Green Beginner

[Medici]

Hi every one.
recently i have inherited some money and have to admit that looking at them sitting in bank account is like watching the grass grow.
I would love to invest (trading) in shares, but i have to say i am at the same question you all have at the beginning.
Where do i start ?
I did have webinar with elite traders, but the starting cost (over $4500) is pretty much to high. They do have learning curve of 21 days to get you trading and SMS alert advice on margin stock.
Is there any book (first steps) any one could recommend for a beginner ?

Appreciate your help.

Regards

Medici :)

[beamstas]

Hi every one.
recently i have inherited some money and have to admit that looking at them sitting in bank account is like watching the grass grow.
I would love to invest (trading) in shares, but i have to say i am at the same question you all have at the beginning.
Where do i start ?
I did have webinar with elite traders, but the starting cost (over $4500) is pretty much to high. They do have learning curve of 21 days to get you trading and SMS alert advice on margin stock.
Is there any book (first steps) any one could recommend for a beginner ?

Appreciate your help.

Regards

Medici :)

For a total beginner i'd read Adaptive Analysis By Nick Radge or maybe even Share Trading by Guppy

[Julia]

Before you buy any books, or even faintly consider buying any of the multitude of stock picking programmes out there, read through all of the Education section on the ASX website so that at least you know how the market works, what the lingo is etc.

www.asx.com.au

[Boggo]

Before you buy any books, or even faintly consider buying any of the multitude of stock picking programmes out there, read through all of the Education section on the ASX website so that at least you know how the market works, what the lingo is etc.

www.asx.com.au

Agree, and when you do decide on your first book I would suggest Stan Weinstein's Secrets for Profiting in Bull and Bear Markets while using free software such as Incredible charts (http://www.incrediblecharts.com/online_charts/free_download.php) to practice the application of the theory.
There is also a lot of useful info under the Education tab on that site.

Then read the first 30 or so pages of Adaptive Analysis by Nick Radge again and again until you are capable briefing someone on it.

Once you have done that then you will be capable of knowing what you are being sold as a training course and will be able to recognise bulldust at 100 paces.

I remember reading somewhere years ago that trading is like walking a tightrope, and that paper trading is like walking a tightrope while it is lying on the ground, you have to do the latter bit first though otherwise you will just lose your mula and will end up doing it anyway.

That's my :2twocents

[GumbyLearner]

Just don't buy anything involving Malcolm Turnbull.

He used to make bucks logging the Solomon Islands. But remember it's all Krudd's fault, not Turnkrudds! :D

[kam75]

Take the advise of Boggo and read Weinstein's book. It's brilliant. I remember back in 2003 when I first read it. Stan's a great writer and his book "The Secrets to Profiting in Bull and Bear Markets" easily rates as one of the best books ever written on how to trade profitably in the markets. It will far outclass any $4000 share course.

[Medici]

Lots of info.
Appreciate your help :)
Looks like my education starts tomorrow.

Thank You All :)

Medici

[Mr J]

I'd only suggest trading if you're going to take it quite seriously. Most investors don't seem to.

[brianwh]

I have just had a "google" around but couldn't find what I was looking for but there are figures around that suggest that something like 90% of traders (as opposed to investors) go out backwards within 12 months. I know these figures sound a bit scary so maybe I have it wrong. It might have been in something Marcus Paddley wrote. Anyway somebody else may have better information.

[Semillon]

Is there a particular reason you are looking at trading as opposed to longer term investing?

[Mr J]

I have just had a "google" around but couldn't find what I was looking for but there are figures around that suggest that something like 90% of traders (as opposed to investors) go out backwards within 12 months. I know these figures sound a bit scary so maybe I have it wrong. It might have been in something Marcus Paddley wrote. Anyway somebody else may have better information.

The often-quoted figure is that 95% of traders lose. This has probably been misinterpreted and/or exaggerated, but one stat I did read was a brokerage report where apparently 70%+ of their clients were losers over a certain period. The figure itself doesn't matter, as the fact is that most people cannot trade profitably. There are many reasons why a trader may fail, such as being overly-aggressive, lack of willpower (i.e. give up), lack of effort, lack of skill, lack of mental fortitude, inadequate capital or management, simply unlucky etc.

The odds are against you, but you can improve them significantly by taking it slowly, becoming informed, and becoming comfortable.


Is there a particular reason you are looking at trading as opposed to longer term investing?

Because he hopes for a proper return on his capital :p:.

[Medici]

Well...
I am a independent person and hate to see my retirement days depending on government scrappy pension.
Yes i am serious about trading and as i stated my learning begins today (already placed order for some books).
I also understand risk involvement with trading, but i will not get anywhere if i sit on my bum and do nothing while i have chance to improve my social situation (being not dependent on pension only).
I have to admit that being a little conservative, my choices of stock would be ASX 200.
In the time when all stocks went down i did not have the money to get my shares, but i told all my friends that " this is the time to get shares - BHP and RIO - Westpac and NAB" as my feeling has been of only minor down in shares value.
And yes, i was right. If i did have money then i would make some good return on my "investments".
But, this is history and now is a new chapter. I do have some money and i believe that with good home work and study i will achieve my goals.:)

Medici

[johenmo]

....i believe that with good home work and study i will achieve my goals.:)
Medici

A lot depends on how involved you want to be. Amibroker is a great programme - cheap - but you have to learn to programme, But even just basics as getting price and volume is relatively easy. Can download a trial version which is fine for me atm.

Preparation beats luck most of the time.

[jono1887]

There is really no need to spend alot of money on educational resources. Theres plenty free stuff out there on the internet and on this forum. :D

[Mr J]

It's good that you're motivated, as I think passive investing, funds, savings accounts etc are a horrible waste of capital. I read some books, but I mostly devoured everything on trading forums, as forums are an awesome source of information. Much of it is rubbish, but there are always gems to be found.


In the time when all stocks went down i did not have the money to get my shares, but i told all my friends that " this is the time to get shares - BHP and RIO - Westpac and NAB" as my feeling has been of only minor down in shares value.
And yes, i was right. If i did have money then i would make some good return on my "investments".

I wouldn't consider this a positive. Perhaps you do have an amazing ability to pick stocks on intuition, but it was likely just chance. There are a few concepts that a trader really should understand, such as probability, variance, and expected value.

Probability: The value given to any possible outcome of an event. Example, the probability of heads on a coinflip is about 50%. We realise that outcomes are not certain, and use this knowledge to adjust our ego and apply sensible risk management. A winning trade is not necessarily a good trade, as even a coinflipper is right half the time.

Variance: The measure meant of results deviating from the mean. Example, going flipping heads twice in a row instead of 50% heads, 50% tails. Why it is important? Shorterm results are misleading, and by shorterm I mean regarding sample size, not time. Even a coinflipper can win 5 in a row, or 30 out of 40. If the sample is statistically insignificant, then so are the results.

Expected Value: In trading terms this would be our expected profit or loss. It is formed by combining probability and price. More specifically, the size and probability our profits compared to the size and probability of our losses. Why is it important? Without it we will not profit over the longrun. We may experience good shorterm results, but we know that shorterm results are meaningless. Without a positive expected value, a trader can only rely on luck to succeed, and this is a very poor approach.

I think once a trader thinks about everything in terms of probability and price, the rest may fall into place.