I'm a newbie too, so here's what I've learnt (in some vague terms) What Freehold and Glad said. DT thread can be brutal. Lost money there, which I was (luckily) able to make back through ST holds.
This sounds super vague, and everyone says it, but pick your entry and exit. I fell victim to fear of missing out waaaay too much (probably still do). Better to be a bit patient and wait for your entry. It's better IMO to miss profits, rather than make losses.
Inverse of that, watch your exit. If you're in profit in a stock, it's easy to get super confident and think it'll keep going up. But at some point it'll likely go back down (look at PLP today for instance). Though you might miss out on extra profits, better to gain some than none (or a loss).
And to help with all of that, I'd recommend focusing on a few stocks at a time and knowing them really well, rather than following stacks because you're afraid of missing out on one (I probably still do this actually), but having an only cursory knowledge of them.
So that's what I've sort of learnt as a newbie, through many mistakes, but all in my opinion
this thread is the one !! except maybe for the XEC thread...........be careful with the DT stuff, its a hard game if your not experienced, or your mindset isnt tuned to it. Perhaps my biggest lesson learnt is not to chase them........if a stock gets away, leave it, unless there is compelling reasons to get it...... If you miss the bus, just sit down and enjoy the view........another bus will be along shortly, and, you may even get a better seat !! Poster:valen1828 Date:16/03/16 Time:21:30:00 Post #:17293488
Hi @cbshares Getting stocks at there high points suits some traders just depends if they keep going up . Feel your pain all to well but will suggest you get some charting skills to help yourself along the way . You dont have get to complex for simple sifting and if you dont enjoy it why do it . Can be alot of fun and interesting as well . If you are going stt trade some charting skills is pretty handy imo .Even though you will find mostly fundmental tipping will outweigh technical s in numbers the price is best represented in the chart . You can freely get charts on the net or choose get paid subscription is oodles of stuff out there and on Hotcopper . Now your entering on tops will take on new meaning once you see it reflected in a chart . Get your head around the bell curve its one of the more easily read charts to explain your situation and where you need be . From it you can play around with your indication etc etc for what works on a simple chart and for your own setting . Ie you can reference off a pattern that is reliable and common for simple charting . This is a chart of a stock i have and and have for awhile some notes on it that may not be easy to understand but if you read a bit about the bell curve you will see where the lines begin to make sense if you put your self at or near optimum buy and sell postions .
This is not a ready reckoner for all stocks its just one that works very simply and easy to see the bell curve with .
Poster:webbj Date:19/03/16 Time:00:38:28 Post #:17316554
I have bought and sold shares for over many years, but never very seriously and never really 'traded' until more recently. Due to a change in circumstances/job situation early last year + a lower salary for the period, I cashed out a few blue-chips which I had bought a few years prior to lock in some gains whilst I was in a lower tax bracket. This turned out to be quite fortuitous, liquidating most of my stock portfolio in early 2015 then the market tanked shortly afterwards. So learning 1 - regardless of your skill, luck never hurts either. Not working full-time I had time to observe the market and opened a brokerage account with CMC wanting to learn more about stock trading (the $19 brokerage at CommSec just didn't seem sensible at the time for small trades).
CMC was between $9-11 per trade and seemed to work well. I deposited $25k into the account in June 2015 and started trading - not really knowing at all about day, short or medium term trading. To begin with I had no strategy. I am still tuning it now and the STT thread amongst others is an invaluable tool to learn from. I started buying things, often recent tech RTO's as I have an understanding of the sector, other-times shells and sometimes random companies that I found on HC. After three months or so it was clear I would have been just as well of plonking my money in an index fund:
I realised after a while that I was just doing all the same rookie mistakes, buying at tops when someone posted on HC or elsewhere that a stock was sure to be the next big thing. Buying a stock with a great 'story' or marketing but terrible financials or fundamentals, or buying a stock that was heading down down down and thinking I would be able to pick the bottom.
After refining and reading more I found an interest in the shells space amongst a few others so focused there, sometimes getting in before crowds, before a capital raising etc. Other times I just bought on a hunch and by luck it paid off, or tanked and I couldn't bring myself to sell until it my parcel was barely worth more than brokerage
After a few more months my returns from short term positions started improving, in January I deposited another $7500 into the account whilst a portion of my funds where tied up in longer 'short-term' positions! I put in more money as I was getting more confident, having turned the original $25k deposit into a balance of $34k
Since trying to be less silly and learn from the worse of the wise on HotCopper, other forums, podcasts + other sources of information my short-term portfolio has done pretty well. Its still lumpy but the original $33k is now worth around $43k which I am happy with on an overall basis but still have work to do. The recent returns are not trending at all the way I would like and I am taking steps to improve the situation: The recent down-trend is both a result of me being greedy and over-confident. learning 2 - position size (I bought overweight positions in two stocks, over twice my approx average parcel size per security)
learning 3 - taking profits & stop loss / take profit triggers (in both cases of the larger positions above, they rallied really well (above 40% each, but then retraced and I locked in little or no profit). I had a big portion of my account tied up, no profit to show and no money to pursue other opportunities. My entries were right, the exits were a disaster and what really matter.
Over the 9 or so months I have made 158 trades with brokerage totalling just under $1500. Traded just under 50 individual tickers and participated in two capital raising/share purchase plans. By individual ticker I profited from 28 of them and lost on 19.
10 individual stocks accounted for nearly 80% of my profits and the top 3 losers accounted for 50% of my losses. Hold times vary from a few months to within the day, although average I would think would be around 2-3 weeks. Over $2000 of the profits was just dumb luck.. I traded BUD (back when it was POK) and did really well, was one of my better ST trades and whilst in that position, I happened to hold a fairly large parcel of shares for a back-dated share purchase plan entitlement date. The SPP was 10c and stock traded at almost 20c on relisting. reminder - luck.. sometimes its just luck. If you can't get lucky, at least try and make sure you get the odds in your favour In terms of 'learned the hard way' moments, I think you can only really learn these yourself.. the hard way! My biggest learning in the same period has been outside this particular account, trying to catch falling knives (SGH for me) and in other cases trying to fight trends. Liquidity is important, you might get in - for a great price - but thats no use if you can never sell your parcel to someone else.
Cutting losses is hard and I still struggle, did that with two stocks today. Its a relief when you do and needs to be done.
learning 4 - the trend is your friend. Never try and fight it. Just don't.
I think some lessons (good and bad) you can only learn by doing. I used to try and watch paper-trade or follow stocks in watch-lists but found it just wasn't the same. Often now I take @Freeholds TM 'sniper entry' or a pilot position, as soon as I have some skin in the game, even if its a tiny, tiny parcel - I find its easier to pay proper attention and interest in a stock.
For more reading, obviously the STT threads, the STT Knowledge Library, Chat With Traders is a really good podcast series, over 60 hours of excellent interviews and otherwise its important to find your niche and then research it well. learning 5 - continuous improvement I know how to make money trading, its really easy. In fact anyone can (you just buy low and sell high ). Its working out, how to not loose money which is the most challenging in my experience! Trying to identify what I do wrong and take steps to stop myself doing it again has been challenging but something to keep doing. Apologies for the novel, hope its helpful. TL/DR; 1. Not sure there is a minimum amount of cash needed. For me $25k was ample and I almost always had 6 or 7 holdings at a time and up to 10 or more in some cases with that amount of cash. I'm sure its possible with much less, all one would need is more time (or skill) to compound their money.
2. Biggest learning - you will probably make most of the mistakes that everyone else does at some point. Just do your best to make that mistake with the smallest parcel/position possible Poster:mouse Date:19/03/16 Time:10:12:58 Post #:17317234
Just like any successful person always say's in life, failure is part of the learning curve but you must learn from the mistakes. It's hard when there is only a limited amount of funds so if you lose it will take a long time to get started up again... I remember @mosoeloe saying something about using pretend money at first, then after he was comfortable he began trading, this is a very sensible approach.
When i first started and have said this many times, i was sheep that followed a few and had no idea why i was buying some stocks. When i was down i blamed them all when really i should of been blaming my self.
One of the best things i did was when i coped some major losses early on was just to sit back and study how my favorite heart ( @Fib ) was making all this great call's, and one other major thing that happened at lot was selling out to late or way to early.
Some of things i noticed are:
1. Most of Fib's call's were on what was trending in the general market... look for trends before or as they happen.
2. Get in early or not at all if there is no value left in it. 2. In order to know what you are going to buy/sell for, you need to know what is the potential value, value is not limited to how much money the company makes or cash they have. So many factors go in to getting a value like shares on issue, the team behind the co, the appeal or hype factor and so on. One of the easiest methods to find value is to find a comparable co. 3. Is be more organised, when i first started i was all of the place, now my watch list is all orgnised in the way it makes sense for me. I have my tech, gold, lithium, STT, DT and possibles all under different lists. End of day or if i get time during the day i just look to see what is moving and try to find a reason. 2012 i started trading, it was not till 2015 i could honestly say i am not a sheep anymore. I don't need to follow people, i just need to follow were the information is so i can make my own call.
Fomo can get you, i was reading a post of some guy who had bought RAP at almost the top, sold it to by PSF at the top.... all i could do was just shake my head... If we look at RAP, what was the deference between fundamentally at 15c and now 27c? Nothing... It still hand the same potential so why did that person not buy earlier? Simple FOMO and sheep... Oh yea it's going up so it must be good...
Hold on... when things go up too quick, it will also go down just as so maybe i should wait.. . Now PSF, if all the other RTO's ran to an average of 100 mill MC in the bull run, what is the risk/ratio at 4.3 c = about 80 mill MC in a bear market? Very risky buy.
