Trading Newbie advice.

Hey guys,

I hope you don't mind me asking you a few things as I am very new to trading and to investment in general. I am sure you get messages from novices like myself all the time!! I have started trading based around common sense on the LSE. I am using Commdirect as my broker. I am looking to make 5-10 percent a week proffit from my investment account (which has a mere 2g in it). Can you give me any tips on how not to lose my money. At the moment I am holding Intelek Shares and IRevolution group shares. I am interested in spread betting but feel that it is too like gambling!!! Any feedback whatsoever would be greatly appreciated..... If there are any bits of software that I should be using, different brokers etc etc.. your imput would be most appreciated.



Kind regards,

John Christopher

First, decide if you are a 'trader' or an 'investor'.

They are exclusive clubs, and members of one club are disparaging of members of the other, this can sometimes rise (sink ?) to the level of physical violence.

Secondly, read a few books.

Thirdly DON'T be taken in by anything you read on boards like this.

Hi Cdsjmc

Welcome to T2W

You say that your new to trading, then the first thing I should tell you is that not losing money is hard, and if your looking to make 5-10% a week, then initally I would say that is a very difficult thing to do.

If after saying that, you still what to invest your money, then the best advice is "cut your losses, and run let your winners run" This is a lot easier said than done.

I would also look at these articles http://www.investopedia.com/articles/technical/070301.asp They are well written and a good base to start trading from - you have to start from the bottom though

Like others on this board, I'm more than happy to answer any questions you have

Hope this helps

Thanks most helpful. Are you guys primarily into day spreads / futures or proper shares?

regards,

John

proper shares.

only a newbie here.trading since 25thoct

Hi John,

I've been trading about two years. Started on UK stocks, then moved to spreadbetting indices then very recently into futures. Each step when I made it seemed a huge one.
Read as much as you can, talk to as many people as you can. It won't stop you making mistakes for yourself but you will then be more likely to recognise them when you make them

As FTSE says this is NOT an easy way to make money, you need to have a real passion to learn as well as finding the right sort of trading for your personality type. It takes time and it takes over your life. But it's wonderful


Bon voyage!

Hmm Helen..

"Read as much as you can.."

- Definitely.

".. talk to as many people as you can..."

- Hmm, not so sure about that.

Hi Morris,

I stick by that, as long as you are aware that people are unreliable witnesses to their own behaviour at times I think what I did was to try and find people who had a similar dispositon to me and look at how/what they were trading. So I looked for other risk averse, poor people I found one person (Tenpole) on TMF who was very similar that's all. He had a lot more capital than me but the way he traded was very very close to my own natural style. Pity he's not around any longer, I'd love to be able to talk to him now I can understand what he was saying to me better.

I do know what you are getting at, you need to trade as yourself not someone else. Early on you don't know who you are as a trader and following others can be dangerous/damaging.

Morning Helen, agreed, think the point I am trying to make is that what I have learned from my trading experiences (several hundred trades, stocks & indices, swing & intraday) is that too many people are looking for THE ANSWER.

In their desparate search for it, they latch onto almost anyone who enters something on a board, or publishes a book, and it can be an expensive lesson to discover that what works for one person doesn't always work for another.

I have seen a perfect example of this type of psychology at work: A year ago, I was at an investment/trading exhibition at Olympia.
A chap from Eden Group gave an excellent (IMHO) talk on trading rules, disciplne & following a plan.
At the end of the talk, a few of audience (including me) wanted to ask him questions, and a little group formed around him. I was interested to find that while a few people wanted to ask about systems & stops etc, most seemed to have ignored the talk and wanted to know where the Dao/S&P/FTSE was heading.

That said a lot to me about the nature of people in the markets.

[Apologies for length of post.]

THE ANSWER is everyone's goal, but what the majority fail to understand is that 'the answer' comes from within and is therefore unique to them.

They therefore need to devote a few years-worth of time and effort, together with a very small pot of money, to finding out what the answer is.

A handful will realise that it is trading. But the vast majority will conclude that they are (were) best leaving their hard-earned cash in tracker funds, building societies, or whatever they feel safest with.

Finding the answer is expensive in terms of time and effort, and requires a lot of dedication. So cdsjmc needs to bear this in mind.

Cdsjmc - you want to make 5-10% per WEEK from your investment account? That, in my view, is a totally unrealistic target for someone starting out. Bear in mind that 95% of futures traders get wiped within their first year of trading. I appreciate that you are not trading futures, however, the dangers are there and you need to realise that it is far far easier to lose money than to make money. Therefore your goal should be capital preservation, and if in a year's time you still have your capital, then you are well on your way to making profits.

Where do the profits that traders make come from? They come from people like you, who are novices. (And they came from me when I first started out.) So your trading objective should be to prevent a LOSS of 5-10% per week from your account.

I hope this doesn't sound too harsh; it is just meant to open your eyes to the fact that your objective should be preventing loss, rather than making profits at this stage.

I concur with Skim- the most important thing for a newcomer is to prevent losses of 5-10% a week- that level of loss is very ,very easy to achieve, believe me. A profit of just a few % a month would be a handsome return for a beginner.... And don't think that just because you have achieved that for a few months that you have suddenly become an expert.... Slowly, slowly Keepy kitty.

Ok guys, Thanks for your opinions. I do agree with you that it is easy to lose money initially. However, what got my started on this whole thing (other than a bit of economics) was Marconi @ 1.25 sold at 2.50. For a beginner, a hundred percent return over 5-6 weeks is surely a miracle?

Let me know your thoughts,

Kind regards,

John

My thoughts re Marconi - very very lucky.

Many 'investors' have lost everything on Marconi.

Barry

One point - I would avoid trading anything under 100p.

But just my opinion, DYOR.

to play the ftse 100 and make money you are talking a lot of money. I am only playing with thousands, not tens of thousands

penny stocks are volatile.

you can win or lose in a week.

Look at energy technique last week


John

Ahhh, so you got 100% return on your dosh with Marconi over a few weeks. You used the word miracle; that is one I would use too. A miracle that Marconi didn't drop further, and a miracle that you didn't end up nursing a huge loss.

If I were you I would look on your 100% gain as a sheer fluke, and the exception to the rule. If you think that trading is easy money, then you are in for some expensive lessons.

I notice from your profile that you are a student. PLEASE please please make sure that ANY money you put into the markets is money that you can quite happily lose.

Baked beans on toast is OK for a day or two, but not for a whole term. So please think very carefully about the consequences of LOSING money on the markets. We've all had miracle trades, but the trouble is that they are few and often very far apart.

You said to look at Energy Technique last week.

I say look at TripleArc last week.

Beans on toast!!! I wish, last year (my first) cost over 18 grand including flights and fees. A couple of grand isn't the end of the world, nor going to dramatically change my circumstances. Its all good fun. As i said before its a hobby not a career!!! Its all a lesson I guess.

Kind regards,

John

Sorry to keep on guys, watch IREV.L this will either kill my marconi proffit or double it... bought them @ 1p

cheers,

John