income problems

[westham010]

Hi there,

I am looking to slowly get into trading starting off first with reading the many posts on this forum, buying books and then getting a demo account with a major spread betting firm like cms or ib.

I fully understand that it is a real skill and takes years and years before you can even begin to see any kind of consistent income.

I am not going to ask the usual questions as this site almost certainly has the answers to them, and its simply just a question of spending more time searching.

The only thing I am worried about is this: At present I am a student which means I do not have an income. What I want to know is would I be able to start trading with real money or would I have to wait until I am in full time job earning a consistent income?

Thanks, I look forward to your advice,

Edmund:cheesy:

 

[fifty2aces]

Depends on your own situation - if you have enough savings to live off, you might be ok to start trading real money (obviously after proving profitability demo trading). If you're trying to trade to make a living right from the start, it's likely that the pressure to perform well and pay the bills will be bad for your trading.

 

[trader_dante]

Forget about demo accounts. Use Fins or IG and trade real money but keep your stakes very small (these companies will let you do that) Stick to 1-2% risk per trade on your initial balance. Start with £10 and risk 10 - 20p per setup. Real money, however small, will teach you something about the emotional side of this business. Having said that, you probably won't be able to open an account if you don't have an income so you would probably need to say you have at least 10k of savings in order to qualify for one. Tom

 

[shadowninja]

I agree in part with both posts.

I think people underestimate the value of a demo account. Why risk real money when you have no idea how to trade let alone any vague semblance of a strategy? Worry about emotions later.

 

[fifty2aces]

Forget about demo accounts. Use Fins or IG and trade real money but keep your stakes very small (these companies will let you do that) Stick to 1-2% risk per trade on your initial balance. Start with £10 and risk 10 - 20p per setup. Real money, however small, will teach you something about the emotional side of this business. Having said that, you probably won't be able to open an account if you don't have an income so you would probably need to say you have at least 10k of savings in order to qualify for one. Tom

Can you really spreadbet that small? I had a look at fins and IG, couldn't see an option to trade for less than 50p a point.

 

[westham010]

Thanks for all your comments. Having looked on IG and read reviews elswhere, I have seen that they have an excellent online trader education resource that lasts six weeks called TradeSense, which allows you to trade with real money at first, but only in tiny amounts (i.e 10 per point in weeks one and two and then slowly rising!) So as it is real money I would learn about the emotional side of the business, as well as how to trade and develop your own strategy, without risking significant amounts of money.

Although I have heard very mixed opinions about IG from more experienced traders, I am sure this particular course would be the perfect introduction for a complete newbie such as myself.

The only other thing is that although I have very healthy savings, I do not want to risk more than 10/20% of them, as they are meant for things like a future house + car, not for a hobby (which I am treating trading at the moment, that could potentially become something more!)

My question is then, would I be better off sticking to online trading education programmes for the next two years of university or should I apply for a real account as soon as I am fully confident with the Tradesense programme and other online education on trading? If that would mean telling the company about my savings I am prepared to do so, but as mentioned, I am only prepared to risk around 10/20% of my savings at the very most.

Thanks,

Edmund

 

[shadowninja]

You won't learn much in six weeks. The environment may change once in that time if you're lucky. What is more likely to happen is that you'll do well while Tradesense forces you to increase your stake, then when you're trading at the normal size, the environment will change, you'll be hit with a series of drawdowns and wonder what the hell is going on but by then you'll have lost your savings.

Demo trade for 6 months so that you can experience how the market is constantly shifting.

 

[westham010]

You won't learn much in six weeks. The environment may change once in that time if you're lucky. What is more likely to happen is that you'll do well while Tradesense forces you to increase your stake, then when you're trading at the normal size, the environment will change, you'll be hit with a series of drawdowns and wonder what the hell is going on but by then you'll have lost your savings.

Demo trade for 6 months so that you can experience how the market is constantly shifting.

Hi there, thanks very much for the prompt reply,

Yes I would say this is a much better appproach having thought about it. Although people are always saying the emotions are so much more powerful when you are trading with real money, if you are a complete newbie like myself, you have to tackle one thing at a time. And six weeks is obviously no where near sufficient!

I will definitely leave the emotions side to a later date, when I actually know how to trade and have come up with a suitable strategy.

One thing I ask is that can you reccommend me some spread betting firms where they allow you to have a demo account for a large period of time. I 've heard from other sources that you are only allowed to have a demo account for a certain time then you have to start trading live.

Also would it be good to keep swapping spread betting companies in my 6th month or more demo period to see which one works best for me?

thanks again,

edmund