be in the top 5% then you had better do something different to the OTHER 95%.

Infact its easier and less expensive than you can imagine.
The biggest problem will become Capital base.

If you dont have a decient one then trading for a living is an unrealistic expectation---which your Mentor will tell you before you invest a cent!
 
Peter Lynch says to invest in a company that even a monkey could run!
Click to expand...

Does Andrew Symonds have a listed company?---only kidding
 
heheheheheh...maybe this the new way to invest - find an idiot and buy
into his/her company!!?!!

ceasar73
 
Good one Tech.

I think Andrew is doing alright for himself now!
 
ceasar73 said:
.You may have found a company with a great product and sound fundamentals but it drops b/c the MANAGEMENT are greedy fkn idiots (abc/eddy groves).
Click to expand...
Eddy Groves ,on a lot of these forums is the village idiot. REMEMBER THAT HE WAS DOING EXACTLY THE THING THAT A LOT OF HIS CURRENT CRITICS ADVOCATE....... USING LEVERAGE AND OTHER PEOPLES MONEY TO GET RICH QUICK. It backfired for him . Will it eventually backfire for most who trade that way. Give the guy a break.
 

Agree Nioka. A few weeks ago Eddy Groves was probably considered a successful businessman, but because the leverage backfires, now considered greedy...

Happens time and time again - if heavy leverage works, it's considered successful. If it fails, then it's condemned and called greed.
 

Agree too, Tech - but that's IF you can find one. It was the need for education that got us sucked into paying extremely high prices for seminars a few years back that, in reality, taught little more than the basics.

In options trading, I have learned far more from free material (or much lower priced material) available out there in addition to scouring dedicated options message boards / forums mostly based in the US. After a while, you get to know those who are above average. Then thoroughly tested any ideas or concepts learned with both backtesting where possible and in real time. Very time consuming, but in the absence of a mentor, found no other way. IMO, mentors are not only difficult to find, but also difficult to differentiate between the real thing and the abundance of overpriced, well marketed rip offs.
 
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