frinos said:
So as a beginner what kind of trading should I start with? If I can only trade in the evening (from 7pm onwards) then this means that I can only trade as a day trader or EOD trader in US stocks... Ehm, thats it really... what other choices do I have?
You are indeed a bit stuck - personally if I only had 2 hours after a days work - I wouldn't bother with trying to be a gunslinging day trader, it is hardly a relaxing pasttime and the more tired you get the more likely you are to make a mistake. So, this leaves you with medium/long term trading (swing trading), there should be no problem selecting a 'universe' of stocks to look at and trade in a more relaxed and controlled fashion. - or look to get into options which are also a more medium term trade, but I woulldn't go anywhere near them until you have some idea of how to deal with 'normal' trading.
Also is it possiple if one of you kind sirs/madams gives me a brief description on how trades are made in commodities and fx.... I kind of know the difference between futures, options and spread betting but I have no idea how you trade in commodities and fx. Are these just forms of spread betting? What is the underlying stock for fx?
Most commodities are traded as futures contracts, so are very easy to buy or sell. Some contracts are available on a monthly basis, most follow a standard 3 months as the front contract before expiring.
FX can be traded as both hard cash or as futures - again, the easiest method (in my mind) is futures. There is no 'stock' for fx, just the real thing - the advantage of futures over cash is also the gearing, as an example one contract of GBP/USD (Cable) represents $62500, but can be held so long as you have as little as $1600 in your account.
Anyway this is what I think futures, options and spread betting is.. please correct if I have been misinformed...
Futures are where you purchase or sell an underlying stock at an agreed date and price in the future. Hopefully the price you agreed will be different than the spot price on the exercise date and so you either make a profit or loss.
No, futures represent a method of buying or selling a product now without having to take physical delivery of that product until an agreed date in the future. The reason that the price is different from the cash price on the day is that there is a 'cost of carry' built into the futures price (in basic terms this represents the interest and handling charge). You may come across people talking about 'fair price' for futures. The fair price of a future is a combination of the current cash price plus the amount of days interest through to the expiry of the contract. So, as a contract approaches closure, the cash and futures prices converge until, in theory, they are worth the same thing on the last day.
Options are similar to Futures in that you agree to purchase a stock at a certain price in the future BUT you don't have to buy the stock if you don't want to. I think there are Americam options where you can exercise your right to buy the stock at any point till the exercise date and European options where you decide whether to exercise on the actual exercise date.
Sort of, if you buy an option, you have bought for a premium, the right, but not the obligation to buy (or sell) a product at or by a certain date in the future. Some options deliver into cash/stock, others into futures contracts (which can be then bought or sold as futures).
Spread betting is where you are given a buy and sell price on a particular stock and you indicate how much money you are willing to bet per point rise or fall from that price?
Basically, yes - again how different companies deal with different products varies.
I apologise again for the daft questions... I could just use google to save myself the embarassment but using google isn't going to add me posts to my account.. ;-P
The only daft question is one that isn't asked.
Day 1, start at the beginning of ths thread. If you are serious about learning to trade there are some very good posts about pre-trading style planning, some honest questions for you to ask yourself - it may even stop you falling into the clutches of those that can 'teach you the secret of trading' or give you that special 'system'. oh - go get yourself a copy of JJ Murphy.
Best of luck.
Out of here.
