• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Beginner to trading shares

Discussion in 'Beginner's Lounge' started by lachlanp, Dec 30, 2013.

  1. lachlanp

    lachlanp

    Posts:
    6
    Likes Received:
    0
    Joined:
    Dec 30, 2013
    Hello I'm Lachlan
    I'm 17 years old and plan on buying/selling shares on my mothers accounts (with her permission)
    I am interested in trading "penny stocks" I'm interested because I don't have much capital being 17 and you can buy shares for $1-$5.
    I was wondering if anyone knew of where I can start trading and where I can research stocks got under $5 everyone seems to know about all these stocks but where where do you find them? Newspapers, certain websites?
    I am thinking of opening up an online brokerage accounts E-Trade or CMC I think one of those two are they good?
    If anyone has any tips or tricks please tell me :)
    I look forward to seeing your replies

    Thank You
     
  2. Valued

    Valued

    Posts:
    472
    Likes Received:
    10
    Joined:
    Aug 31, 2013
    The first thing you need to learn is that shares arn't cheap or expensive based on their price. It might be better to buy 10 shares at $70 each than 100 shares of $7 each. Either way you have invested $700. The reason for this is as follows:

    Company A is worth $100 and it has 5 shares. They are worth $20 each.

    Company B is also worth $100 and is exactly the same as Company A in all respects. It has 10 shares. They are worth $10 each.

    You should be completely indifferent as to whether you buy the shares in Company A or Company B if they are exactly the same. It does not make a difference if you have more shares if you buy Company B because if you start with the same capital it will be worth the same!

    Further, penny stocks are more of an American term. In the US they refer to illiquid stocks trading up to a few bucks each. However, in Australia, stocks from $1 to $5 may be highly active and extremely liquid.
     
  3. joshwelsh

    joshwelsh

    Posts:
    12
    Likes Received:
    0
    Joined:
    Jan 10, 2014
    be careful with penny stocks mate, majority of penny stocks are illiquid which means even if you buy the stock doesn't necessarily mean you will be able to sell it straight away as their may not be enough buyers in the market so be careful i suggest looking at the volume of the stock before buying any penny stock this is done very easily if you have the correct software volume histogram is good start. BUt again be careful as volume only tells one half of the story, the volume can spike for many reasons options expiring, market news do so more research first

    Furthermore, a majority of penny stock companies are **** (thats why they stay down as penny stocks) i believe if you want to play the penny stock game the best way to do it is to short penny stocks on their decline, many penny stocks will have major spikes in their price due to "hype" from spam emails or market news but at the end of the day the company is fundamentally flawed and this hype only last so long, betting against the company to fall is the best way in my opinion when the price is jacked up, watch the chart after a spike it will generally move side ways for a bit which indicates hype has reached its peak once the sideways action has its first "down" day thats when i would suggest to get in.

    A great advocate for this strategy is tim sykes
    www.timothysykes.com

    hes the master of shorting penny stocks.

    Take a look, you might find shorting penny stocks hard to find in the ASX but there are plenty of options in the US

    nonetheless you need to do more research before jumping into the stock market

    ^^ all the above is in my opinion by the way
     
  4. burglar

    burglar

    Posts:
    3,661
    Likes Received:
    1
    Joined:
    Nov 22, 2010
    The Weekend Australian is one place to start.

    First tip ... don't take tips.
    Second tip ... if you take tips, do your own research and take responsibility.
     
Loading...

Share This Page