Introduction

Ratbag

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Dear all,

This is my first post and a chance to say a quick hello to you all.

I have never traded in my life but I am interested in looking at it.

The situation is that I have a full time job, so day trading is out of the question. I'm only now starting to get to grips with some of the jargon and I feel sometimes like I'm reading a foreign language!! :|

There is such an overwhelming wealth of information here that it is hard to know where to start. I have started reading some of the 'stickies' on this but they are soooo long...I will persevere tho'

Anyway, is that the best place to start? I guess I need charting software? Where do I get that? Where is a good place to start practising before risking real dosh?? What else do I need?

Also, as I don't have the chance to do this full time, can I assume that trading on a slightly linger term basis is worthwhile and can be managed sensibly?

Sorry but I have so many questions and very few answers....

If you get time to answer any then thanks..

All the best,

RB
 
Welcome Ratbag,

Daytrading being out is not necessarily a bad thing: a newbie can get hypnotised by the moving charts and it's much easier to look at things outside the heat of battle with end-of-day data. Most brokers will give you charting software as part of the service, although some have better functionality than others. Whatever your views on spreadbetting, Finspreads have a pretty good 'training academy' where they allow you to play for peanuts (1p/point) while learning the ropes. Forget about them for serious trading though. Otherwise there's no short cut - look at a year or more of hard-graft before you start getting the hang of it. Avoid anyone promoting fool-proof systems or tips services. It is a hard road...but good luck. And there are plenty of good resources on T2W for free.
 
Thanks Jack. I'm not sure I want to do spreadbetting but more trade in actual shares.

I would like to parctise first though. Any good sites for that?

Also is there any free charting software available or do I need to pay to get something half decent?

Cheers

RB
 
Try the Saxobank 'SaxoTrader' platform - free demo account for 20-days and quite a nice platform. As I said in my original reply nearly all brokerages or s/b firms will go you access to charting when you open an account with them. Digitallook.com is quite a good source without opening accounts, also ADVFN.
 
Thanks Jack. I'll take a look at those.

Good point Mr. Charts...I'll take a look at that option too.

Can I practise on US stocks?
 
I'm not quite sure what you mean by "practise on US stocks".
The following is an extract from my site which explains the advantages of day trading US stocks.

""So why do I trade like this?"
The prime mover market in the world is the US one. Here in the UK we are essentially influenced by the US economy and its stock market. How many times, for example, have you seen the London market open at a level dictated by what happened in the US the previous evening after London closed?
Of course, the Far Eastern and European markets have an influence, but although they, like the UK, do have substantial domestic and local factors, they are also largely driven by the United States.

Clearly there are advantages to trading the principal world stock market rather than the others. For example, you are in at the beginning of a move, seeing the immediate reaction to changing dynamics and trading accordingly, rather than after everyone else has had the opportunity to analyse and digest those factors and then position themselves appropriately.

The US is open from 0930 Eastern to 1600 Eastern, 1430 GMT to 2100 GMT. For the full time trader in the UK or Europe this means a large part of the day’s trading takes place in our afternoons. The US lunch time usually tends to be somewhat choppy on about 70% of days, so that provides a good break from around 1700 GMT to 1900 GMT.
The US afternoon then starts and coincides with our evening here in Western Europe. During those last one or two hours there are frequently excellent moves to trade profitably and consistently.
Of course this provides an ideal opportunity for those who have a day job to start trading the US afternoon after they arrive home from work.

You can start your trading career in the evenings in tandem with your normal job and gradually build your trading capital, knowledge and experience until you yourself feel ready to take the plunge and trade full time for a living.

Many people reading this will be in various stages of their trading life. At one extreme there will be those who know a little or nothing about technical and fundamental analysis and have little experience of real live trading. At the other extreme there will be many readers who already trade full time for a living and wish to expand their abilities and profits and also the type of instrument they trade.
They would prefer not to work for others but to reap the fruits of their own skills with no-one looking over their shoulders, telling them what to do, being critical, having corporate or institutional ladders to climb and so on.
There are other vital elements too, including spending more time with family and friends and enjoying the things in life that matter to you most of all. Just think of being able to work from home and never having to commute again!

Let’s look in a little closer detail at some of the many advantages to trading US stocks intraday.

· Plentiful opportunities compared with other markets.

Some people think shares must be a great deal more difficult than Forex, currencies, commodities, index futures etc. I don’t see it that way. For example consider futures or Forex pairs. You only really have a handful of liquid trading instruments in these types of instruments. With stocks there are literally thousands of trading vehicles. This means thousands of opportunities to find the type of stock you are looking for, whether they are trenders, reversers and bouncers, whatever. What percentage of the time does a Forex pair or an index actually spend trending rather than sitting in a range? Only a minority. Remember that apart from a few option strategies you will only actually have the chance to make money when your trading vehicle is moving.
No movement = no potential profit.
Money tied up in stagnant positions is money not earning its keep. Most people employ methods which take them into mediocre probability positions because they are constantly looking for a reason to take a trade in their chosen index, Forex pair etc. because there are so few high probability situations available – their universe of choices is severely limited.
Compare that with the many thousands of stocks available to trade. In that far greater universe it is so much easier to find trending vehicles – ones that are actually moving in a clear readable direction. You are now in a scenario of choice and opportunity.
Many people fear they might be overwhelmed by that choice. They worry they will be swamped and unable to find the right stock to trade. Well of course there are ways of finding what you are looking for in this business – and it is a business – just as there are ways of finding most things in life if you know where to look.

· Stamp duty

The United States Treasury does not believe in taxing people 0.5% on every trade they do. They want a vibrant economy and stock market and to encourage their citizens to take part in their great capitalist enterprise. Even as a non - US citizen you too have the chance to participate in their markets.
And you pay normal UK taxes, not US taxes – but you don’t pay "stamp" duty.

· No overnight risk

The great beauty of intraday trading is that you finish the day flat. You have no long or short exposure. You do not have to worry about any event causing the market to gap one way or another between market close one day and open the following day.

This is a very real risk and is considerably more likely than you might think.
It is not only a matter of some terrible terrorist strike like 9/11. There are a whole host of risks which can and do cause financial damage overnight and in my opinion that risk is simply unacceptable.
For example the oil price might leap up – just consider the volatility in oil in 2004. This normally causes most stock prices to gap down. There are many geo-political events which strongly influence markets, threats of war, (although markets tend to rise once wars start), decisions by Central Banks, changes of government and so on. Only very recently the Shanghai index took a 9% overnight fall and damaged markets around the world.
And then we have more market specific factors. Has a major investment bank upgraded or downgraded a stock or set a raised or lowered price target or revenue or EPS figure? Perhaps the company has come out with results or unexpectedly altered their guidance for the quarter or year or even announced a vital new contract has been gained or lost. Perhaps a major company in the same sector has announced major news and many companies in the same sector might be affected.
Or perhaps they have announced that their Chief Financial Officer has resigned with immediate effect to spend more time with his family on their island home in a state without an extradition treaty with the US…
Most of these things are unpredictable and you are vulnerable to them if you hold positions overnight. In effect you are reducing your control over your funds and increasing the level of risk from the unknown. Why should you do that as a day trader? People do because they get greedy and hope and wish their position will become more even profitable if they are long by gapping up on the open or if they are short they hope and wish it will gap down. To me this smacks of gambling and if you succumb to that so-called entertainment and thrill you will eventually lose your money. Go to Las Vegas instead. I’ve been and had a great time without gambling a single dime.
The markets are about steely self discipline and "wish" and "hope" are four letter words which have no place in this business.

· Almost instant fills

I’ll discuss CFDs and Spreadbetting briefly a little later, but I trade using Direct Access. This means you are trading directly into the Nasdaq market with other participants. You see on your level 2 screen the other market participants and once you understand how to use it you can sometimes see what is going to happen before it appears on a chart. Under US regulations you must have a minimum of $25,000 in your account to be able to have unlimited day trades in any one day. You also get 4:1 gearing so that amount lets you trade up to $100,000 of positions. Under $25,000 and you are limited to three days in any five day rolling period. These rules do not apply to CFDs and spreadbetting.
One of the great advantages of Direct Access is the speed of fills. If you place a market order your fill with the broker I use is normally under one second. In a very fast moving market it might be as long as four or five seconds, but that is exceptional.
The implications are obvious, you suffer very little slippage and normally get your fills at or extremely close ( a cent or two) to the price you see on your screen.
Without a doubt Direct Access is the way to go for a professional Nasdaq trader.
The Nasdaq market is fully electronic and the NYSE partially, and fills are first come first served so again it is much more transparent.
The spreads between bid and offer with CFD/Spreadbetters are normally larger but with some companies there is no commission to pay.
The number of stocks in which the CFD/Spreadbetters make their own market is also usually limited so that results in a reduced universe of stocks you can choose from. The great advantages are the ability to trade with far smaller capital, perhaps only £2,000, and much larger gearing, 10:1 or even 20:1.

· Tiny spreads

In active heavily traded Nasdaq stocks the spread between bid and ask is normally one cent. Yes, that is correct, one cent. In some stocks it can be slightly larger. In others, particularly recent IPOs and very speculative stocks the spread can be 15 cents.
However, Direct Access allows you to almost become a Market Maker yourself. You can buy on the bid by placing an order one cent better than the existing best bid and you then become the next in line for someone to sell to. Having bought your shares you can, if you wish, immediately put them out for sale on the offer side, probably at a level 15 cents or so higher, thus making the spread for yourself, i.e. almost being you own market maker. Get plenty of experience trading more conventionally before venturing down that route, however.

· Tiny commissions

Direct Access, is in my opinion, extremely cheap for the trader. The broker I use charges $1 total round trip (50c in and 50c out) for trading 100 shares and $10 total round trip ($5 in and $5 out) for trading 1000 shares. It can easily be seen that this sort of fee structure enables a learning trader to start small and safely with minimum risk and gradually scale up position size as experience and success build confidence and profits.
These low charges also enable you to trade much more efficiently and with far less concern. After all, with fees like those you no longer concern yourself with the actual cost of exiting a trade which might be going against you. If it turns back in your favour you can always re-enter for minimal cost. That sense of being reluctant to exit and re-enter again because of high commission costs is simply non-existent.

· Technical analysis and transparency

My experience of using technical analysis on both the UK and US markets is that it does work much better in the US.
Over there it is a normal, accepted way of helping to understand market movements and sentiment. Although its use in the UK and Western Europe is steadily growing it is still decried by many amateurs. Naturally enough, the more something is used the more it becomes a self fulfilling prophecy. Indeed the US use of technical analysis is more sophisticated than in Europe and its limitations better understood.
I am also convinced by experience that their markets are a great deal more transparent than others. I do not deny a lot of things go on in America which are less than open, but compared with this side of the pond, the regulations are stricter, the oversight more sophisticated and keener. Federal and exchange rules are becoming progressively tighter and the imprisonment of many high profile individuals and fining of corporations is leading to a rush to openness. This is an approach we would do well to emulate.

I think you can probably see why I much prefer to trade the US intra day. I suppose I am a little bit of a control freak with my trading funds. I like to trade in as “clean” and transparent an environment as possible and want to minimise the risk from the unknown. I find it difficult to understand why anyone would want to do otherwise."

I'm sorry if the above is slightly disjointed, but I've removed some comments to stay within t2w guidelines.
Anyway, I hope the above leads you to considering the merits of US trading. I used to trade the UK, but the US is so superior.
HTH
Richard
 
Ratbag said:
Also, as I don't have the chance to do this full time, can I assume that trading on a slightly linger term basis is worthwhile and can be managed sensibly?
Hi Ratbag,
I suspect the above is a a straight forward honest typo' error, yet, albeit unwittingly, you may have spawned a whole new trading category: 'Linger Trading'. I think it might fall somewhere between day trading and swing trading which, from your opening post, may suit you very well! :cheesy:

To respond to yor original question, the answer must, ultimately, come from you. The two people who have replied to you so far are, IMO, both in the top 0.2% of T2W membership worth listening to. That said, some folks may infer from their posts that they contradict one another. Actually, they don't; both are correct in their comments. The choice of markets, instruments, timeframes and brokers etc. is a personal one. There is no right or wrong approach: it's all down to what works best for you.

For every view expounded on this site, there is someone with an opposing opinion who voices it with equal exuberance and learning. It's a bit like politics: there are very few absolute truths about which everyone agrees - unanimously. For a long time I found this as irritating as I did perplexing. I have come to realise that it is really quite liberating. You can express both your personality and creativity via your trading in a way that would be almost impossible to do via the 'normal' professions, e.g. medicine and law etc. However, like most things in life, there are some basic ground rules worth getting to grips with. And a good place to start in this regard is with the Knowledge Lab.
Good luck.
Tim.
 
. The two people who have replied to you so far are, IMO, both in the top 0.2% of T2W membership worth listening to.
Good luck.
Tim.[/QUOTE]
as you can see sometimes this site is more about jabs than trading,you can go to bigcharts.com,(free) and learn how to connect tops and bottoms for support and resistance,there is also some educational stuff on there,support and resistance is trading 101
 
ammo said:
as you can see sometimes this site is more about jabs than trading. . .
Far from being a jab, ammo, it was intended as a complement to J.O.C. and Mr. C'!
Tim.
 
Big thanks to Richard for your lengthy but welcome explanation of the attractions of the US market. And thanks also to timsk for your contribution.

The situation for me is this:-

I work full time and I sometimes need to travel abroad for my job. I also can't get home before 7pm.

I have a wife and now my kids are grown up, I enjoy spending time with her.

I have some 'spare' cash that I would like to use to trade. It isn't in the $25k bracket and my wife would be VERY unhappy if I suggested committing that much to this venture.

My plan would be (once I know what the heck I'm doing!!) would be to start small and get the hang of it and learn how to limit losses etc. After that, as I feel more confident would be to increase my stake accordingly. However, I will never be risking more than I am prepared to lose.

I have some money in ISAs of various kinds...some cash, some tracker and some managed. It isn't a great deal of money but I guess it is reasonably 'safe'. P.S. I have questions on ISAs that I will ask in the relevant forum.

So, given all of that and not wishing to invent a new form of trading 'linger trading' !! I imagine that either day trading in the US after work or 'swing trading' (needs explanation!) are what I should be looking at.

I apologise in advance if anyone feels I am wasting their time but I really am stumbling around in the dark a little here.

So thanks again to those who have replied. I do appreciate your time.

All the best,

RB
 
Sorry, what are you saying is spam?

If you are implying that these posts are spam then I resent that remark.

I stumbled upon this site whilst looking around the web at sites to do with trading. If you think I'm wasting time then just say so and I'll leave the forum. No problem. I wouldn't want to stay where I'm not wanted.

The first replies I had were very helpful and informative. Your appears to be just insulting.

If I have misread or misinterpreted your email then I apologise.
 
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No, pssonice, this is more like spam:
http://www.trade2win.com/boards/showthread.php?t=24049
Ratbag strikes me as being perfectly genuine and to suggest he is spamming is - as he suggests - insulting. Your post is harmful as it may deter other 'newbies' participating on the boards for fear of silly criticism from members like you. I suggest you delete your post and apologise to Ratbag.
Tim.
 
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timsk said:
Far from being a jab, ammo, it was intended as a complement to J.O.C. and Mr. C'!
Tim.
timsk,it was a joke about jabs,nothing personal,sorry
 
timsk said:
No, pssonice, this is more like spam:
http://www.trade2win.com/boards/showthread.php?t=24049
Ratbag strikes me as being perfectly genuine and to suggest he is spamming is - as he suggests - insulting. Your post is harmful as it may deter other 'newbies' participating on the boards for fear of silly criticism from members like you. I suggest you delete your post and apologise to Ratbag.
Tim.

Thanks timsk...

I don't want to cause a problem here but I was rather put out by that post...

OK...I have a couple of questions but I'll put them on another post... :D

RB
 
Hi Mr Charts,
How many different stocks do you usually watch at any point of time in the live market?
Cheers.
 
It varies, BF2, but usually about 10-15 at open. However, I use scans constantly during the day to find the movers which fulfil the criteria I use for my set ups. If they then trigger, I take the trade.
In other words, the number varies during the day, but it is very easy to have any number you like on the radar. For example, several minutes ago I picked up TNOX on my scanner and shorted it for a very nice move. I do have an image taken at the point of exit which I'll post on the "Evening trading........." thread in the next few days. It was a 42c move in 6 minutes.
Richard
 
Mr. Charts said:
It varies, BF2, but usually about 10-15 at open. However, I use scans constantly during the day to find the movers which fulfil the criteria I use for my set ups. If they then trigger, I take the trade.
In other words, the number varies during the day, but it is very easy to have any number you like on the radar. For example, several minutes ago I picked up TNOX on my scanner and shorted it for a very nice move. I do have an image taken at the point of exit which I'll post on the "Evening trading........." thread in the next few days. It was a 42c move in 6 minutes.
Richard


Richard,

Where can I read about scans and how to set them up?

Sorry, another numpty question.....
 
I run my own in my own way, but you can use the search facility here to find some general info.
No question from you so far has been "numpty", so don't worry about that. However, trading is a combo of many things and many questions are akin to asking a surgeon which "tools" he finds best for operating.
You are on a long, long journey. Don't be surprised if your own explorations last for years.....
Richard
 
Mr. Charts said:
I run my own in my own way, but you can use the search facility here to find some general info.
No question from you so far has been "numpty", so don't worry about that. However, trading is a combo of many things and many questions are akin to asking a surgeon which "tools" he finds best for operating.
You are on a long, long journey. Don't be surprised if your own explorations last for years.....
Richard

Thanks again Richard...I'm prepared to take the time to learn and therby not lose too often!! :cheesy:

If you have a minute, please could you take a look at the question on charts that I put on the other thread...entitled Stupid question of the day?

many thanks again,

RB
 
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