Starting out in trading as a newbie

[Zorwarrior]

Morning all, I have been a longtime investor in business & property with acceptable levels of success. I have dabbled in shares previously and done rather miserably. I am now at a point where I want to explore other home-based residual income options. In talking to some friends this weekend, share trading came up as one option.

What would your advice be for a newbie starting in share trading? Which platform to use, where to trade (NZ, AU, US) abd how to put some training wheels on to see if this is something I could learn?

Thanks in advance

[bohemian]

Good luck trading you'll need it. You will find that the gurus on here are share investors. Learn from them.

[JeremyALD]

ASB securities is a good place, but probably not a bad idea to speak to a financial advisor.

Personally I think the best way is to start off small. Either buy a few shares with a low investment and track them to see how they are going, whilst following them and the wider share market, or create a virtual portfolio and follow that. Look at Share Trader on threads because there's lots of good info here. Ignore hotcopper until you can learn whose ramping / shorting etc, there's a lot more crap on there but some good comments too.

If you don't want to have an active portfolio yourself there are plenty of good fund managers to look at.

[LAC]

Hi and welcome Zorwarrior,
Can you give us a little info on what you mean by "trading" and what are your main objectives. Residual income in the form of dividends? or residual income for buying and selling shares everyday?

[777]

If you are going to trade /invest offshore then get yourself up to speed with taxation requirements.

Also look at ANZ securities for NZ trading. They are cheaper.

[minimoke]

I'd see trading the NZX as high risk. Relatively low liquidity means you may not be able to enter / exit when you want. Then there is the relatively high broker fees - even $30 a trade for online. Then knock off 33% tax on gains. Margin for risk isn't there in my eyes.

If you trade AU or USA you then have to manage exchange rates which adds another risk / complexity.

I'm sure people make money trading. But I suspect you will hear more about the wins rather than the losses.

Disc: I couldn't trade out of a top even if it smacked me in the face.

[Vagabond47]

Once you figure out trading analysis and strategies, you could try them out and see how they work for you at https://virtualtrading.nzx.com/, then remember to factor in brokerage and taxes and see if they are going to work for you.

Also:

https://www.asx.com.au/education/sharemarket-game.htm

Just remember to treat it as you would real money and you get a risk free (and gain free) practice run.

[bull....]

Once you figure out trading analysis and strategies, you could try them out and see how they work for you at https://virtualtrading.nzx.com/, then remember to factor in brokerage and taxes and see if they are going to work for you.

Also:

https://www.asx.com.au/education/sharemarket-game.htm

Just remember to treat it as you would real money and you get a risk free (and gain free) practice run.


totally agree good places to try out stuff , remember though when you put real money on the line it is totally different to paper trading also you dont need to win every time to make money ,

cut losses let profits run
be a stone cold fish when trading
stick to your plan

plenty more, as well as plenty books written on the topic

nz market not very good for trading no liquidity, brokerage costs high
asx much better in this respect

[JBmurc]

Well for one you need to look at the ASX or bigger markets >> NZX is really an investor only market IMHO

disc-Been Trading the ASX market for last 12yrs

thread I started on here

https://www.sharetrader.co.nz/showthread.php?10995-quot-SHARE-TRADING-quot-strategies-thoughts-ideas-why-I-love-to-pay-TAX

[RTM]

I was where you perhaps are a few years ago.
Firstly...make sure you are clear on what you want to do ?
Are you going to try to be a trader and make (lose?) money from buying and selling shares ?
Or do you want to be more of an investor who buys shares and holds relying on the dividends for income ? And of course enjoying any capital gains and losses along the way. There is a big difference in the mind-set involved.

I went along to a couple of the major investment houses and discussed what I was trying to do with them. They both provided a couple of sample portfolios for my funds. After reviewing their fees, I decided to go it alone and slowly started to purchase stocks and a few bonds myself.

The advice I saw above of starting small and then tracking progress and adding stocks over time is good.
Like any money making venture....it takes quite a bit of time to manage and keep up to date with everything.
(There are no free lunches..or...the harder I work, the luckier I get)

[Brain]

You are a property investor and business investor so you must have the smarts to Navigate company accounts. Investing in businesses must also mean that you can spot a good prospect so sharemarket investment should be a natural fit for you. Trading though is a totally different issue.
Trying to time market entries and exits reliably is nigh on impossible unless you are lucky.
There are a number of very Knowledgable posters on here that are investors with a long term view. I do not see many trading decisions solely based on squiggly lines and I think that such behaviour would end in tears.

[BeeBop]

I suggest you try trading off-shore using an off-shore account. NZ is too small for full on trading. I live off-shore and know a couple of people that trade (I don’t as I seem to use too much emotion as I select the company rather than the number) these people are doing the Canadian market and the UK market. I do have to admit that I did a small amount of short-term trading following suggestions from Cramer on CNBC during 2011 through 2013 this was on the US market and I did very well (who didn’t though as the economies started to recover: see charts on PFE, MMM etc). There would also be some excellent trading in the US at the moment due to the volatility.

[Zorwarrior]

Thanks all for the advice and comments. My aim was to see if I can make some income out of trading to supplement my other income streams. I do have a small buy/hold share portfolio which will be treated separately. I completely understand that NZ is not the place for trading as there is not enough volatility.

I was thinking of starting in the AU markets as training, then perhaps graduate to US and UK markets. I dont really know how difficult it is to make money from trading but I thought it would be worth a try. I am only looking to do small trades to generate basic income (maybe $20-30k). Of course if I can make more great but I am not trying to be the Wolf of Auckland.

[minimoke]

I dont really know how difficult it is to make money from trading but I thought it would be worth a try. I am only looking to do small trades to generate basic income (maybe $20-30k). Of course if I can make more great but I am not trying to be the Wolf of Auckland.
If it was easy every one would be doing it.

[nzspeak]

The most highly paid investment managers in the world (hedgefund managers) can't beat the market trading- so why do you think you can? Zorwarrior ask yourself 'why would I be an investment genuis? what's my edge?' if you cant think of an edge- maybe you're in the wrong game.
"I dont really know how difficult it is to make money from trading but I thought it would be worth a try" Look up index funds vs active investing. It will tell you how hard trading is.

[JBmurc]

Thanks all for the advice and comments. My aim was to see if I can make some income out of trading to supplement my other income streams. I do have a small buy/hold share portfolio which will be treated separately. I completely understand that NZ is not the place for trading as there is not enough volatility.

I was thinking of starting in the AU markets as training, then perhaps graduate to US and UK markets. I dont really know how difficult it is to make money from trading but I thought it would be worth a try. I am only looking to do small trades to generate basic income (maybe $20-30k). Of course if I can make more great but I am not trying to be the Wolf of Auckland.

Yes can be done ...don't listen to the negative comments ...there is many successive traders both in Property and shares of course just like any business many fail and have the add rough year but that doesn't mean one cannot succeed and make a profitable income more years than not...it's like anything the harder you work the better your luck .... just go checkout my last 3x ASX comp results ... 5 picks at the start of the year all companies I have traded over the last 3yrs

[Baa_Baa]

Using the word 'income' in a question of whether one should embark on a 'trading' adventure is a bit contradictory.

I think you might mean "what companies should I invest in that will earn me an income over time", rather than the pure trader question which might be "which companies should I take a long or short position on and exit when it turns so I can make a profit on my trade".

They are quite different circumstances and require different strategies and skills. The outcome is the same though, as if successful they both make money.

Which is it?

[Yoda]

I am trying to do what you want to do . for the last 15 yrs . I have made 14.8 % pa acc to Sharesight pre tax, where I keep my records. Last year 40% that made up for some really bad years . Like others that have commented , trying to sell at the top of a run is hardly possible. If I had invested in Tourism alone , or ATM or basically anything, I would have been far... far better off now.
Look at some of the companies , say 5 yrs ago, and then look at the % rise they have made.
Pretty much most of the big favourites would have made far more than 10%.

But if you are doing it for the buzz or needing cash out each month ...... then you cant invest
If you still have a mortgage ('death-grip'), than you have to pay that 5% back off the winnings too.


if I had my time over, would I trade?
No

[couta1]

At the end of the day, do what you enjoy most according to your personality type and available time, as the saying goes investing is like a flat white whilst trading is a double exspresso. PS-Im not a coffee drinker.

[RGR367]

No guts, no glory so just do it! After all, whether you trade or invest, you'll definitely pay your "tuition fees" learning about the Market. And it's better that you find that out yourself. GL.

[kiora]

No guts, no glory so just do it! After all, whether you trade or invest, you'll definitely pay your "tuition fees" learning about the Market. And it's better that you find that out yourself. GL.

Concur with you here RGR.If one wants to earn more than joblow then one needs to do something that joblow doesn't do.Take the plunge,in for a punt,don't be disheartened by any losses along the way,just analyse,learn & move on.

[percy]

Take time buying any asset,whether property or shares.
The big money is made when purchasing.
Retain your winners,sell your losers.