Bit of constructive advice (if there is such a thing!) -
(1) Look at HotCopper's Statistics section (the drop down is in the My Account section on the toolbar above). The stats will tell you the most talked about stocks, the best tippers, and, importantly, the most "followed" HC tipsters. After a while you will learn - from reading - who is "spinning" their stock ("Ramping" - happens a lot in various forms - but that's a whole new subject) - and who are actually talking "good stuff").
(2) Identify one or two better posters in HC on a subject that interests you. ALWAYS trade share in an industry that actually interest you. There is no point, for example, trading shares in an insurance stock if you find the concept of actuarial valuation boring. If, for example, you like oil stocks, pick a few out there and do some digging.
(3) Never believe anything you read. Always Do You Own Research ("DYOR"). Never buy just because someone is giving you a tip. Look at the company closely before committing your own money to it.
(4) Have an exit strategy. Most people lose money not becuase they got it totally wrong, but because they did not know when to take profit or cut their losses. Hope is not a strategy. The sooner you learn that, the better.
(5) Paper trade first. For at least a month before you take the leap, trade on the back of an envelope as to where you would get in, and where you would exit. This will make you realise - without damaging your bank balance - that its harder than it looks.
(6) Discount the winner's boast. People always talk about what they make or made, not about the many times they lost. If someone makes $10, give it a week and they will boast about how they made $20. Conversely, they seem to remain awfully silent when they lose money.
(6) Only trade 5 stocks. Too often I have heard stories about people trading many, many stocks in the hope of making money. It is physically impossible to follow more than 5 stocks VERY closely - you can't possibly know too many stocks "better than the market does". Trust me - been doing this for 25 years, and 5 is my limit.
(7) Things look great at the top. Generally speaking, a market looks really good when it is topping, and a stock looks really good when it is peaking. Keep this in mind when everyone is talking about a stock: chances are they have already bought in and are waiting for "the last buyer" to be convinced to buy in.
(8) Things look rubbish at the bottom. Value is the proposition that a stock is undervalued, not just in financial terms but in emotional terms. When a stock is being "bagged" by posters, you generally find that everyone has been stopped-out and starts to whinge about management and the lack of direction of the company. Real value comes when you are patient and wait for this to happen.
(9) The market is ALWAYS wrong. If it was always right, it would be in a state of perfect equilibium and wouldn't move one bit. Take this statement to its ultimate conclusion and it means that you need to "beat the market" to create money. Not easy - that's what "Alpha managers" are paid so highly in the professional market!
and
(10) Have a goal. Don't be greedy on a trade, and don't whinge if you make 10% when a stock then goes up a further 10%. When you make your money, take it off the table. At a casino if red comes up 4 times in a row, just remember than the next roll of the ball still gives you a 50/50 chance of winning or losing. There is absolutely no correlation between the past and the future.
oh... and enjoy! (the moment you don't enjoy is the moment that you have lost passion - and should give it away).
