Newcomer requires share trading advice.. please!?

dUnCan

I'm new to MSE (like joined today new) but have been scouring other threads taking in the excellent advice from some of the contributors over the last few days.. I have decided to post myself in the hope that some of you might also take pity on me to impart your wisdom?!
I am VERY new to any trading.. In fact i don't yet trade! I have a couple of fantasy accounts, am reading some relevant literature and spend a lot of free time researching on-line/reading forums - I would welcome any advice from those more experienced than me.. When i start up for real i'm starting with approx 5k.. I'm not really the impulsive gambling type so am looking at building with many small profits???

Who will be the best execution only broker for me?? (Cheapest trade prices but best response time/reliability)??
Are there market areas that are good areas to concentrate on more as a newbee??
I work freelance so have varying amounts of free time - Is fairly short term trading a realistic aspiration for me??

Many thanks (optimistically in advance!)

chris_m

For brokers, http://www.x-o.co.uk/ do fine for me. £5.95 per trade (buy or sell), and don't forget to factor in stamp duty at 0.5% on most purchases.

As to strategy, I wouldn't recommend that you put all your £5K into one company but split it and buy several. Granted, your dealing costs will be higher but your risk can be reduced by diversifying - if you put it all in one company and it drops 10% you've lost 10%, but if you put it in several the chances are better that they won't all drop. Personally, I'd do like I did when I started and split it into five, putting £1K into each. Others may disagree, hopefully they will also be able to offer their suggestions.

My plan when I started was to aim for 3% gain (as being better then my ISA was paying) and switch to a different company when I got 3% or better. I reckoned f I could do that every 8 weeks or so, that'd be around 27% for the year. That was working quite nicely, however many of my more recent trades have been AIM-listed oilers and miners (such as several mentioned on these boards), several of which looked like doing better then 3% so I held on to them and have had much better returns. I certainly haven't tried for really short-term trading (like day trading), I think more capital is needed than I had or you have for small day gains to offset dealing costs. I think the shortest I've held anything was three days when I settled for a 10% gain. I could have held for about 12% but I could equally have missed the subsequent drop back to 5%.

The best description I have for myself and my strategy is "lucky amateur" - others may be less polite, but I'm not complaining at how it's turned out so far ;-)

Jake'sGran

I have been investing since the 80s. The first share I bought was £1000 worth of NFC (my brother was working there at the time and there was no dealing charge?) One way or another this company changed a lot and I got cash back more than once plus dividends. Now I have shares in DeutschePost who bought them.

Do you want to buy shares or funds? I did go straight to the fund operator with my first one - Fidelity Special Situations and it did extremely well. Since then I have used The Share Centre (Share.com) for shares. They charge £7.50 per trade up to a certain amount or much less for frequent traders.
I buy funds through Hargreaves Lansdown, a company used by a lot of people on this forum. They discount all or most of the upfront charge levied by fund managers.

Like Chris-m I have been buying some AIM listed shares lately. One of them has doubled in 2-3 months.

Good luck.

dUnCan

Thanks guys for you insights.. 'Jake's gran' - As my (as yet limited) plan stands so far my intention is to trade in shares, hopefully over as short a period as possible without delving into the world of day trading etc?! My theory is I can make as many as possible small profits that will hopefully add up to a good return - I'm trying not to be unrealistic about the time it will take me to consistently get trades right.. Impatience has been a failure of mine in the past!
Chris_m - I have seen x-o both on other posts and just through some general googling.. They do seem to offer the best price?? I was very interested to know whether the lower price was justified by the lack of other content from them (ie: charts & other analytical info)?? I haven't seen anything said about the reliability and speed of the sites transactions?? It's my understanding that, especially because I'm trading with relatively small amounts of money over shorter periods for small gains any change in price will be a big impact on my margins?!
I like the potential gains offered in the aim but am quite wary of the attitude to the extra risks that is much discussed on these boards?? I'm not saying I agree and that it's too risky but I think it's sensible to work Upto it once I have gained more experience??
I would also be very interested to know about the types of research that I definitely need to be checking before (plus obviouls during!) trades?? I've read much about charts - particularly candlestick type but surely this sort of information isn't sufficient?? What good resources can I use to get all of the analytical information I'll need and do sites cover all markets like ftse & aim or do I need multiple resources??
Once again.. Many thanks for all of your help and advice so far..

Jonbvn

OP,

I would suggest you look at the Motley Fool website, which is targeted more at investing than MSE.

sabretoothtigger

but surely this sort of information isn't sufficient??

:laugh: Thats all your getting. It isnt enough, thats why its risky to trade. Investing in funds is far less volatile.
Sounds like you need to read on things for at least a year before spending any decent amount of money.

The odds of trading are similar to gambling, the house wins. Investing average gain is like 5% a year. If you have money to burn, jump in it

tradetime

Starting with that amount of capital, and providing short term means short term I would give serious consideration to a spreadbetting account, not for everyone I know, but then neither is short term trading.

dUnCan

I have started looking at other, more investment specific sites and will definitely be spending more and more time there.. I've started withers MSE forums because I've liked a lot of the advice offered and there seems to be a good, friendly, helpful on-line community here - but of course thank you for the recommendation johnbvn..
Sabretoothtigger, I have seen many posts from you and have always been interested to read on your thoughts.. I don't only intend to study charts.. I'm aware of news and economic factors to consider and of course I'm aware of investigating anything and everything I can find about any company.. I'm not entirely aware of the best ways of finding out all of this yet but what I was mainly asking was if anyone wanted to point me at good resources that would suit my level.. I think you might be right about the time needed though?! I have told myself that I need to be fantasy trading from between one and six months but if I need it I will of course spend whatever time it takes.

neilsedaka

I would say read http://thesharehub.com in depth, choose say five stocks that you fancy, research those five in detail by reading their RNS announcements, looking at the level of experience of the board of directors and reading the forums for each stock on http://www.iii.co.uk and http://www.lse.co.uk . If you attempt to do more than that there is a danger that you will be overwhelmed with information and not get anywhere. For a broker I too would recommend http://www.x-o.co.uk . In my opinion the safest share on AIM is still Xcite Energy (XEL) which carries a low risk and has great potential. XEL should definitely be one of your five.

dUnCan

Thank you neilsedaka.. It's been a long few days at work at the back end of this week but i will be looking with keen interest at everything you suggested tonight..

Having re-read some of my responses i'm not sure if, to people that don't know me personally, whether i come across as grateful regardless of the advice that is offered.. No matter what - I am the inexperienced one and I started this thread to get as much advice as possible from as many different points of view as possible.. If ever i seem ungrateful please excuse me. I am not so, i promise. I very much appreciate everyone who has or does take the time to share the wealth of their experience with me.