so ur a wannabe trader?

[julesrules]

Im 17 and have quite a bit of experience more than my modest years suggest. If you want to reach the pinnacle of trading then i believe there are 3 steps/stages to build up to, although each level will provide a significant income.
1.BetonMarkets
a great way to start betonmarkets is actually fixed odd financial betting. There are some high level opponents to it on this board, however it is ideal for newbies, it is fairly easy to grasp and it allows the investor to gain a greater knowledge of the market. It also has limit risk. It is also easy to be profitable.
2.Spreadbetting
A Step up from fixed odds betting, in its difficulty and as a prominent member says "spreadbets are for mugs" i dont entirely agree with that for a beginner spreadbets are an attractive investment tool. A smaller start up capital is required to make respectable returns than would be needed to day trade.
3. Day Trading
It is by far the most popular method of investment on T2W, it has grown exponentially with the growth of the net. Large amount of capital required to make modest returns. There is also a high amount of risk so it is not a thing i would be tempted to do also it isnt tax free unlike the other too.

BoM is a brilliant way to start trading, i cant recommend it enough

XxJulesRulesxX

 

[FTSE Beater]

Hi all

Just to add another point

0) - Trade using the T2W competition. There is no need to put money into the market right away. I know at the start the glitz and glamour of the winning trades and money in the bank is appealing, but there is no rush - The Markets will always be here.

HTH

 

[Bodacious]

I have been doing that in the share competition. It does show you how much you can gain and of course lose without actually using any of your own money. The when you understand it a bit better etc it is worth trying it with your own money.

As of yet I still don't understand what I am doing but I am learning .

Cant get to grips with this Short and Cover thing

 

[waytogo]

Selling short is quite simple really - what you are doing is saying that you want to buy something at some time in the future when (hopefully) the price will have gone down. In order to do that you have to put up the money as the price stands now. Covering your short position is the time when you actually close that position. Your profit (or loss) is the difference between the price when you open the position and when you close it. This type of trade can only be done with derivatives (eg cfds, spreadbetting etc) and not with real shares.

 

[Skimbleshanks]

When you buy a stock for it to go up, you are going long. You exit that position by closing it (ie, selling).

When you short a stock you are selling it, with the intention that it goes down. To exit that position you cover your short (ie, you buy the stock to replace what you originally sold).

So, buy then close.
Short, then cover.

 

[Trader333]

From a brokers standpoint

1) when a client goes "Short" they actually sell a stock that they do not yet own.

2) They are hoping that the stock will go down in price

3) When they cover the short it means that they buy back the stock that they never owned and hope to make a profit by pocketing the difference.

So for example:

Lets say Microsoft (MSFT) is trading at $25.00 and I think it is overpriced and will go down in value so I click the "Sell Short" button on my trading software and the quantity is 1000

The price of MSFT drops to $24.50 and I decide to "Cover" my short position (ie buy it back) I am now out of that trade.

So I sold 1000 at $25.00
I bought 1000 back at $24.50

Profit = 1000 x (25.00 - 24.50) = $500

But if the price had gone up to say $25.25 and then I "Covered" my short my loss would be as follows:

I sold 1000 at $25.00
I bought 1000 at $25.25

Loss = 1000 x (25.00 - 25.25) = $250

I hope this gives and idea of how it works


Paul

 

[money123]

what brokers allow me to short stocks?
thnx

 

[FTSE Beater]

Hi Money123

I don't know of any brokers in the UK, which is why I use Deal4Free.

In the US, I think every broker allows you to short. Might be wrong though

 

[Trader333]

Interactive Brokers allows shorting of stocks, but you would need to check which stocks can be shorted as not all are allowed.


Paul

 

[money123]

if i close a short for a profit do i just collect the difference or do i have to sell the stock after buying it back?

 

[FTSE Beater]

You just collect the difference

 

[Mr. Charts]

There are many UK brokers who will let you short UK stocks, but they need to know you, so beginners with no trading track record are simply refused.
When I traded UK my broker gave me X 5 gearing on T10-T25
Trade the US to make real consistent returns instead.