Looking to break into trading

[rickstarb]

Hey everyone,

So I am currently looking at getting into trading. I am leaning towards CFD trading (Yes I am aware of the possibility to lose out bigger than my trade).

I am wondering if people can offer some direction. I am currently reading through the old posts an collecting as much info as possible.

How do you guys pick the stocks you trade, whats a good place to start? I plan on back testing once I have created a strategy for at least 6 month.

My first account will only be funded with £1500 - £2000, how possible is it to really make a profit from this? I am not looking to be greedy and I understand I should slowly increase my fund over time.

Any advise links and help would be great.

Thanks

 

[timsk]

Hi rickstarb,

So I am currently looking at getting into trading. I am leaning towards CFD trading (Yes I am aware of the possibility to lose out bigger than my trade).

Many experienced traders would say that CFDs are a sophisticated derivative product and not an ideal trading vehicle for a newbie starting out. That said, depending upon your circumstances, it may be the right one for you. That means you really have to know all the ins and outs of the product and be fully conversant with all its disadvantages - not just its benefits.

I am wondering if people can offer some direction. I am currently reading through the old posts an collecting as much info as possible.

Check out the second and third links in my signature.

How do you guys pick the stocks you trade, whats a good place to start? I plan on back testing once I have created a strategy for at least 6 month.

Have you made a comprehensive study of all the available markets to trade and, if so, have you concluded that stocks offer the best opportunities for you for specific reasons that you're very clear about? If so - great. If not, take a step back and read this FAQ: Which Should I trade - Stocks, Futures or Forex etc.?

My first account will only be funded with £1500 - £2000, how possible is it to really make a profit from this? I am not looking to be greedy and I understand I should slowly increase my fund over time.

The big issue with trading small accounts is that depending on your trading vehicle (i.e. CFDs in your case) and your choice of broker, the minimum allowable amount set by your broker to trade may involve putting more of your account at risk than you're comfortable with or is advisable. For more info' on this, read this Sticky: Essentials Of 'Risk & Money Management'

In terms of your chances of making a profit - that's mostly down to having a robust trading methodology that you're able to execute with discipline. In terms of how much profit you can expect to make, think in terms of percentages as opposed to £££ or $$$ amounts. If you're a complete newbie, then your prime objective is to get to the end of year one without having had a 'blow up', i.e. losing most or all of your money. In year two, think in terms of equalling or doubling what you'd get in interest from a bank or building society deposit account. If you're still around in year three, aim for a multiple of the previous year's profit. This FAQ has more detail: Realistically, How much Money can I Expect to Make?

Enjoy the journey!
Tim.

 

[rickstarb]

Thanks for the detailed reply. I think I will take the next few days to a week to take in all the info you have sent and make sure I have a good grip on it all. I will then look at maybe compsoing a more bodyful reply in place of this husk of a reply.

Thanks again.