Stock trading for complete beginners

Gadfium

So, to summarise. If you are going to go into day-trading then make sure that you are in the 5% that succeeds.


I'm pretty sure that the ones in the 95% didn't start out with the plan to be in the 95% pile. I can't imagine that they woke up and thought "Hell, yeah...today's the day that I embark on a plan to lose a shedload of money"

flashgordon666

answered
After some advice, new account on TD direct investing, want to put money into CRUDE OIL,

1. is the symbol (CLX6) crude oil
2. trying to put money into this stock via TD direct investing and can;t seem to find the symbol its like you cant trade commodities on this site, is that right?
3. I read you can only hold CFD commodities for 30 days is that current plus you need to pay 2% ive never heard this, is this right?

hope you can help

I called up they dont do CFDS they refereed to SAXO company

fairleads

fireblade28 wrote: »

This year I'm running at 15% average. Which is OUTSTANDING. This almost never happens. Next year I may be lucky to get 4% who knows.

While your profits may well be running at 15% you've made nothing until you cash in, which is the difference between being a long only investor and a frequent trader. The former's profits are on paper whereas the frequent trader's profit is in the bank - and without the benefit of a complicated /comprehensive algorithm. Its about patience, discipline and watching the crowd.

fairleads

Malthusian wrote: »

The vested interests would love it if Joe Average could trade his way to being a millionaire. If everyone was doing it that translates into millions and billions in transaction fees, not the paltry few thousand they collect as he churns his £30,000 life savings for the 100th time in the belief that this time his research has spotted the big score.

The vested interests i'm referring to are financial advisers and fund managers, they don't want the man in the street investing directly they want/need us to invest through them and into UT and IT funds. The more they manage the bigger their fees

bulltraderpt

fairleads wrote: »

While your profits may well be running at 15% you've made nothing until you cash in, which is the difference between being a long only investor and a frequent trader. The former's profits are on paper whereas the frequent trader's profit is in the bank - and without the benefit of a complicated /comprehensive algorithm. Its about patience, discipline and watching the crowd.

Spoken like someone who trades.

That is certainly the big advantage that a day trader has over a buy and hold / swing trader. The swing trader or buyer of the index may make more over the long term, but the day trader usually gets opportunities every day to which, if they call it correctly can be profitable.

Plus why do we trade? To make money, as long as you can ride out the swings in the market currently history dictates the buy and holder does OK, but, as we all know, the markets can and does change.

And as the advert says: Past performance is no guide to future returns, Plus you may get less than you invested back.

Plenty of articles in the Investors Chronicle in recent time stating that future returns may not be as good as previously because of the current macro environment.

bowlhead99

fairleads wrote: »

The vested interests i'm referring to are financial advisers and fund managers, they don't want the man in the street investing directly they want/need us to invest through them and into UT and IT funds. The more they manage the bigger their fees

I don't have any problem with a qualified financial adviser, regulated fund manager - or even a lazy investment journalist or anonymous forumite here - warning people about the fact that they might lose their shirts day-trading, and saying that holding a diverse portfolio of assets via regulated collective investment schemes is a much more sensible, reliable, lower risk way to likely financial success.

Yes, it might give their job prospects a boost when they say that. But if they instead said you were as likely to make a decent (equal or better) return from day-trading as you were from broader participation in the markets through funds, they would be lying their asses off. Because the statistics do not bear that out at all. So, I'm glad they don't say that, even though their preferred route - telling us the truth - might appear to smack of conflicts of interest.

Sure, someone can say that it is perfectly possible for someone to make 30%, 50%, 80%+ in a year from day trading, and they are living proof, so they don't understand why society is comfortable with dissuading people from doing so, and it is probably due to vested interests of our lizard overlords who profit when you use banks, advisors and fund managers to grow your wealth instead.

But the reason people should be dissuaded from becoming a daytrader on the basis of hearing of someone making regular 50% returns year in year out, is because the person highlighted in the book or on TV or on a forum as achieving that, is a statistical outlier - and if you draw a bell-curve distribution they are right at one end of it. Sure, it is possible and there are books on people who have done it. But if the 'average' person tried to replicate the success, even with an equivalent or greater level of dedication and effort, they are much more likely to fall into the 95%+ who don't achieve that, rather than the few percent who do.

I might as well tell you that there is no point investing life savings to get a few thousand pounds a year growth when you can just go work a day job and earn a reliable 6-figure salary from an employer for an office position. After all, a few percent of people can indeed do that, and there are several examples of people with high-paying jobs on this forum. But it doesn't mean the average person will be able to achieve that. It would probably not be sound advice to tell them to reject a promotion within their current reliable employment to an annual salary of £30k, quit their job and wait around unemployed until a £130k job shows up in their town and apply for that instead. Their boss, telling them not to quit, has an apparent vested interest in them not quitting, but he is still probably giving them sensible advice.

Similarly a young surgeon specialising in prosthetic hip replacements might be accused of 'vested interests' if he tells a 50 year old smoker to quit ASAP. After all, if the smoker doesn't die of lung cancer age 80, and his heart and lungs keep going until his joints start to give out, he's much more likely to be in the market for a new hip at age 85, before the surgeon retires. So it probably helps the surgeon's business prospects to keep people around until they get to old age and want help with their mobility. It doesn't mean they are acting against the smoker's best interests when they tell him to quit. Telling him to quit is the same - perfectly sensible - advice that I would give him as an independent observer, which just happens to serve their interests too.

Meanwhile the smoker's uncle, an 80 year old smoker who is not dying of lung cancer, might say that smoking is fine and he is living proof that you can smoke a few packs a week without getting cancer (yet). He says the qualified respectable prosthetics surgeon is acting in self interest when saying most people will do badly from smoking, and you should ignore such people as they do not have your own interests at heart. He chooses not to highlight that having the guy continue smoking will serve his own interests by giving him someone to chat to under the smoking shelter outside the local pub.

Similarly, someone here recommending the average punter takes up day trading or gold or silver investing or whatever, is serving his own interests by encouraging people to get involved in that activity. Winning is easier if there are plenty of mug losers around.

fairleads

Bowl head
The mug losers are those who stay long only all the way down in a bear market, all on the advice of vested interests.
Further, the MO of the frequent trader means they are, more often than not, buying off others who are taking profits. After all not everyone gets in at the bottom.

Apodemus

fireblade28 wrote: »

The only true way to make money on the stock market is through using index tracker funds. Which track the markets as a whole.

That's a bit of a sweeping statement! Plenty of small investors do perfectly fine without holding index trackers in their portfolios.

EdGasket

I've always done better on individual shares than trackers. Guess I am better at picking a good stock than working out what is going on in the world. E.g. I never thought the FTSE would be this high after the Brexit vote; can never call the macro-economics right so have given up on it.

bulltraderpt

EdGasket wrote: »

I've always done better on individual shares than trackers. Guess I am better at picking a good stock than working out what is going on in the world. E.g. I never thought the FTSE would be this high after the Brexit vote; can never call the macro-economics right so have given up on it.

There's an interview kicking around you tube where a Technical Analyst for IG iirc, states his performance was always better when he knew less.

So you may well be right not to bother.:cool: