My first ever post although have been a 'reader' of this forum for many years... 
Firstly, I think there may be some misunderstanding regarding how you are calculating risk. If you decide to risk 2% of your £20k, then this is the maximum amount you are prepared to lose, not the amount of your investment. Thus you might decide to buy £2000 worth of shares but set your stop at the point where if you are down by £400 you sell and take the hit. I get the impression from your posts that you thought people were suggesting you only buy £400 worth of shares...
Anyway, onto the main reason for my post. I have always had an interest in the stock market and worked in corporate finance for various banks for over 15 years. When I left the world of banking, I set up my own business which I have run very successfully for another 12 years. My business was taking less and less time to manage and therefore, about 2 years ago, I decided to look at trading on a semi full time basis. I figured that with my previous work experience it would be a piece of cake to master - how hard can it be?!
I did a similar thing to what you are planning and put £20k into a trading account and then spent every waking moment reading and studying whatever I could lay my hands on. I managed to trade my account down to £16k by making all of the mistakes that every beginner makes and it took me 18 months to go from £20k to £16k back to £20k. In other words, 18 months and thousands of study hours to break even.
In the last six months, I have become far more disciplined and I am working to a plan rather than 'guessing' and I am now trading profitably. I use a mix of fundamental and technical analysis. Fundamental to make sure it is a company I want to invest in and technical to identify entry/exit points. I think it will be at least another 12-24 months before I am confident enough to say that trading is 'what I do for a living'. For a start, as other posters have said, £20k is not a big enough pot to earn a living from. I do have other funds available to trade but why risk it until I am 100% confident of my ability? If I can't grow a £20k pot, I won't be able to grow a £100k one and will just end up losing more.
It is very, very, very hard to learn to trade successfully and consistently. This is especially the case if you have no relevant experience or knowledge of how to value a business or how markets work etc. Personally I wouldn't recommend any beginner starting with day-trading or with forex but that's just my opinion, others may disagree. It is easier to learn to take swing trades or longer term trades but unfortunately it is the 'lack of action' which appears to turn people off from this type of trading (initially at least).
In terms of money management, I would never invest more than 10% of my capital in one company and then risk no more than 10% of that investment as my potential loss. In other words, a £2k investment would have a stop placed at the point where I was about to lose £200 (1% of my total capital). I usually close trades before they get to this point though in order to keep losses to a minimum.
My advice, based on being a year or two up the road from where you are now, would be to read and absorb as much information as you can from places like this forum, books and other relevant websites. Spend hours and hours watching the market and noting how price moves and get to really 'know' some of the shares you want to trade in. It seems to be psychologically easier to trade actual shares rather than spread-betting etc so stick with this initially, as indeed, you intend to.
Finally, expect it to take at least two or three years to get to a stage of proficiency. If you get there sooner, so much the better. If you break even in year one, you are probably ahead of most other people!
Very best of luck!
Firstly, I think there may be some misunderstanding regarding how you are calculating risk. If you decide to risk 2% of your £20k, then this is the maximum amount you are prepared to lose, not the amount of your investment. Thus you might decide to buy £2000 worth of shares but set your stop at the point where if you are down by £400 you sell and take the hit. I get the impression from your posts that you thought people were suggesting you only buy £400 worth of shares...
Anyway, onto the main reason for my post. I have always had an interest in the stock market and worked in corporate finance for various banks for over 15 years. When I left the world of banking, I set up my own business which I have run very successfully for another 12 years. My business was taking less and less time to manage and therefore, about 2 years ago, I decided to look at trading on a semi full time basis. I figured that with my previous work experience it would be a piece of cake to master - how hard can it be?!
I did a similar thing to what you are planning and put £20k into a trading account and then spent every waking moment reading and studying whatever I could lay my hands on. I managed to trade my account down to £16k by making all of the mistakes that every beginner makes and it took me 18 months to go from £20k to £16k back to £20k. In other words, 18 months and thousands of study hours to break even.
In the last six months, I have become far more disciplined and I am working to a plan rather than 'guessing' and I am now trading profitably. I use a mix of fundamental and technical analysis. Fundamental to make sure it is a company I want to invest in and technical to identify entry/exit points. I think it will be at least another 12-24 months before I am confident enough to say that trading is 'what I do for a living'. For a start, as other posters have said, £20k is not a big enough pot to earn a living from. I do have other funds available to trade but why risk it until I am 100% confident of my ability? If I can't grow a £20k pot, I won't be able to grow a £100k one and will just end up losing more.
It is very, very, very hard to learn to trade successfully and consistently. This is especially the case if you have no relevant experience or knowledge of how to value a business or how markets work etc. Personally I wouldn't recommend any beginner starting with day-trading or with forex but that's just my opinion, others may disagree. It is easier to learn to take swing trades or longer term trades but unfortunately it is the 'lack of action' which appears to turn people off from this type of trading (initially at least).
In terms of money management, I would never invest more than 10% of my capital in one company and then risk no more than 10% of that investment as my potential loss. In other words, a £2k investment would have a stop placed at the point where I was about to lose £200 (1% of my total capital). I usually close trades before they get to this point though in order to keep losses to a minimum.
My advice, based on being a year or two up the road from where you are now, would be to read and absorb as much information as you can from places like this forum, books and other relevant websites. Spend hours and hours watching the market and noting how price moves and get to really 'know' some of the shares you want to trade in. It seems to be psychologically easier to trade actual shares rather than spread-betting etc so stick with this initially, as indeed, you intend to.
Finally, expect it to take at least two or three years to get to a stage of proficiency. If you get there sooner, so much the better. If you break even in year one, you are probably ahead of most other people!
Very best of luck!
