Questions from a stock market beginner

[CanOz]

hey guys sorry for having so many questions, just rapidly trying to learn more and more, thank you for the previous responses they were quite helpful.

I am looking into designing a mechanical trading system for entry and exit points, but rather than all my trades being done on a system, i just want to test whether some of the strategies i have in planned are at least somewhat decent.

I was looking for a program that would allow me to enter my own entry and exit conditions and then back test my results based on historic data, i dont plan on using this with real money yet so even just paper money programs would be great!

thank!

In my opinion:

1.) Multicharts for intra-day automated systems
2.) Amibroker for EOD mechanical systems
3.) Ninja Trader for discretionary systems

-Multicharts is very easy on your systems resources and it runs flawlessly making use of all your systems cores. Quite fast for back-testing and optimizing.
-Amibroker is a bit clunky for intra-day trading but extremely fast for back testing EOD strats.
-NinjaTrader is a clunky price of 'software' that is resource intensive but handles the RT data flow the best of all of them in that you can program heaps of ways to handle that data flow.

-Amibroker probably required the biggest learning curve, MC has probably the easiest language. NT has the most third party add ons and is easily the most commercialized now.

I have all three and actually use two for live trading and NT for SIM at the moment.

-Amibroker trades 20% flipper
-MC trades my system and another third party system
-NT i use for SIM trading using the DOM.

Cheers,


CanOz

[johnnyhuynh21]

Hey guys i just have a question about swing trading. Lately ive been trying to learn how to swing trade using technical analysis. Ive been using moving averages (SMA and EMA cross overs) to identify trends and then ive been using bollinger bands, RSI, slow stochastics, MACD and then general support and resistance lines to trade, however, im a little confused as to what time frames i should use.

Ive been looking at daily intervals for a period going back 6 months and i've read i should also look at weekly and hourly time intervals. I've been trying this and getting mixed signals about trades, i was wondering what technical indicators should i use for a given timeframe? or should i use all the technical indicators i already use for all time frames and only trade then it all lines up ?

thanks!

[tech/a]

Hey guys i just have a question about swing trading. Lately ive been trying to learn how to swing trade using technical analysis. Ive been using moving averages (SMA and EMA cross overs) to identify trends and then ive been using bollinger bands, RSI, slow stochastics, MACD and then general support and resistance lines to trade, however, im a little confused as to what time frames i should use.

Ive been looking at daily intervals for a period going back 6 months and i've read i should also look at weekly and hourly time intervals. I've been trying this and getting mixed signals about trades, i was wondering what technical indicators should i use for a given timeframe? or should i use all the technical indicators i already use for all time frames and only trade then it all lines up ?

thanks!

Trade one timeframe.
Study pivots and support and resistance.
Understand volume demand and supply.
How to read It at potential pivots .

Understand risk and position sizing.

[Trembling Hand]

Johnny you are trying to shoehorn some tools (indicators & timeframe) into a result. You have it ar$e about.

As Tech has already said, understand support and resistance and what causes it, supply and demand, then trade that. Adding all these indicators and different timeframes will just complicate the picture and have you confused as to what you should be doing.

[FIGJAM]

here is quit possibly the dumbest question of all but I am going to ask it anyway.

What are the pros and cons to trading in the Dow or S&P 500 oposed to the ASX?

I knew what they were when writing covered calls (bigger pool of stocks to trade, better pricing structure only having to buy 100 shares per contract rather then 1000 etc)

Is it the same pros?

Cheers,

[hotchy]

So I'm obviously quite new at this, but what is happening with all of these trades with a volume of 7? I'm quite confused!

Volume 7.png

[Out Too Soon]

So I'm obviously quite new at this, but what is happening with all of these trades with a volume of 7? I'm quite confused!

Volume 7.png

Somebody will answer "automatic bots" (auto software program) & you will scratch your head, shrug your shoulders & say meh! My conspiracy theory is it's purpose is to artificially drive the sp up or down without outlaying a lot of capital, somebody with $100,000s of shares wont be worried about the relatively small cost. This is why it's always important to watch the volume of the transactions, not just the price which can be misleading. The ASX, ASIC should stop the practice, there is no point in these tiny deals except to deceive & manipulate.

[Trembling Hand]

Somebody will answer "automatic bots" (auto software program) & you will scratch your head, shrug your shoulders & say meh! My conspiracy theory is it's purpose is to artificially drive the sp up or down without outlaying a lot of capital, somebody with $100,000s of shares wont be worried about the relatively small cost. This is why it's always important to watch the volume of the transactions, not just the price which can be misleading. The ASX, ASIC should stop the practice, there is no point in these tiny deals except to deceive & manipulate.

Utter rubbish!

[hotchy]

Somebody will answer "automatic bots" (auto software program) & you will scratch your head, shrug your shoulders & say meh! My conspiracy theory is it's purpose is to artificially drive the sp up or down without outlaying a lot of capital, somebody with $100,000s of shares wont be worried about the relatively small cost. This is why it's always important to watch the volume of the transactions, not just the price which can be misleading. The ASX, ASIC should stop the practice, there is no point in these tiny deals except to deceive & manipulate.

I find it amazing to watch. Still happening.

So what is the purpose of artificially driving up the SP?

Untitled.png

[Vesupria]

Somebody will answer "automatic bots" (auto software program) & you will scratch your head, shrug your shoulders & say meh! My conspiracy theory is it's purpose is to artificially drive the sp up or down without outlaying a lot of capital, somebody with $100,000s of shares wont be worried about the relatively small cost. This is why it's always important to watch the volume of the transactions, not just the price which can be misleading. The ASX, ASIC should stop the practice, there is no point in these tiny deals except to deceive & manipulate.

How can very small trades (ie. 7 shares at a time) manipulate the price when trading has already done 1.3 million in volume (just today)?

It's probably an accumulation bot.

[hotchy]

How can very small trades (ie. 7 shares at a time) manipulate the price when trading has already done 1.3 million in volume (just today)?

It's probably an accumulation bot.

Cheers. Quick Google search answered the rest of my questions.
http://microtrader.com.au/post/3118882335/trading-bots

[Julia]

Utter rubbish!

TH, not everyone has your experience. If you're going to tell someone they're talking utter rubbish, fair enough, but maybe consider following that criticism with an explanation of why it's rubbish.

[Trembling Hand]

TH, not everyone has your experience. If you're going to tell someone they're talking utter rubbish, fair enough, but maybe consider following that criticism with an explanation of why it's rubbish.

I would no soon waste my time explaining to someone why putting your hand in a bucket of water makes your hand wet. Really you don't need any experience to know a $17 trade is irrelevant, just a smidgen of common sense would help.

[NewbAndy]

here is quit possibly the dumbest question of all but I am going to ask it anyway.

What are the pros and cons to trading in the Dow or S&P 500 oposed to the ASX?

I knew what they were when writing covered calls (bigger pool of stocks to trade, better pricing structure only having to buy 100 shares per contract rather then 1000 etc)

Is it the same pros?

Cheers,

Hi Figjam,

I've been looking into this too. From what I've read a lot of it comes down to the current underperformance of the Aussie market relative to the US. For example, many analysis will say that the overall feeling in Aus is extremely negative while in the US it's far more positive, this could lead to greater upwards sp movement than we've seen in australia.

With covered calls, Aus calls are now 100 shares too- changed relatively recently I believe.

I'm sure others will be able to give you a better (worded) explanation about why investing in the US can help you over the long run.

/A

[joehann]

Hi,
I am new to this forum and stock trading, and I am wondering if it is for me or not. I was hoping I could get some input from people who trade about the following.

1. I would like to know how stock trading effects your life?
   
2. How much time per day/week/month do you spend doing it?
   
3. Is it something that you do by yourself or is there a partnership or team of people you invest with?
   
4. How has the money changed your life? Do you make what you expect to make, is it consistant (over the month, quarter, year)
   
5. What tools do you need to trade stocks? Just an online broker and a subscription to the financial review, or is it more than that?
6. What is the biggest issue that you come up against being a trader?
7. And in your opinion what makes a successful trader, someone who makes money, as opposed to someone who loses.
8. Do you have a system? i.e. do you look for stocks in a particular position and invest a certain way
9. And i'd like to know about how you get your information (no need to reveal sources), but i would like to know if your just reading the paper or your close to the coalface, or how in depth you go with the graphs to make your choices.
10. I would also like to know a little about how much to put on a stock? How do I decide whether to invest a little or a lot?

Thank you in advance.

Joehann.

[WilkensOne]

Hey Joehann,

Welcome to ASF, I am relatively new here as well!

Before you start asking too many questions that may have already been answered, have a read through the forums, beginner's lounge especially.

Also check out this great thread by Sir O that is designed for the beginner, it is great: http://www.aussiestockforums.com/for...ad.php?t=14370

Enjoy your stay!
Wilkens

[burglar]

Hi,
I am new to this forum and stock trading, and I am wondering if it is for me or not. I was hoping I could get some input from people who trade about the following ...

So many questions!

Let's start with a few.

• I would like to know how stock trading effects your life?
  As little or much as I want! Its my passion, my hobby, my pastime!
  
• How much time per day/week/month do you spend doing it?
  As little or much as I want! Most weekdays I spend an hour, it used to be more!
  I doubt, I have done 3x 8 hour days since August 2008 (GFC)
  
• Is it something that you do by yourself or is there a partnership or team of people you invest with?
  I had a mentor "in the grey".
  
• How has the money changed your life? Do you make what you expect to make, is it consistant (over the month, quarter, year)
  I have lost $15K over 12 years. Boating would have cost me more!
  
• What tools do you need to trade stocks? Just an online broker and a subscription to the financial review, or is it more than that?
  You could start with that.
  When you decide to trade (or invest) you will get a sense of what is required.
  
• What is the biggest issue that you come up against being a trader?
  Yourself!
  
• And in your opinion what makes a successful trader, someone who makes money, as opposed to someone who loses.
  Plenty of threads here on luck, investing, trading, gambling, ...
  
• Do you have a system? i.e. do you look for stocks in a particular position and invest a certain way
  Some have systematic trading system, it does everything for them.
  I'm a gambler, there is no system in my madness.
  
• And i'd like to know about how you get your information (no need to reveal sources), but i would like to know if your just reading the paper or your close to the coalface, or how in depth you go with the graphs to make your choices.
  Same as you ... Newspaper, TV & Magazines!
  Library, ASX Reports (especially Quarterly Reports).
  And forums like ASF!
  
• I would also like to know a little about how much to put on a stock? How do I decide whether to invest a little or a lot?
  That depends. Learn a lot about yourself. Are you a trader or are you an investor?
  Depends on your financial position and attitude to risk.

burglar

[joehann]

Thanks for indulging my curiosity and answering the questions burglar.

I once did up an old jeep, it cost me more than 15k


I'd love to get a few more responses from anyone who can be as candid.

[matty77]

Hi,
I am new to this forum and stock trading, and I am wondering if it is for me or not. I was hoping I could get some input from people who trade about the following.

1. I would like to know how stock trading effects your life?
   Not at all.
   
2. How much time per day/week/month do you spend doing it?
   Approx 1 hour per week
   
3. Is it something that you do by yourself or is there a partnership or team of people you invest with?
   Myself
   
4. How has the money changed your life? Do you make what you expect to make, is it consistant (over the month, quarter, year)
   It hasn't changed it at all, its still ALL invested
   
   
5. What tools do you need to trade stocks? Just an online broker and a subscription to the financial review, or is it more than that?
   Just commsec - thats it. Plenty of research though through other means...
   
6. What is the biggest issue that you come up against being a trader?
   Recommendations by idiots that have no idea, a "sure thing"
   
7. And in your opinion what makes a successful trader, someone who makes money, as opposed to someone who loses.
   Knowledge and experience / trial and error
   
8. Do you have a system? i.e. do you look for stocks in a particular position and invest a certain way
   Yes
   
9. And i'd like to know about how you get your information (no need to reveal sources), but i would like to know if your just reading the paper or your close to the coalface, or how in depth you go with the graphs to make your choices.
   Internet, Magazines, Other People
   
10. I would also like to know a little about how much to put on a stock? How do I decide whether to invest a little or a lot?
    Depends how much capital you are starting with, how long you intend to hold the stock etc

Thank you in advance.

Joehann.

answers above.

[Pnut]

1) Trading has improved my knowledge base and myself as a person. I take more time to consider everything I do. I make far better financial decisions now then what I did when I first started out working my first business.
2) I trade FX so I pretty much start Monday morning at 8am and finish Saturday morning 8am.
3) I try to get a group going when ever possible but in the trading world sometime its hard to keep your account above board when your brokerage goes into receivership.
4) The ATO really enjoy my winnings when ever they get the opportunity. However the last few years have seen some dramatic changes to the markets. It is not an easy fete to trade consistently. Even when your stock has everything going for it the price drops.
Why does the price fall. It could be any reason one of the big share holders could be getting liquidated. Mum and dad investors are selling out and paying down their debt. The list goes on and on.
5) You require knowledge, experience, enthusiasm, decisiveness, persistence and faith in yourself. If you wish to succeed prepare yourself to make your biggest money toward the end of your trading career not the beginning.
6) Your lack of knowledge, experience, enthusiasm, decisiveness, persistence and faith in yourself.
7) A successful trader would be a trader that trades consistently. My Aim is for 20 successful trades in a row. I believe I am getting close to that target.
To Clarify. 20 trades that have a good setup, my entry is good and clean, my targets and stops are realistic, my exit is to the plan. Regardless of if it wins or loses.
8) I use Ninja Trader it gives me the ability to design and construct various trade systems. I can ask the market how the winners win and I can be ready to trade with them when the opportunity next arises.
9) I just use charts as it is the flow of money over time.
10) As little as possible until you get experience and knowledge you are currently a walking bomb not an educated heat seeking missal. My opinion is you should look into FX the costs are cheap and you will be gaining experience & knowledge by making 3 or 4 trading decisions per day. Not 3 or 4 a month or year.
Hope this helps.
Pnut