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Aaron
10-06-2010, 12:26 PM
Are there many people on ST who trade either shares, foreign exchange or commodities as a full time occupation.
What is required to trade fulltime. Is anyone capable of doing it.
Do you have any advice for someone wanting to dip their toes in and try it on a part time basis.
Are there any simple systems. What are the costs and time involved in trading. What programs/tools are required. What training,books,courses would you advise for a newbie.
I haven't really considered TA as a lot of people in books write it off but I was impressed by how Phadreaus's charts provide signals for buying and selling and wondered if it would be possible to generate some extra income part time.
Also my take the advice of stockbrokers and hold long term has been a drain on capital over the last few years.

peat
10-06-2010, 01:11 PM
you have to be a really good trader to be able to reliably generate positive returns so as to be able to live of that and that alone. The accepted figure is that 95% of traders lose money
So you have to prove your mettle before you commit to it, and how you want to stick your toe in the water is up to you. But the general advice is dont give up your day job till you've been reliably profitable for at least six months and probably more.
Re the systems thing, plenty of people will try and sell you one but imo its unlikely they're as good as they make out - if someoone had a great system why would they try and sell it off and not just use it and get rich. Often they will say they want to help others well you can believe that if you want but if that was true they seem to go to a lot of trouble with hard sell marketing and charging high prices etc.
In contradiction of what I just said though there is one person I know personally who trades full time and has made a good living for a long time from it. He used to post on this site but doesnt anymore as he too is now selling forex tips. I dont subscribe but if I wanted to trade full time I probably would.
I suspect you probably need to be TA centric to make enough to live off though Warren Buffet may disagree with me heheh
Dont think it will be easy money.

Aaron
11-06-2010, 09:13 AM
I appreciate the advice.
Also I wonder who uses MetaStocks software.
Does anyone have any recommendations as to software to use for charting as this seems to be at the heart of TA analysis. Using charts to gauge where the market might be headed.

wbosher
11-06-2010, 11:00 AM
I appreciate the advice.
Also I wonder who uses MetaStocks software.
Does anyone have any recommendations as to software to use for charting as this seems to be at the heart of TA analysis. Using charts to gauge where the market might be headed.

Check these out:

http://www.sharetrader.co.nz/showthread.php?7145-Charting-software-for-nzx
http://www.sharetrader.co.nz/showthread.php?7277-has-anyone-uses-those-charting-softwares
http://www.sharetrader.co.nz/showthread.php?7758-Incredible-Charts

There will be plenty of other post about this, but these are a start. :)

Phaedrus
11-06-2010, 01:26 PM
I use MetaStock as well as other charting software. Don't focus overly on which software you use - they all do essentially the same thing. To start with, I would strongly advise you to buy nothing at all. A subscription to IncredibleCharts will only cost you about $17/month and for the majority of people, this is all they would ever need.

Phaedrus
11-06-2010, 01:28 PM
The following is a possible agenda for anyone wanting to learn about Technical Analysis. It is not suggested that you need to do everything here in order to use TA effectively. Take it as far as you wish.

What is Technical Analysis, and why use it? http://www.ataa.com.au/what-is-technical-analysis-and-why-use-it.html

An Introduction to basic Technical Analysis :- http://wol.sharenet.co.za/free/library/technica.htm?scheme=wol

The book "Technical Analysis from A to Z" by Steven Achelis has a good introductory overview, followed by information on most of the commonly used indicators. It can be accessed at :- http://www.equis.com

Examine some charts on-line, practice drawing trendlines, see if you can recognise support and resistance levels. Try some of the technical indicators available. Look at Bar charts, Line charts and Japanese Candlesticks. There are many charting sites available, such as Yahoo Finance, Big Charts, FT Charts, Paritech and many others. For many people, such free charting facilities are all they will ever require.

Incrediblecharts is free, though you have to register to use it. It has good charts, but the best feature is the large educational section. This is one of the best online tutorials I have seen. It covers all the basics - stops, patterns, psychology, indicators, candlesticks, buy signals, sell signals, trends, trailingstops, P&F charts, systems, strategies etc etc. The charts are quite good and there are over 50 indicators available. You can draw trendlines and annotate charts.

Buy "Technical Analysis of the Financial Markets" by John Murphy. ISBN 0-7352-0066-1 $140. This 540 page book covers most of the major facets of technical analysis, making it a good introductory text. This is one of the three books required for the American Chartered Market Technician Program.(The other two are "Technical Analysis of Stock Trends" by Edwards and Magee, and
"Technical Analysis Explained" by Martin Pring.)

There are now such good charting facilities available free on the net, that it is no longer necessary to buy your own software in order to use TA effectively. If you do want your own software, there are hundreds of programs available, ranging in price from free to well over $10,000. It is possible to spend an inordinate amount of time trying to find something reasonably acceptable for little or no outlay. If you can afford it, go straight to buying a well-known program of good quality such as :-

MetaStock http://www.infoscan.co.nz
Supercharts http://www.infoscan.co.nz/
Ezy Chart Pro http://www.paritech.com.au/
Insight Trader http://www.insighttrading.com.au/

This is not a comprehensive list. My personal preference is for MetaStock, but there are other good programs available. In New Zealand, more people use MetaStock than all the others put together.

For a listing of well over 400 Technical Analysis software programs, with details of each, go to :-
http://technical.traders.com/Products/catsearch.asp?cat=120 This site includes a search engine, which enables you to enter the features you require, then gives a listing of software programs meeting those criteria.

You will need a supply of compatible data, and some price history. (2 years minimum. 5-10 years would be better) Package deals are available. Shop around though - prices can vary considerably.

Join STANZ (Society of Technical Analysts of NZ) http://www.stanz.co.nz They hold monthly meetings, see their website for details. You do not have to be a member to attend.

Join ATAA (Australian Technical Analysts Association) They have monthly meetings (in Australia) and publish a very good bi-monthly journal containing articles on technical analysis and trading. http://www.ataa.com.au/

Information on further study at http://www.ataa.com.au/formal-education-in-technical-analysis.html

The Chartered Market Technician (CMT) Program is an educational process in which candidates study a broad range of technical analysis subjects. Administered by the Accreditation Committee of the American Market Technicians Association (MTA), the Program consists of three levels which must be completed within 5 years. Further information :- http://www.mta.org Britain has some more complex courses with degree examinations and Universities in USA, Europe and Sweden also provide for a degree in Technical Analysis.

Aaron
13-06-2010, 09:40 AM
Thanks Phaedrus
If I can't get some grasp of TA and come up with some sort of plan to try and make money from it from here it may never happen. I imagine that I will try and combine this with an understanding of FA and come up with some ideas.
Will do some study and hope to post ideas for critical assessment or ridicule in the future.

Aaron
13-06-2010, 10:12 AM
Thanks Phaedrus
If I can't get some grasp of TA and come up with some sort of plan to try and make money from it from here it may never happen. I imagine that I will try and combine this with an understanding of FA and come up with some ideas.
Will do some study and hope to post ideas for critical assessment or ridicule in the future.

Also I meant to say thanks to everyone else for their advice. Have looked at the threads you recommended wbosher

Aaron
23-06-2010, 12:53 PM
One further question regarding charting. I use ASB Securities online trading. The charts they provide include moving averages, candlesticks, Relative Strength Indicators, Stochastic Oscillators and a few other things. I am waiting on the delivery of the John Murphy book Phaedrus recommended to better understand how these are calculated and what they mean.
Due to commissions sizes I would initially only be looking at the NZX and ASX anyway.
Would incredible charts add much to what I can already access with ASB Securities as most of the indicators are there.

Phaedrus
23-06-2010, 01:37 PM
Sign up for free IncredibleCharts and see for yourself. I think you will find them well worth the expense!

whirly
23-06-2010, 08:28 PM
Yep Incredible Charts is incredible value. Once installed you can click on any of the indicators and it takes you to the IC glossary which explains what each indicator does. It also has a really good set of filters with it. The data is something like 16 hours old on the free version. That just means you need to do your charting in the morning before the markets open. It would be nice to have up to minute data but not necessary in my opinion.

Aaron
29-06-2010, 09:38 AM
I have been having a bit of a play on incredible charts, started reading the John Murphy TA book. Also started reading the Intelligent Investor which is widely recommended (although was surprised at the lack of interest in Lizard's Net-net bets thread as this is one of Ben Graham's recommendation for the enterprising investor.)
All this time and effort gets me back to my original question on this thread. Is anyone other than Phaedrus a full time investor/speculator and actually making a living out of share trading or does the 95% failure rate for share traders hold true. Can I assume that most people are just playing with money they can afford to lose and the wins are treated as pocket money. If my odds are only 5% for success I would need to question putting any time and effort into it unless I enjoyed taking a punt with some play money.

Phaedrus
29-06-2010, 09:54 AM
Aaron, very high failure rates are generally quoted for forex traders and day traders. There is no reason at all why you shouldn't be able to equal index returns - though even this is not as easy as you would think. It is commonly stated that 85% of fund managers fail to beat the index, for example. I routinely out-perform the index, but was unable to make to make consistent profits from daytrading.

Corporate
29-06-2010, 07:41 PM
Is there anyway you can get NZX listed data on incredible charts?

Corporate
29-06-2010, 08:10 PM
Yes ---- Under Securities----> Load by Symbol from Yahoo----> Select New Zealand Exchange and type code.

AA

Sweet thanks! you're on the money.

Aaron
02-07-2010, 07:50 AM
Thanks AA. I guess you could split day traders with people who trade over longer periods as well. Me personally I have yet to come up with an alternative plan to my buy and hold based on expert recommendation but when I make the time will look at Phaedrus's theory and maybe use TA to time buying shares as well as selling shares based on trends. I will also need to make more effort to understand individual companies and what their annual reports are saying.

trackers
02-07-2010, 10:03 AM
Good read AA.. I think you have to draw the line between day trading (scalping) and full-time trading/investing - In my mind, if you have enough capital there's no reason why you can't invest in the markets full-time.

I think to do this consistently you'd have to be able to trade the long and the short, and be prepared to hold equities for whatever length of time makes sense fundamentally and technically (rather than having to close each trade off at the end of the day as day traders do)... Of course the downside of this means you'd have irregular cashflow.