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lookingafterthekids

Ok, Ok. I Woke Up This Morning And Realised There May Just Be More To This World Than Property

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I think it may have been posted before but I have decided to have a small dabble in the markets and as an absolute beginner, I havent got a clue so want you people to teach me.

I believe you when you say that there is an awful lot of money to be made but how easy is it?

From a standing start at 16th January 2006, I want to start investing in "the markets"

I have a basic undersatanding of the basics but need to find:

Overview

Information sources to give me an idea of what I should be doing. Books, websites, magazines, papers etc etc.

Monthly

Monthly information sources for news and ongoing guidance. Magazines, websites, radio shows etc, etc

Weekly

Weekly news from papers, mags, web etc

Daily

Websites, email, newsfeeds etc

So, can it be done?

By the way. I'm serious.

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I think it may have been posted before but I have decided to have a small dabble in the markets and as an absolute beginner, I havent got a clue so want you people to teach me.

I believe you when you say that there is an awful lot of money to be made but how easy is it?

From a standing start at 16th January 2006, I want to start investing in "the markets"

I have a basic undersatanding of the basics but need to find:

Overview

Information sources to give me an idea of what I should be doing. Books, websites, magazines, papers etc etc.

Monthly

Monthly information sources for news and ongoing guidance. Magazines, websites, radio shows etc, etc

Weekly

Weekly news from papers, mags, web etc

Daily

Websites, email, newsfeeds etc

So, can it be done?

By the way. I'm serious.

I thought that you thought that property was the be all and end all. As you obviously do not it means i was mistaken (or your taking the piss) either way yoru best bet is to ask it in the investment forum, this thread will probably be moved there shortly anyways.

EDITED:

Well funny, it was moved before i even had chance to type this out :lol:

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Hrm, property has the unique ability to generate wealth out of thin air with no effort, are you sure you want to invest in companies or in resources that actually involve people actually doing stuff? :P

- Financial Sense radio is quite interesting for the book reviews, though I wouldn't get too hung up on pontifications of peak oil, there will be cyclical downturns before that becomes a issue.

- There are many books about.

- Watch a bit of Bloomberg, CNBC if only for some of their guests, but guard your sanity and avoid some of the US coverage. Bloomberg have a daily podcast which is worth a listen. In terms media, have a listen to Wake Up To Money On BBC R5 at 05:30am weekdays if you're up early enough, 06:15 on R4 is ok, Working Lunch? (hrm, bit too much on consumer affairs and lots of reductionism).

- Maybe take out a sub to the FT or WSJ Europe to see what's moving on that day, or the Economist (which is a bit like Morning Star calling itself the "the politics review"), Fortune seem pretty good for picking up trends but they're US focused.

Now that Kiyosaki is a bear maybe you could try Rich Dad and all the bumph, shame his books are about 5 years behind his current thoughts, he represents the ultminate flippant BTL personality, when someone like that gives up on a market then you know it has been milked for all its worth.

Be careful with the FTSE though (esp. the FT250) and gold, they've both had good run ups and don't leave yourself too exposed, trend is your friend, or not when there's a major shift. Lots of goldbugs were getting jittery around $520 because of the lack of support and nonconfirmation, things have jumped >$550 now though, this may be a side affect of the mainstream pressing going bullish (so sell).

Keep away from currency markets for now (Forex), or only trade with demo account, an option can go sour quickly and you need to be hands on (do you generally like to sleep at night?).

Read up on Fibonacci, dow theory, Kondratieff waves, Schumpeter.

Oh, nearly forgot, don't trade anything you cannot afford to lose, this isn't monte carlo. Don't get greedy, know when you've had a good run and take profits, even if this means going against trend.

Edited by BuyingBear

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Im in no way a pro investor, infact im relativly new to it all and there are people with much better understanding than me on here. So anything i suggest is just all my own opinion and if a decent trader on here disagrees with me then chances are they are right.

Suggestion 1: never make a trade based solely on what you read on websites magazines, radio broadcasts, flyers, etc.

Edited by theChuz

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Suggestion 1: never make a trade based solely on what you read on websites magazines, radio broadcasts, flyers, etc.

Totally, know what you're investing in and the sector they operate in, don't be flippant, it's not quite the same as racing tips :)

Lol, if you get a spam email tipping a stock then short it (DKDY recently?) -

p.s. I was being flippant with the above!

Edited by BuyingBear

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Chuz,

As you think property is crap, I think it is great.

But there is logic on this site if you sift throught the bitterness and there are some obviously astute people on here.

I have never tried to take the piss, only offer the view from my backyard.

I am in and will be in property but unlike some, I want to see things from the other side of the fence.

"I thought that you thought that property was the be all and end all" - No, I said that there is and will always be money to be made in property.

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Chuz,

As you think property is crap, I think it is great.

Like any market it rather depends on timing!

If you had bought the FTSE-100 at 6500 you wouldn't be best pleased when it sank below 3500 not long after, yet to others buying at that level they'll be pretty chuffed now (at 5700).

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BB,

Thanks for the info.

Hrm, property has the unique ability to generate wealth out of thin air with no effort, are you sure you want to invest in companies or in resources that actually involve people actually doing stuff? :P

Awfully lazy isn't it :lol:

But yes. I am curious to see what you lot are on about

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My opinion is that the first thing you need to do is learn how to trade a market. That is, how to develop, back test and implement a mechanical trading system. Once you've developed and back tested a system you should have detailed results for:

*The percentage of profitable trades

*Average profit per successful trade

*Average loss per losing trade

*Expected frequency and duration of trades

**Overall profitability both per trade (all trades both winners and losers) and over a period of time.

***The maximum drawdown of capital following a run of losing trades.

Don't forget to include brokerage costs in your testing!

Point ** is absolutely critical. If your system isn't profitable and producing a decent return over time then ultimately you will lose ALL of your money by trading it. This is known as having "positive expectancy" and is a must.

Point *** is also critical. If you lose all your capital then you're out of the game and how profitable your system would have been is irrelevant since you will be unable to continue trading it. This is known as "money management". The size of your positions will be determined by money management considerations. IMO you shouldn't experience a loss of more than 20% of your capital in total during a run of bad trades and not more than 2% on any individual trade.

Then you should thoroughly test that system in real time either on paper or using a demo account (an account with "fake" money from which you make no actual profit or loss - it's just to practice). Check that the results you are getting fall within the limits of your back tested results. You are doing something wrong if the actual results are substantially different or your system is a dud because it doesn't work in differing market conditions. Either way you need to find and fix the problem and then start testing again.

Once you have done all this and it checks out OK then you can start trading for real with SMALL amounts of money. A few % of your net worth at most. Keep trading EXACTLY as you were with the demo or on paper. Controlling emotions is the biggest enemy of traders so DON'T CHANGE ANYTHING. This is harder than it sounds...

Once you have proven that you are profitable, then you can put more capital into trading but do NOT risk a greater % of that capital on individual trades. Likewise don't increase the maximum drawdown by leverage just because you're proven to be profitable. Markets can change, people make mistakes and you don't want to get wiped out because of it.

Just my opinion of how to go about it. As for actual markets, don't be scared of forex just because most are. The reason they lose is because they over leverage by having a $100,000 position backed up with their $4000 capital. Keep it so you don't lose more than 20% of YOUR money (noting that with 3 times leverage that means not losing more than 6.66% of the traded amount) and have a proper system and you can trade forex successfully. Likewise stocks, bonds, gold, oil or anything else. DON'T OVER LEVERAGE IN ANY MARKET. The reason people have trouble with forex is simply because it's so easy to over leverage with it (which they usually do) rather than because of the market itself.

Finally, stick to a small number of stocks, bonds, currencies etc. Don't try trading 50 stocks at once or you WILL make a mess of it and probably lose big. Stick to no more than 10 at a time untill you really know what you're doing. Same with currencies - stick to a few (or even one) pair at first. And choose either stocks, forex, bonds, gold or whatever and stick to ONE market unless you really do become a pro. You'll find that a lot easier to get your mind around.

And stick to your time frames. If you design a system based on daily prices then you only need to check your trades ONCE per day (or weekly for a weekly price system, hourly if hourly etc). Start checking too often and you'll have all sorts of emotional problems and will likely make silly mistakes and lose a fortune. IMO you should work on daily or longer time frames and KEEP your day job. Don't even check your trades when at work and have a set time of the day (before work, evening etc) to attend to your trading.

Expect learning to trade to take a lot longer, and cost more in losses, than you are expecting. Giving up or losing all their capital due to poor management is why most fail (so make damn sure you understand money management before you trade ANY real money). Be prepared for a lot of Friday nights and weekends studying trading, designing and testing systems etc while you're learning.

And don't even think about how to spend the profits until you've actually made them. You'll have lots of emotional problems which lead to bad trading if you start thinking in terms of "this is how I'm going to afford to buy this or do that". Don't factor any trading profits into your financial plans, just treat them as a bonus once you've made them.

Edited by Smurf1976

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As a new amateur investor I follow exactly the opposite approach to that posted above. I see myself as in investor not a trader or speculator.

I have chosen a relatively small number of companies and funds and I have invested in them, buying even more shares in them when the price goes down.

These are companies which I believe will grow and will produce dividends and share price rises over the next 2 - 3 years.

Which companies to go for? There are thousands of choices. Look at trends, pick a market or geographical area that you know a lot about, telephone the company and ask questions about what they do, read all the comments on the investor bulletin board.

My aim is to achieve a relatively high return - certainly more than I would get by having cash in the bank or by BTL yields.

However I do not have the gearing you get from property, so I do not expect to accumulate the enormous equity paper valuations that property can provide (and it is too late for that anyway). On the other hand nor will I accumulate the enormous debt that property provides.

Re property - for what its worth -

I know people who have made a killing on the capital gains over the last 5 years. They have 'got out' and have become wealthy as a result. Good luck to them

I know a couple who have made a lot but then bought a house near Bordeaux with a small cottage in the grounds that they intend to turn into a holiday cottage. They are living the dream, but are also finding out that they have made their bed and now have to lie in it, for many, many years. No regrets, but no fantasy anymore either.

One guy who is a professional BTL landlord owned the flat above my old flat. He has not 'got out' and lives off yield alone. If I was him I would put ALL my properties on the market now. Its only a matter of opinion but personally I think that both rents and property prices will stagnate over the next few years. I think we will have a recession.

What ever you do, keep on looking after your kids and good luck in finding that humility that you seem to have lost in some of your postings. There is nothing clever about being smug.

Edited by paradox

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Hrm, property has the unique ability to generate wealth out of thin air with no effort, are you sure you want to invest in companies or in resources that actually involve people actually doing stuff? :P

- Financial Sense radio is quite interesting for the book reviews, though I wouldn't get too hung up on pontifications of peak oil, there will be cyclical downturns before that becomes a issue.

- There are many books about.

- Watch a bit of Bloomberg, CNBC if only for some of their guests, but guard your sanity and avoid some of the US coverage. Bloomberg have a daily podcast which is worth a listen. In terms media, have a listen to Wake Up To Money On BBC R5 at 05:30am weekdays if you're up early enough, 06:15 on R4 is ok, Working Lunch? (hrm, bit too much on consumer affairs and lots of reductionism).

- Maybe take out a sub to the FT or WSJ Europe to see what's moving on that day, or the Economist (which is a bit like Morning Star calling itself the "the politics review"), Fortune seem pretty good for picking up trends but they're US focused.

Now that Kiyosaki is a bear maybe you could try Rich Dad and all the bumph, shame his books are about 5 years behind his current thoughts, he represents the ultminate flippant BTL personality, when someone like that gives up on a market then you know it has been milked for all its worth.

Be careful with the FTSE though (esp. the FT250) and gold, they've both had good run ups and don't leave yourself too exposed, trend is your friend, or not when there's a major shift. Lots of goldbugs were getting jittery around $520 because of the lack of support and nonconfirmation, things have jumped >$550 now though, this may be a side affect of the mainstream pressing going bullish (so sell).

Keep away from currency markets for now (Forex), or only trade with demo account, an option can go sour quickly and you need to be hands on (do you generally like to sleep at night?).

Read up on Fibonacci, dow theory, Kondratieff waves, Schumpeter.

Oh, nearly forgot, don't trade anything you cannot afford to lose, this isn't monte carlo. Don't get greedy, know when you've had a good run and take profits, even if this means going against trend.

most of what you have posted I agree with,but I think commodities in general,including gold,are heading a lot higher....I don't dispute the logic of selling up when the mainstream get hold of a topic,but I honestly think that it has a lot further to be ramped......after all,property programmes have been on telly and growing in number since 1995 or so....only recently being taken to ridiculous amounts of airtime....gold and commodities have been given miniscule airtime in comparison.

...for what it's worth I'm puttin my money where my mouth is....I am STILL a buyer.

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As a new amateur investor I follow exactly the opposite approach to that posted above. I see myself as in investor not a trader or speculator.

I have chosen a relatively small number of companies and funds and I have invested in them, buying even more shares in them when the price goes down.

These are companies which I believe will grow and will produce dividends and share price rises over the next 2 - 3 years.

Which companies to go for? There are thousands of choices. Look at trends, pick a market or geographical area that you know a lot about, telephone the company and ask questions about what they do, read all the comments on the investor bulletin board.

My aim is to achieve a relatively high return - certainly more than I would get by having cash in the bank or by BTL yields.

However I do not have the gearing you get from property, so I do not expect to accumulate the enormous equity paper valuations that property can provide (and it is too late for that anyway). On the other hand nor will I accumulate the enormous debt that property provides.

<trunc>

Im the other end of the scale i dont invest im the eqivilant of a property flipper :lol:

I bought and sold about 40 times last year, i tend to collect 5% - 30% here and there just pulling a couple of hundred quid each time which gets reinvested, ive lost money on two trades so far which has left me up by about 35% on the year, ive messed up by selling way to soon to, latest balls up was with DebtMatters i took £500 (on the 5k i had bought into it) i was happy with myself until it carried on going up, i could of had atleast 60% :lol: such is life.

Ive just opened a CFD account which i will probably lose a fair chunk of money on, going to open my first position on monday morning. Might all end in tears we shall see.

The point of my post is that there are many ways of doing it and some are completly differnt, you have to find what best suits your personality (might sound daft but thats what it boils down to) It might take you a while to actually settle on a system, obviously im inpatient and will sometimes cut my nose off despite my face.

If you wet your pants if you see youve gone -20% on a stock then the way i do it wouldnt be any good for you. Hell, ive opened positions knowing that the spred+costs will put me immediatly down by around -30%. Do i think it sounds wise.. nope.. but it works for me.

I pretty much do all the things your not supposed to do but like i say it works for me (or has atleast done so, so far)

Whatever works for YOU.

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A property bull starts a thread on a website called housepricecrash.co.uk asking how to get into shares!!

:lol::lol::lol:

What's the matter LATK? Has the froth come off the property market or something?

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My opinion is that the first thing you need to do is learn how to trade a market. That is, how to develop, back test and implement a mechanical trading system. Once you've developed and back tested a system you should have detailed results for:

*The percentage of profitable trades

*Average profit per successful trade

*Average loss per losing trade

*Expected frequency and duration of trades

**Overall profitability both per trade (all trades both winners and losers) and over a period of time.

***The maximum drawdown of capital following a run of losing trades.

Don't forget to include brokerage costs in your testing!

Point ** is absolutely critical. If your system isn't profitable and producing a decent return over time then ultimately you will lose ALL of your money by trading it. This is known as having "positive expectancy" and is a must.

Point *** is also critical. If you lose all your capital then you're out of the game and how profitable your system would have been is irrelevant since you will be unable to continue trading it. This is known as "money management". The size of your positions will be determined by money management considerations. IMO you shouldn't experience a loss of more than 20% of your capital in total during a run of bad trades and not more than 2% on any individual trade.

Then you should thoroughly test that system in real time either on paper or using a demo account (an account with "fake" money from which you make no actual profit or loss - it's just to practice). Check that the results you are getting fall within the limits of your back tested results. You are doing something wrong if the actual results are substantially different or your system is a dud because it doesn't work in differing market conditions. Either way you need to find and fix the problem and then start testing again.

Once you have done all this and it checks out OK then you can start trading for real with SMALL amounts of money. A few % of your net worth at most. Keep trading EXACTLY as you were with the demo or on paper. Controlling emotions is the biggest enemy of traders so DON'T CHANGE ANYTHING. This is harder than it sounds...

Once you have proven that you are profitable, then you can put more capital into trading but do NOT risk a greater % of that capital on individual trades. Likewise don't increase the maximum drawdown by leverage just because you're proven to be profitable. Markets can change, people make mistakes and you don't want to get wiped out because of it.

Just my opinion of how to go about it. As for actual markets, don't be scared of forex just because most are. The reason they lose is because they over leverage by having a $100,000 position backed up with their $4000 capital. Keep it so you don't lose more than 20% of YOUR money (noting that with 3 times leverage that means not losing more than 6.66% of the traded amount) and have a proper system and you can trade forex successfully. Likewise stocks, bonds, gold, oil or anything else. DON'T OVER LEVERAGE IN ANY MARKET. The reason people have trouble with forex is simply because it's so easy to over leverage with it (which they usually do) rather than because of the market itself.

Finally, stick to a small number of stocks, bonds, currencies etc. Don't try trading 50 stocks at once or you WILL make a mess of it and probably lose big. Stick to no more than 10 at a time untill you really know what you're doing. Same with currencies - stick to a few (or even one) pair at first. And choose either stocks, forex, bonds, gold or whatever and stick to ONE market unless you really do become a pro. You'll find that a lot easier to get your mind around.

And stick to your time frames. If you design a system based on daily prices then you only need to check your trades ONCE per day (or weekly for a weekly price system, hourly if hourly etc). Start checking too often and you'll have all sorts of emotional problems and will likely make silly mistakes and lose a fortune. IMO you should work on daily or longer time frames and KEEP your day job. Don't even check your trades when at work and have a set time of the day (before work, evening etc) to attend to your trading.

Expect learning to trade to take a lot longer, and cost more in losses, than you are expecting. Giving up or losing all their capital due to poor management is why most fail (so make damn sure you understand money management before you trade ANY real money). Be prepared for a lot of Friday nights and weekends studying trading, designing and testing systems etc while you're learning.

And don't even think about how to spend the profits until you've actually made them. You'll have lots of emotional problems which lead to bad trading if you start thinking in terms of "this is how I'm going to afford to buy this or do that". Don't factor any trading profits into your financial plans, just treat them as a bonus once you've made them.

this is really sound advice.it's also useful to take a little trip back through history to get clues as to which sectors are likely to expand,or contract.markets follow cycles...so if you pick the right cycle,even if you suffer a short term loss,the chances are you will still end up in profit....but don't get greedy,turning points tend to sneak up on unwary investors.

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A property bull starts a thread on a website called housepricecrash.co.uk asking how to get into shares!!

:lol::lol::lol:

What's the matter LATK? Has the froth come off the property market or something?

Not at all. Still doing the property bit. Viewing quite a few next week in fact.

I've realised that to offer any kind of balanced argument regarding property against other investments, I need to at least have had a go at the others and as I have a bit of free time over the next couple of months, I though well why not take the plunge.

I'll let you know how it goes.

Thanks for the input and sorry If I have come accross as smug in other posts. I'm not really. I just like to be annoying sometimes as it generates good debate.

Edited by lookingafterthekids

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Not at all. Still doing the property bit. Viewing quite a few next week in fact.

I've realised that to offer any kind of balanced argument regarding property against other investments, I need to at least have had a go at the others and as I have a bit of free time over the next couple of months, I though well why not take the plunge.

The stock market reflects everything, it isn't a seperate entity, if you're really into property then you can buy into British Land, Land Securities or buy shares in the banks that are big in retail lending, and when things aren't so good you can dump them... and quickly to boot!

Alas, people think property means only buying highly leveraged over priced innercity luxury apartments, more fool them, going long on such investments is nastier than being on the wrong end of a spread. Mind you, I suppose they like property because they can fool themselves even in a falling market, they don't actually realise they're facing a loss until it's too late.

Edited by BuyingBear

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Not at all. Still doing the property bit. Viewing quite a few next week in fact.

I've realised that to offer any kind of balanced argument regarding property against other investments, I need to at least have had a go at the others and as I have a bit of free time over the next couple of months, I though well why not take the plunge.

I'll let you know how it goes.

Thanks for the input and sorry If I have come accross as smug in other posts. I'm not really. I just like to be annoying sometimes as it generates good debate.

I like that kinda attitude :)

Just pm me if you want a hand to lose your money on the markets

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Alas, people think property means only buying highly leveraged over priced innercity luxury apartments, more fool them, going long on such investments is nastier than being on the wrong end of a spread. Mind you, I suppose they like property because they can fool themselves even in a falling market, they don't actually realise they're facing a loss until it's too late.

Exactly!

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Right, update.

Listened to about 15 financial sense shows along with lots of others. Bought me a copy of Dummies guide to trading which I think gives a good grounding. Read about two trillion words on various sites. Read upon some of the indicators that have been recommended and read the paper every day this week.

Do you know what? The 'Whole' thing, i.e. not just the UK economy, housing etc but the whole connected world 'Picture' and how oil, gold, markets, wars, politics, trade etc etc all interconnect to have a bearing on what does and could happen all seems to be very obvious when you take the time to think about things.

Now don't think that I think that I have cracked it and will be using cold hard cash anytime soon to bet on my newly aquired knowledge but things seem to have become a little more obvious than they were. Thanks for the recomendations.

While keeping on with the global education, I would now like to learn about the various tools and sytems used to actually trade ie puts, calls, warrants, what does shorting mean etc etc and wondered if you could recommend any good reading material?

The UK Trader's Bible has been mentioned. Is this any good.

Any pointers appreciated.

Still like property though!

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loose money

loose money

loose money

loose money

loose lots of money

Read Reminices of a Stock operator, and then Sun Tzu the Art of war

loose lots of money

realise mistakes

loose money

loose money

realise a lot more of your mistakes

make small money

make small money

make small money

make small money

make small money

make medium money

make medium money

make medium money

make big money

retire

Edited by jonpo

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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