I've got burned out working as an engineer so I took 3 months off to try trading and I havent think about going back since. If you can make it in trading I think the trade off is more than worthed, I have so much free time now, the down side is that you don't feel appreciated like you are at work and my some of my friends think that I am a bum. Go figure.
Total beginner looking for advice
- Thread starter stfarm
- Start date
Dont knock sharebuilder. It all depends on what you want to do.
If your looking to buy and hold for over a year, sharebuilder is good enough. $4 trades. Free dividend reinvestment plan.
I think I am responding to a post by a troll, but you guys were knocking sharebuilder. I like to keep my long term accounts seperate from my active trading for many reasons. First is security, by having seperate accounts, its more difficult for someone to steal cash from ALL of your accounts. If one account gets robbed, then you have other accounts in which to work from. Second is the seperation of your trading account from your longer term holdings. You dont want to intermingle the two together mainly for temptation reasons. You might decide to cash out your long term accounts to have available more funds for trading.
Sharebuilder is perfect if you want to buy&hold etfs and stocks for long periods of time. It makes sense for a ROTH IRA or TRADITIONAL IRA ACCOUNT. Its much cheaper then other services. Its free with $4 trades. Although, these trades are made on Tuesdays and probably not at the best price. If your buying and holding for over a year a ETF or stock, then you dont need the best price.
If your looking to buy and hold for over a year, sharebuilder is good enough. $4 trades. Free dividend reinvestment plan.
I think I am responding to a post by a troll, but you guys were knocking sharebuilder. I like to keep my long term accounts seperate from my active trading for many reasons. First is security, by having seperate accounts, its more difficult for someone to steal cash from ALL of your accounts. If one account gets robbed, then you have other accounts in which to work from. Second is the seperation of your trading account from your longer term holdings. You dont want to intermingle the two together mainly for temptation reasons. You might decide to cash out your long term accounts to have available more funds for trading.
Sharebuilder is perfect if you want to buy&hold etfs and stocks for long periods of time. It makes sense for a ROTH IRA or TRADITIONAL IRA ACCOUNT. Its much cheaper then other services. Its free with $4 trades. Although, these trades are made on Tuesdays and probably not at the best price. If your buying and holding for over a year a ETF or stock, then you dont need the best price.
Do not get investing confused with trading. Trading is done on a much shorter time scale and requires very different skills. Both the investing and trading world is inundated from Wall Street to the Internet with hucksters offering all manner of advice and selling all manner of "systems" for selecting stocks, etc. Do not allow yourself to be suckered by these folks. What they offer is almost without exception virtually worthless. And that goes especially for the advice of so-called stock "analysts". There is however a few stock rating services that are independent of Wall Street and can more or less be trusted to offer reliable advice to the average investor. One of these is Morningstar. Also fairly reliable for investors is the Motley Fool Web Site. Also, you have no doubt seen Cramer throwing chairs on TV. Read his book if you like, it's pretty good, but be very cautious taking his advice re which stocks to buy. Learn to use and interpret company financial information available free via Yahoo.com.
Burnout was the reason for my making the transition, too. If I had felt appreciated at my job, I might never have left
They did me a favor actually. Let me add this for our new trader. Take the time to learn about options and the various risk managing benefits they provide. I would never consider trading without that knowledge. Plenty of new traders are soon out of the game because they didn't manage risk. My favorite book on options, likens the traders life to that of a prize fighter. You have to learn to take a blow before you can expect to deliver a knock out punch. If you get hit badly and often enough, you'll soon be "down for the count". Options strategies allow you to manage risk very effectively.
As a trader (risk manager) you need to look at this as your own business. Often you will need to be focused during the trading day. Distractions from your spouse or friends will not help to improve your bottom line. A dedicated trading office (in my home) eventually was the solution that worked for me, though I had actually considered renting office space in town just to get away from the routine distractions around the house. For what it's worth, I take the time to shave and get dressed in the morning (you know, no PJ's). I found that it helped to put me in a more professional frame of mind. But that's just me.
Good luck and don't stop asking questions. You have a steep learning curve ahead you. It's fun and definitely worth it.
That is a tall order and many books have been written about it. Read them. Beginner books you might consider:
David Nassar, Rules of the Trade
Josh Lukeman, The Market Maker's Edge (the title based on marketing purposes, no dout, but still has some good basic information)
Dr. Alexander Elder, Trading for a Living, is something of a trading Bible.
Can probably pick them up used pretty cheap on the net.
I suggest you paper trade and see how you do. Paper trade simply means you mark the price paid, price sold, and profit and loss in a tracking system. Be honest in this system, or it will do you no good. This is most easily tracked for swing trades, i.e. you buy or short one day and sell or cover either the next day or next few days, weeks, etc. You can also paper trade day trades, i.e, you buy and then sell in the same day, you just have to do more to track them.
You can get demo accounts with a number of brokers if you want to see how the trading software looks and handles without risking any money.
Cybertrader has a demo. Try it. They are one of the top 3 or four brokers out there, but you have to trade actively to avoid paying steep trading fees for software and data. I do not suggest them as your broker to start, but later, say in a few years after losing money, when you start to really figure it out and hopefully in the 3rd year you start to make money, you can switch over to them.
If you want to track a series of portfolios over time, Yahoo Finance is quite good for a free site.
Watch Bloomberg TV and or CNBC, and listen to Jim Cramer on his radio show. This has to be done simply because so many traders do so, not because they have anything critical to offer (though sometimes they are pretty good). For a beginner, they introduce you to the language and news focus of traders. If what they talk about is confusing to you, then you are not ready to trade. You need to do more research and reading.
If you insist on buying and selling right away, make sure you are aware of chart performance of the stock and any pending news events such as earnings releases. Big moves happen on earnings releases, and sometimes you get rewarded and sometimes killed. See what happened to ERTS and WFMI on November, 3, 2006, for example. These moves started the previous night after the companies reported earnings and made forecasts.
I should mention that the current time frame strikes me as rather problematic for starting a trading career. Not saying the market is going to go down, just saying that it has gone up pretty strong on a good but not great fundamental backdrop, which is why I am almost 100 percent daytrading now, rather than swing trading.
Could fill a book with this stuff, but that's a start.
David Nassar, Rules of the Trade
Josh Lukeman, The Market Maker's Edge (the title based on marketing purposes, no dout, but still has some good basic information)
Dr. Alexander Elder, Trading for a Living, is something of a trading Bible.
Can probably pick them up used pretty cheap on the net.
I suggest you paper trade and see how you do. Paper trade simply means you mark the price paid, price sold, and profit and loss in a tracking system. Be honest in this system, or it will do you no good. This is most easily tracked for swing trades, i.e. you buy or short one day and sell or cover either the next day or next few days, weeks, etc. You can also paper trade day trades, i.e, you buy and then sell in the same day, you just have to do more to track them.
You can get demo accounts with a number of brokers if you want to see how the trading software looks and handles without risking any money.
Cybertrader has a demo. Try it. They are one of the top 3 or four brokers out there, but you have to trade actively to avoid paying steep trading fees for software and data. I do not suggest them as your broker to start, but later, say in a few years after losing money, when you start to really figure it out and hopefully in the 3rd year you start to make money, you can switch over to them.
If you want to track a series of portfolios over time, Yahoo Finance is quite good for a free site.
Watch Bloomberg TV and or CNBC, and listen to Jim Cramer on his radio show. This has to be done simply because so many traders do so, not because they have anything critical to offer (though sometimes they are pretty good). For a beginner, they introduce you to the language and news focus of traders. If what they talk about is confusing to you, then you are not ready to trade. You need to do more research and reading.
If you insist on buying and selling right away, make sure you are aware of chart performance of the stock and any pending news events such as earnings releases. Big moves happen on earnings releases, and sometimes you get rewarded and sometimes killed. See what happened to ERTS and WFMI on November, 3, 2006, for example. These moves started the previous night after the companies reported earnings and made forecasts.
I should mention that the current time frame strikes me as rather problematic for starting a trading career. Not saying the market is going to go down, just saying that it has gone up pretty strong on a good but not great fundamental backdrop, which is why I am almost 100 percent daytrading now, rather than swing trading.
Could fill a book with this stuff, but that's a start.
Steve,
Stocks for investing may be different from stocks selected for trading. Another point to consider is that investing books stress the importance of diversifying as part of a risk management plan. For practical purpose however, this simply isn't possible unless you are wielding institutional strength clout. We "small potatoes" are better served trading in the Exchange Traded Funds (ETF's). An ETF is really a basket of stocks which trade on the exchanges as a single stock. Take the QQQQ ETF for example. Owning shares of the "Q's" is just like owning a portion of the 100 firms which make up the NASDAQ 100. In one transaction you have effectively purchased the diversification that owning all 100 stocks separately would provide. That's a bit of an oversimplification, but it serves to illustrate my point. If one stock WITHIN the Q's should tank, the value OF the Q's is basically unaffected. If you write covered Calls against the Q's, you will have achieved an even greater diversification effect.
Don't like the NASDAQ 100 but prefer the semi's instead? Consider SMH for your ETF purchase. It too is optionable...actually I think they all are. There is a huge selection of ETF's to choose from. Something for everybody.
Lot's to consider. I remember what that felt like. One step follows another and before long you're there.
Stocks for investing may be different from stocks selected for trading. Another point to consider is that investing books stress the importance of diversifying as part of a risk management plan. For practical purpose however, this simply isn't possible unless you are wielding institutional strength clout. We "small potatoes" are better served trading in the Exchange Traded Funds (ETF's). An ETF is really a basket of stocks which trade on the exchanges as a single stock. Take the QQQQ ETF for example. Owning shares of the "Q's" is just like owning a portion of the 100 firms which make up the NASDAQ 100. In one transaction you have effectively purchased the diversification that owning all 100 stocks separately would provide. That's a bit of an oversimplification, but it serves to illustrate my point. If one stock WITHIN the Q's should tank, the value OF the Q's is basically unaffected. If you write covered Calls against the Q's, you will have achieved an even greater diversification effect.
Don't like the NASDAQ 100 but prefer the semi's instead? Consider SMH for your ETF purchase. It too is optionable...actually I think they all are. There is a huge selection of ETF's to choose from. Something for everybody.
Lot's to consider. I remember what that felt like. One step follows another and before long you're there.