Am I going into trading too soon?

Gadfium

_Super wrote: »

Honestly I'm a bit surprised at how stupid you guys are. Either you think I'm a complete idiot or you're the idiots.

I think that most of people will be able to work out the answer to that one in a fairly short space of time.

After all, you're the one that said this:

_Super wrote: »

I've managed to deposit the maximum of £15k into my S&S ISA for the year but I'm not really the passive income type. I wondered if £15k is a reasonable amount to start day trading with?

The biggest issue I'm facing is the trading fees which for my particular broker is £12 per trade and is certainly going to add up. Sure I don't mind paying £24 in fees if the trade makes me £200 but I'm more focused on how much money I can lose rather than how much I can make.

Should I give it a few more years so I've got about £45k or is £15k a good starting point?

and then did a prompt about turn less than 2 hours later:

_Super wrote: »

Thanks for the replies. I think I'll leave the day trading as I'm definitely not experienced enough and have probably not taken into account the true loss potential of trading.

_Super

redbuzzard wrote: »

lots of people brighter than me think you can't beat buy and hold by doing that.

Anyway, you've had your fun with us, and we have to be nice to you because you're new, so goodbye, and good luck from this "stupid" person who tried to help you

I wonder how many people were told they can't do this or they can't do that because x and y said so.

I appreciate your input I really do but I'm not the type of person to not try something because someone said I shouldn't. It's served me well so far in life and if anything negativity makes me work harder.

I do however agree that I am far too inexperienced at the moment with little capital which is why I said I'll probably give it a try a few years down the line.

chronicsaver

The main reason why people lose so much day trading is because they haven't got a clue what they're doing/when they see a massive red in their account they don't stick to their convictions and trade out. As people have said, start off with with a broker such as HL,TD, Barclays etc and look for shares to Buy and hold. Once you learn what drives shares up and down, then look to start day trading because the volatility sometimes can be crazy.

It's also garbage that you need a massive amount in your account to day trade. I've got a full time job but only day trade with £3,000 in my IG account. As long as you don't leverage up to much and have an effective strategy, then you'll be fine. Markets are good to trade at the moment, particularly European Stocks, but I'd be quite wary of the FTSE.

Oh and another thing as well, know the economy/what affects financial markets before you know the "technicals". Read stuff like the FT, Bloomberg, ADVFN and the Investors Chronicles. All have served me well to date.

chronicsaver

redbuzzard wrote: »

Ah, but when do you sell? If you sell every time something goes down, you'll lose money. If you hang on, it might go down some more. If you're not careful, you'll finally decide it's a crash and sell at the point where buying would be quite good value.

I wonder how much research you have done, or to what extent you have thought this through.

I think it was Tim Hale who wrote that if you gave the average US amateur investor $100 and 5 years, he would typically turn it into $90, or something along those lines.

That happens because people buy when they see the market or the stocks they are following doing well, and they sell when they see them doing badly. They almost never sell at the highs, or buy at the lows. Often they will end up doing almost the opposite.

Here's how it happens, apologies to almost everybody for this old chestnut:



Believe it, plenty have done it.

What plan do you have that will enable you avoid this, as a trader rather than a buy-and-hold investor?

This is soo soo true it's unbelievable. We've all suffered from it at one point!

TheTracker

It will always be too early.

Herbalus

_Super wrote: »

I didn't say I would withdraw my money AFTER the market plummets, what good is that lol?

A question to ask yourself: what insider knowledge or talent do you have that means you are capable of predicting a falling price before it happens?

It always makes me chuckle when somebody says they will always sell before the fall - it's inevitably always somebody who has never actually been invested in anything.

And when you've come to the conclusion that you have no market "edge", which means you don't have insider market knowledge that others lack (and the populist news and market commentaries are precisely the opposite of that, because everybody has that information), you will realise that any "prediction" you make of a falling stock will be blind luck.

_Super

Herbalus wrote: »

A question to ask yourself: what insider knowledge or talent do you have that means you are capable of predicting a falling price before it happens?

It always makes me chuckle when somebody says they will always sell before the fall - it's inevitably always somebody who has never actually been invested in anything.

And when you've come to the conclusion that you have no market "edge", which means you don't have insider market knowledge that others lack (and the populist news and market commentaries are precisely the opposite of that, because everybody has that information), you will realise that any "prediction" you make of a falling stock will be blind luck.

It's not about predicting. It's about reading the financial papers, paying attention to news about that particular stock. Companies take hits for a reason and that reason is usually very fast into the news. If you react to that news you'll save your money.

There is a company I'm following at the moment who's main consumer has said they won't be renewing the contract. This contract is worth £1.6billion per year so that is a hefty loss of money and I certainly think the price of the company will drop, don't you?

Now obviously I can't do this with every company and it's very time consuming to do so but as already pointed out companies don't just wave a flag letting the whole world know... you do have to read the correct websites, read the correct papers and stay up to date as best as possible.

And on the flip side a medical supply company that produces needles, syringes, bandages etc secured a contract with the NHS... I think the companies share price will rise.

I don't know for certain I'll monitor these kinds of things over and over and if it turns out that I was right then I'll start to develop a good pattern for recognising when to buy and when to sell.

Thrugelmir

_Super wrote: »

There is a company I'm following at the moment who's main consumer has said they won't be renewing the contract. This contract is worth £1.6billion per year so that is a hefty loss of money and I certainly think the price of the company will drop, don't you?

So what do know that others don't? If the news is already in the public domain then the market will be pricing the news in.

chronicsaver

Can I ask why people are being so hostile towards this guy?

_Super

chronicsaver wrote: »

Can I ask why people are being so hostile towards this guy?

I think they think that anyone who's interested in trading is a moron who's destined to lose their money. I'd like to think I'm a bit smarter than your average Joe and with 6 - 12 months of reading and studying the markets I think I would have a decent shot to make more return than what I get from a fund.

I guess they don't seem to think it's possible for some reason. Perhaps their own experience of failing is affecting their judgement or they're responding as if it was me in their shoes instead of them in my shoes.

Thrugelmir wrote: »

So what do know that others don't? If the news is already in the public domain then the market will be pricing the news in.

There are plenty of articles out there. It's just if you can be bothered to read them. I don't have any special insider information I simply read what's in the headlines. The news will come after the loss of course but the faster you react the less you'll lose. You could buy stocks from a company and because you didn't read the news you'll wake up one morning and you'd have lost 15% and wonder !!!!!! just happend... But if you read latest news regarding that stock there is a good chance you would be able to get out in time.

I would link the articles but I still cannot post links god dammit!