Newb trader seeks advice...

[Gonz]

Greetings all...

I didn't see anything in posting rules or FAQ about not making a "Hello" post, so..

Hello!

I am brand-spanking new at trading. This is not strictly true. I have yet, in fact, to make a single trade. I got turned on to this whole world by one of my former housemates, a former derivatives trader who makes his living doing this sort of thing, and on a few occasions I sat with him to watch Mad Money strictly for entertainment value.

I am a graduate student in French and Francophone literature. I love what I do, and I intend to keep on doing it, but it occurred to me a few months ago that I am sick and bloody tired of being poor. (I'm not trying to make a cool million by next Friday, but it would be nice to be able to, say, afford Christmas presents for my family.)

I started doing some research (that, at least, is something I'm good at), read a few books, familiarized myself with the jargon, learned how to read the charts, and started making a few hypothetical trades on paper to see how I might fare were I playing with real money. I'm pleased with my results, but then again, one tends to worry considerably less about dying a gruesome, bloody death in a video game.

So I'm ready now. I'm starting with a principal of about 10k. Any advice that anyone might have about anything is welcome here. Things you swear by. Things that have never, or almost never, let you down. What indicators you prefer, what fundamental indices draw your attention, whatever. I like penny stocks, because us po' folk have to stick together (and I did make a hypothetical killing when SPHD shot up 78% on Friday), but any and all advice about anything is welcome.

And if there are any other newbs here with dumb questions, feel free to post them here.

Many thanks..

[Shock-56]

Hi GONZ:
Amen on the XMAS presents, it would be nice to have a link to Check Stock Ticker symbols no......

or better yet an added subroutine to the main program that goes to the link, I'll have to ask the Administrator...

You made the right move comming to a place like this, Birds of a feather etc etc..
Later.

[Gonz]

Thanks for the welcome...and as for 'birds of a feather', yeah, I'm just trying to do everything in my power to keep from getting burned. I've been having fun thus far just crunching the numbers, but it's time to get to work. Thing is, I know myself well enough to know that if I take a big hit early, I'll be out of this gig for good, and I'd rather avoid that.

Thanks for the encouragement..

[Code Butcher]

You know it's easy to say "I've got 10 large and I want to play the stock market." In reality you need to think "What do I want to do with this money?" Is it "Mad Money", like gambling money? Is it for my future?

For Mad Money, your almost better off going to Vegas, at least you'll enjoy it at the same time. 10 large is not that much but it's a start.

You have to also consider tax and commission consequences. If you don't plan on doing this to supliment your income, your better off putting it in a ROTH IRA. That way it does not get taxed until you take it out in 5 years or more.

I've been playing with Mutual Funds eversince I got a 401K. I've seen all my profits go down the drain. Learn how the game is played first b4 joining. If not you will quickly loose that 10 large.

Research is the fundimental of trading. Don't always rely on the stuff you hear from other people, in the end you make the final decision.

Good Luck!

Carpe diem, quam minimum credula postero - Seize the day, trust as little as possible in tomorrow. (Horace)

[deepinwonder]

You did not mention if you read Cramer's book on investing.

[Gonz]

I didn't. I read (thoroughly) Trading for Dummies, The Coffehouse Investor, Trading for a Living, and a host of other various reports (mostly internet stuff).

[deepinwonder]

Cramer's is totally different. You can find his rules for investing on thestreet.com, too. I cannot tell you how helpful they were to me, compared to everything else I read.

[optimus25]

If you want to play this game then you really have to look at your current financial situation. 10K is too much for Mad Money. Judging from you first post, you're at a pretty low tax bracket. A Roth IRA will allow you to invest your money tax free. $4K 2005 & $4K 2006. You can access your principal anytime since your contributions are post tax. Any earnings you have in the account can be accessed (up to $10K) after your account has been opened for 5 years for first time home purchases.

Its a great account so take advantage of it if you can.

[optimus25]

Investing is a great thing. You'll find that many people on this site are speculators, nothing wrong with being a speculator, most people know how to make money that way. But if you want to be able to stay in the game you're going to need to figure out how much risk you are willing to take and how much losses you can stand. Risk vs return is the name of the game.

I love investing and advising people, I hate seeing people trade and getting burned and then turn away from investing because of their bad experience. If that is going to happen to you...don't do it. Investing is a lifetime process. You'll always have madmoney to invest once you get a solid foundation.

Invest in a 401k/403b if your company offers one. Then do a Roth IRA. Then start playing with madmoney. Good luck.

[Luc1Grunt]

Well put Optimus!

[Code Butcher]

I 2nd that!

Talk is cheap! Investing takes time and effort!

[Gonz]

Well, I've got money in my war chest now.

I appreciate all the (sound) general advice, and intend to follow it. (I'm not a gambling man.) In fact, stapled to the front of my trading folder (which is pretty thin at the moment) is a piece of paper with the following list:

> Don't panic.

> Don't be greedy.

> A missed opportunity is not a loss.

> Predicting stock prices is like predicting the wind. You may know where the storm is coming from, but you'll never be able to calculate the number and intensity of the gusts.

> Be bloody, bold, and resolute.

> Don't be emotional, but don't invest in anything at odds with your principles.

> Don't be afraid to cut your losses, and don't ever regret it when you do.

> Take the money and run.

I guess I'm a little more interested in the nuts-and-bolts. Just from looking at a lot of charts, I've found (and feel free to correct me if you think I'm wrong) that the MACD, the stochastic oscillators, and the EMA are usually consistently accurate indices. (I also look at price movements and volume, obviously.) If you happen to use any others you trust, please tell me what they are (and how they work).

I'm not too clear on fundamental analysis. What numbers do you look at? What are your buy signs, what are your sell signs?

Oh, and I watched the show tonight, and I have a fairly specific question: What is the price-to-earnings ratio? What would be considered a "solid" or a weak PE?

[Shock-56]

Their is 11 letters on this page that can make a stock go Up or Down, can anyone tell me what they are?
Cheers.

[Gonz]

11:54 p.m. and I just made my first orders. Won't tell you what they are yet, but I'll let you know how I do.

Honestly, all I'm concerned about at the moment is covering any slippage. Put my pinkie toe in the water.

Patience, patience.

[ki klempa]

I hear you, first) I also started w/ 10 k and this is what I did, first off I read: trading for dummies, and a day trader book, even though I'm not a day trader this book gives you all the lingo.... also I finished w/ cramers book...

2) If you need a copy you are welcome to mine, just pay postage to get it to you and then ship it back to me when your done.... I learned alot from him


3) Do not buy all at once, start w/ 1000.00, then make trades once a week or once per month... your first lose is the hardest but after reading all the books i'm sure you know what to do when your stocks fall below your stop limit, get out if they go below your stop limit and MOVE on.... believe me it's hard to do but I took a 200.00 loss on a credit card and moved to solid companies and my 200.00 loss doesn't even matter., I wish you luck

let me know about the cramer book I'm all done w/ it

Kim (kimklempa@iwon.com)

[Gonz]

Thanks very much, ki, methinks I'll take you up on that. (I'll send you an e-mail, just thought you deserved more public thanks..)

As it happens, the 10k (which is an estimate) that I'll be starting with is in the form of...stock. XOM stock that I inherited about, oh, twenty years or so ago. The certificates have been sitting in a drawer at my parents' house since then. As this strikes me as a particularly bad time to liquidate oil stocks, for the moment I'm starting even smaller than you did, monkeying around with $600 cash that I could afford to put into play, testing my system with some real-live risks.

And thanks for the encouragement, by the bye..

[BruceJames]

But what does one put in the Roth?
A Mutual Fund, European, ETC.
? Thanks

[BruceJames]

New Here
ROTH is good.
But what do I put into a Roth.
A mutual fund, European, Large Cap, etc.
Enjoy the posts and hope I can find my way back here.
Thanks
BN

[tekbubble]

First, Read Cramer's Mad Money.
Second, (at the same time as first), look up all the basic terms on wikipedia or somewhere (rothIRA vs. traditional, stocks, bonds, mutual funds, price-to-earnings, stop, limit, options, etc...
Third, open two accounts at FolioFn.com: 1 RothIRA account, 1 Regular account. Put $4000 in the RothIRA account. Create a folio and buy into either a mutual fund or a ready-to-go folio. Put the rest into your regular account and either buy a ready-to-go folio, subscribe to ActionAlerts @ thestreet.com and copy Cramer's portfolio and trade with him, or create your own folio and experiment.

I got the silver plan at FolioFn so I can have 300 free trades every month, you could probably make do with less.

Be very, very careful when you first start. Don't jump into any stock on your own until you read Cramer's book.

Have fun!

[Luc1Grunt]

I disagree on the Vegas analogy posted above unless your trading style is based on tips and prayers. In Vegas, the house keeps the advantage 100% of the time. You can stack the deck in trading. 60% wins can be done consistently. You have the advantage if you "work" at it.

Manage your money! Preserve your capital.

I'm talking trading vs. investing, but even in "investing", buy/sell signals and market timing will have a great effect on your gains/losses. :lol:

[sportsmadness80]

Thanks for the welcome...and as for 'birds of a feather', yeah, I'm just trying to do everything in my power to keep from getting burned. I've been having fun thus far just crunching the numbers, but it's time to get to work. Thing is, I know myself well enough to know that if I take a big hit early, I'll be out of this gig for good, and I'd rather avoid that.

Thanks for the encouragement..

With all that money dont get burned by pump up penny stocks. Check out Walmarts expansion in Mexico. http://www.walmartmexico.com.mx/ Walmart may dominate Mexico like in the U.S. This stock has many splits to come. $$$$$$ :D