Dabbling in stocks and shares trading

[billythewiz]

If you have a look historically at the overnights future market (this is the outside market hours for the exchange) for the FTSE, it hit well above 5100 last night ... What happened at 6/7am this morning, (market opens at 8am for LSE) Plungie plunge plunge.... well below 4950. Only to rise up again to 5090 at the time of this post, trending as if it will hit 5100 ...

TAs advice is fine but be aware of one thing. He mentions 6/7/8am and posts at 10am. Today the FTSE100 opened at 4980, peaked at 5150, dropped to 5040 and then recovered to 5090 at the close.

At 10p a point there was the potential to make (or lose) £17 with a single bet, or £28 with two bets or even £33 with three. But trading is easy with hindsight, and it's impossible to day trade like that unless you have the kind of job/lifestyle that allows you to constantly watch the market. How easy would it have been to have bought in at 9:30 (it looks like it's recovering), been grinning at 12:30 (an 80 point rise), gone to lunch, been called into a meeting while eating, not get out until 3, go to the toilet, grab a coffee, return to your desk and find your stop loss has just dumped you out for a 20pt loss. OK, not that easy, but you get the point.


For those that are interested in longer term investments (e.g. ISAs and/ SIPPs for mortgage re-payment / old age) then there are discount brokers (I use and recommend Hargreaves Lansdown) who rebate some or all of the initial charge levied by the funds. This saves me 5% of the £20k (mine + wife's ISA allowance) each year.

[TheAnimus]

Kind of the point I'm making. Its volatile, you can loose money easily.

It doesn't matter if you buy £500 for 3 months on the FTSE or go 10p a point on a Dec-11 future. They will simulate the same. Its just on a spread betting site you will see more how swinging they are!

All I was trying to is demonstrate that the market is moving a fair few percentage points, during the day.

[mcmiller]

http://www.zerohedge.com/news/bbc-sp...an-rules-world

[petercook7]

This is a good example, and thanks for sharing!



I would say here the usual petercook7 advice rule kicks in, ignore him, assume it to be the opposite of what he is saying.

How can you say that, iam sorry but with spread betting you can't offset ctg on any other assets, spread betting isnt for someone new, spread betting, if you dont understand leverage could be dangerous.
Shares these days is easy money, and if you hold onto them its even better.

[petercook7]

TAs advice is fine but be aware of one thing. He mentions 6/7/8am and posts at 10am. Today the FTSE100 opened at 4980, peaked at 5150, dropped to 5040 and then recovered to 5090 at the close.

At 10p a point there was the potential to make (or lose) £17 with a single bet, or £28 with two bets or even £33 with three. But trading is easy with hindsight, and it's impossible to day trade like that unless you have the kind of job/lifestyle that allows you to constantly watch the market. How easy would it have been to have bought in at 9:30 (it looks like it's recovering), been grinning at 12:30 (an 80 point rise), gone to lunch, been called into a meeting while eating, not get out until 3, go to the toilet, grab a coffee, return to your desk and find your stop loss has just dumped you out for a 20pt loss. OK, not that easy, but you get the point.


For those that are interested in longer term investments (e.g. ISAs and/ SIPPs for mortgage re-payment / old age) then there are discount brokers (I use and recommend Hargreaves Lansdown) who rebate some or all of the initial charge levied by the funds. This saves me 5% of the £20k (mine + wife's ISA allowance) each year.

People think its simple spread betting, but it takes steal balls to cope with it, shares on the other hand you can wait it out.

[b0redom]

Shares these days is easy money, and if you hold onto them its even better.

Unless you happened to have stock in Lehman's, Bradford and Bingley, Northern Rock........ If you make a profit, all credit to you. Just don't be surprised if, with an attitude like that, you come unstuck.

[petercook7]

Unless you happened to have stock in Lehman's, Bradford and Bingley, Northern Rock........ If you make a profit, all credit to you. Just don't be surprised if, with an attitude like that, you come unstuck.

I'm preparing for a downward market, Lehman's Bradford NR, were special cases, we'll we see more of those special cases, yes, when i'd say the 1st sign would be early may 2012.
At the moment i'm riding the ups and down with the stock market, preparing to go into CFDs and gold when i think the market will collapse.

[TheAnimus]

How can you say that, iam sorry but with spread betting you can't offset ctg on any other assets, spread betting isnt for someone new, spread betting, if you dont understand leverage could be dangerous.
Shares these days is easy money, and if you hold onto them its even better.

Notice I'm saying there is no such thing as the easy money, because anyone who has any understanding of these things will tell you there can not be. There is always a risk attached. Now your saying that spread betting is bad because you can't net off your losses against CGT..... But you then say you'd make no losses, because its easy money in shares....

I don't need to go on about this, I've said before lots of times you don't need to be leveraged, you can simulate very cheaply share ownership. We've discussed the cons of no divs, the rolling fees...

People think its simple spread betting, but it takes steal balls to cope with it, shares on the other hand you can wait it out.

One reason why you can't wait it out with spread betting? Only one I can think of is you can't afford to have the required money in place, erm oh its the same downside......

I'm preparing for a downward market, Lehman's Bradford NR, were special cases, we'll we see more of those special cases, yes, when i'd say the 1st sign would be early may 2012.
At the moment i'm riding the ups and down with the stock market, preparing to go into CFDs and gold when i think the market will collapse.

Oh dear god.

Anyone reading this. I'm no expert, I do make a fair part of my income from investments and such, but I'm just a student in the game. I have had the advantage of sitting opposite two people, one of whom is comfortably on the times 100 rich list as a self made man. I've learnt a little bit. But the best lesson I can tell you is no good trader ever suggests there is easy free money.

Anyone suggesting there is easy free money is either a moron, or out to con you. Always remember that.

[petercook7]

Notice I'm saying there is no such thing as the easy money, because anyone who has any understanding of these things will tell you there can not be. There is always a risk attached. Now your saying that spread betting is bad because you can't net off your losses against CGT..... But you then say you'd make no losses, because its easy money in shares....

I don't need to go on about this, I've said before lots of times you don't need to be leveraged, you can simulate very cheaply share ownership. We've discussed the cons of no divs, the rolling fees...One reason why you can't wait it out with spread betting? Only one I can think of is you can't afford to have the required money in place, erm oh its the same downside......Oh dear god.

Anyone reading this. I'm no expert, I do make a fair part of my income from investments and such, but I'm just a student in the game. I have had the advantage of sitting opposite two people, one of whom is comfortably on the times 100 rich list as a self made man. I've learnt a little bit. But the best lesson I can tell you is no good trader ever suggests there is easy free money.

Anyone suggesting there is easy free money is either a moron, or out to con you. Always remember that.

If you hold shares long term you make money, if the markets are like now you make money, what makes you lose money is greed.

[b0redom]

@petercook7

Netscape Communications (I worked for these guys and got options - at one point they were approaching the same market cap as IBM. By the time I left, my options were worth just enough to buy a Mars bar.)
Enron
Sun Microsystems (My mates have options so far underwater that they come with a free submarine)
Yahoo

There are hundreds of these 'special cases'.

Anyway, I've had enough of arguing.

You clearly believe you're the next Warren Buffet, so I look forward to reading about you in The Times Rich List.

[TheAnimus]

If you hold shares long term you make money, if the markets are like now you make money, what makes you lose money is greed.

*sigh*.

Seriously anyone who believes this **** you deserve to loose your money.

If all shares made money, then everyone would buy them now, and they wouldn't have any future earning to provide you, because everyone would have bought them already............

This is some truely awful advice, do not think that blindly buying shares will earn you money if you hold on to them.

I still stand by my previous statement of anyone offering you free money is a moron or out to con you. I really don't think your out to personally gain from conning anyone here, so that means?

[Bugbait]

Notice I'm saying there is no such thing as the easy money, because anyone who has any understanding of these things will tell you there can not be. There is always a risk attached.

...

Anyone suggesting there is easy free money is either a moron, or out to con you. Always remember that.

Fully agree. I know enough to acknowlegde that I don't have the knowledge, experience, or commitment to trade equities, atleast in a fashion that makes it worthwhile. I'm also very lazy so my father does it for me since he lumps it in with whatever he's doing. I trust him and know that it's too much work for me to bother with at the moment.

My father started trading shares in his retirement to occupy his mind (was arguably a bit of a workaholic before retirement). He was a Engineer and didn't know much about the stock market so paid several thousand to take some courses and continued by buying some proper software to link into brokers. He makes a tidy return (well into the 6 figures region after tax) each year BUT he approaches it almost like a full time job. Being a lifetime early riser he wakes before the markets open to conduct some pre-analysis and then follows it throughout the day at various intervals and is generally around at market close, with some post close analysis before he stops for the night. He'll be the first to admit it's not a guarantee and hardly "free" money since he commits some to many hours each weekday towards it. It is WORK for most if not all people that make a decent and consistent return. He once got greedy/complacent and ignored the indicators and lost 4 months of profit in a few days. He made it back but with a lot of hard work but more importantly, learned from it.

Golden rule: Never invest more than you are comfortable and can afford to loose.

There is no such thing as an equity that is guaranteed to make money in the short, medium or long term atleast in the true sense of the word. When you're actively trading and not just sitting on blue chip stock for years on end you have to factor in opportunity cost. Sure, the £10k of blue chip stock might be holding its value or steadily increasing but a "trader" would prefer to use that £10k elsewhere for possibly higher returns.

Is it worth it? Sure, if you enjoy doing it or have lots of spare time. Just don't realistically expect to make consistent profit without investing a fair chunk of time and effort on it.

[oolon]

One other thing to bare in mind about spreadbetting, is you get charge "interest" on the value of the share you are buying. Personally, I have lost money spreadbetting, and when it comes to investing a good thing to remember is you don't have to be good at everything, do the things that make you money and don't worry about what you can't do. You still get Dividends though (short people pay them but get interest with some services), so if you pick the right firms you can use spreading long time and use the dividends to cover the costs. However shares do fall when they go X-Dividend.

Personally I have a self select ISA (with iii), ok there is a 10 pound fee (+ .5% stamp duty on buys) however you can keep holding things forevever without fees (in this service). Also do not forget a 10 buy fee also requires a 10 pounds sell fee. This is also tax free and you can pay in over 10k a year (not that I have that much spare capital).

Return on a 10% rise
250-(10+1.250) = 238.75*1.1 = 262.625 - 10 - 250 = 2.625 (not much of a profit there) 1%
### 250-(2+1.250)= 246.870*1.1*.1 = 271.56 -2-250 = 19.56 (7.8%)
500-(10+2.50)= 487 *1.1 = 536.2 -10 -500 = 26.2 pound profit (5%)
1000-(10+5) = 985 *1.1 = 1083.5 -10 -1000 = 73.5 pounds profit (7.5%)
2000-(10+10) = 1980*1.1 = 2178.0 - 10 -2000 = 146 pounds profit (8%)
4000-(10+20) = 3970*1.1 = 4367 - 10 -4000 = 357 pounds profit (8.9%)

This is why I invest 1000-2000 pounds in one go, normally 2000 for an initial investment adding in units of 1000 pounds if I feel like it, as it allows me to name the price I want to trade at. With a small amount like 250 pounds your need to use a low fee service when they pick when to buy and sell, so you can pick the day but you will not get a good price (the always seem to work out how to get the worse deal on the day).

Personally I have reduced my exposer to the market about a 1.5 years ago and mostly just have the money I have made from previous gains.

IANAIFC, don't risk money you can't afford to lose or may need back in a hurry, it can however be great fun, and if your an optimist now could be a good time to start, I have bought some RIO tinto, in the big fall, having previously sold mine at £40+ and got back in at £31 (yes could have done better but its for the long term).

iii has great forums, Shareprice has real time streaming for free and ADVFN has the best portfolio management too.

This might look like I am a buy and hold person... I am not... A profit is a profit is a profit is not a loss its a profit... take them when available. A good why to think about if you sell is how many years dividends you can have NOW... and how long do you think you will have to wait to buy those shares (or something else as good) again... Other things you can do is, get your stake money back and keep the change in shares and let it ride (not so good with small ammounts).

For some (like TheAnimus) its a good way to make a living, for other like me its a fun hobby that pays for itself.

A bird in the hand is worth two in the bush particularly as someone else IS tring to set fire to your bush.

[petercook7]

One other thing to bare in mind about spreadbetting, is you get charge "interest" on the value of the share you are buying. Personally, I have lost money spreadbetting, and when it comes to investing a good thing to remember is you don't have to be good at everything, do the things that make you money and don't worry about what you can't do. You still get Dividends though (short people pay them but get interest with some services), so if you pick the right firms you can use spreading long time and use the dividends to cover the costs. However shares do fall when they go X-Dividend.

Personally I have a self select ISA (with iii), ok there is a 10 pound fee (+ .5% stamp duty on buys) however you can keep holding things forevever without fees (in this service). Also do not forget a 10 buy fee also requires a 10 pounds sell fee. This is also tax free and you can pay in over 10k a year (not that I have that much spare capital).

Return on a 10% rise
250-(10+1.250) = 238.75*1.1 = 262.625 - 10 - 250 = 2.625 (not much of a profit there) 1%
### 250-(2+1.250)= 246.870*1.1*.1 = 271.56 -2-250 = 19.56 (7.8%)
500-(10+2.50)= 487 *1.1 = 536.2 -10 -500 = 26.2 pound profit (5%)
1000-(10+5) = 985 *1.1 = 1083.5 -10 -1000 = 73.5 pounds profit (7.5%)
2000-(10+10) = 1980*1.1 = 2178.0 - 10 -2000 = 146 pounds profit (8%)
4000-(10+20) = 3970*1.1 = 4367 - 10 -4000 = 357 pounds profit (8.9%)

This is why I invest 1000-2000 pounds in one go, normally 2000 for an initial investment adding in units of 1000 pounds if I feel like it, as it allows me to name the price I want to trade at. With a small amount like 250 pounds your need to use a low fee service when they pick when to buy and sell, so you can pick the day but you will not get a good price (the always seem to work out how to get the worse deal on the day).

Personally I have reduced my exposer to the market about a 1.5 years ago and mostly just have the money I have made from previous gains.

IANAIFC, don't risk money you can't afford to lose or may need back in a hurry, it can however be great fun, and if your an optimist now could be a good time to start, I have bought some RIO tinto, in the big fall, having previously sold mine at £40+ and got back in at £31 (yes could have done better but its for the long term).

iii has great forums, Shareprice has real time streaming for free and ADVFN has the best portfolio management too.

This might look like I am a buy and hold person... I am not... A profit is a profit is a profit is not a loss its a profit... take them when available. A good why to think about if you sell is how many years dividends you can have NOW... and how long do you think you will have to wait to buy those shares (or something else as good) again... Other things you can do is, get your stake money back and keep the change in shares and let it ride (not so good with small ammounts).

For some (like TheAnimus) its a good way to make a living, for other like me its a fun hobby that pays for itself.

A bird in the hand is worth two in the bush particularly as someone else IS tring to set fire to your bush.

I've jumped in a few times barc 60p purchased 1000s sold for 2.90, barc 1.62p sold for 1.70p barc 1.44p same with lloyds and a few others i only sell when i make a profit.
The markets over the past 3 years dont mirror economic fundamentals, hence why spread betting isn't a good idea, and shares are.
TheAnimus when people like you sell shares I buy when people like you buy shares I sell.

[TheAnimus]

TheAnimus when people like you sell shares I buy when people like you buy shares I sell.

Yup, because I know nothing about this industry. I never get invites to social events with people who write cover articles for the FT, own some of europes largest funds and such, they never taught me anything whilst I worked for them. I've not ever run risk of multi-billions of dollars. As such I've never learnt how f**king sod all I know about the markets, and how there is no free lunch. Which is why you find me telling everyone only how well I do, and how its so easy, and everyone should do it because shares only rise in value.

Oh wait a minuite, all thats not true, as such I'm not a complete and utter @~~~@@@ @L:@@@ who will at the very best loose a gulible person their entire savings, whilst trying to look like you know something to the un-informed internets.

IMG removed by Zak.. not cos it wasn't funny.. it WAS.. but it was rooooood

Anyone else, don't listen to him, feel free not to listen to me either, i'm just a geek, but please, don't loose your money beliving his ****e

[Bugbait]

I've jumped in a few times barc 60p purchased 1000s sold for 2.90, barc 1.62p sold for 1.70p barc 1.44p same with lloyds and a few others i only sell when i make a profit.

I'm always very wary of those, and there are many that only talk about the profits they make on the stock market. They're either lying, not aware of the losses, or trade so infrequently and in such small amounts that it's statistically insignificant.

How many different instruments do you trade on average per year? What is the current net worth of your stock portfolio (percentage of invested capital is fine)? What is you average net profit from stock market transactions per year?

It's never, ever pure gains unless you're an extremely casual trader and many are put off, freaked out or simply can't absorb the losses in order to recover to gains again.