Thicky McThick from Thickland

[knightstreet]

Hi,

I'm totally, totally, totally new to trading and am having a spot of trouble with my research into the subject. Can anyone help.....

1) I'm interested in trading stocks on the London markets using GBP and possibly the Canadian markets using CAD. I notice that there are two exchanges in London denoted by ISS and ISE. If I open an account with an on-line trading company, which stocks are available to me and what are the advantages/dissadvantages of these two exchanges? Also there are various exchanges in Canada, which ones should i trade in as a beginner?

2) Am I right in thinking that there are expensive shares and cheap shares and that some shares will be out of my league financially since thay have shares priced in the 1000's of pounds region (in the case of the UK market). I would therefore be better off buying more shares at a lower price (looking at it very, very simplistically since I wouldn't base purchase on price alone)?

3) When you look at a chart with either candlestick formations or bar formations or whatever, the scale can be linear, logarithmic or percentage. Linear is price scaled linearly (i.e. the readings on the Y axis will be price in whatever currency the stock is trading in), Log is price on a logarithmic scale but what is percentage? Is it the 100% reading the original floated price of the stock?

4) Ordinary shares might have a label of 'INTL. Ord 0.5p' (in the uk market) What does Intl mean and what does the 0.5p mean (I presume 'Ord' means ordinary shares)

5) Should I start off just trading in ordinary shares?

As you can tell by now I know nothing and feel rather intimidated by the whole scenario of facts and figures and charts etc. So I won't be investing for at least a year of study into the subject. I'm finding it fascinating but I know I have a lot to learn...so anybody want to help me?

Thanks in advance,

CB.

 

[Mattybuoy]

Hi,

I'm totally, totally, totally new to trading and am having a spot of trouble with my research into the subject.

You're not alone matey They don't cover this stuff at school ...

1) I'm interested in trading stocks on the London markets using GBP and possibly the Canadian markets using CAD. I notice that there are two exchanges in London denoted by ISS and ISE. If I open an account with an on-line trading company, which stocks are available to me and what are the advantages/dissadvantages of these two exchanges? Also there are various exchanges in Canada, which ones should i trade in as a beginner?

I've never heard of the ISS. Maybe you mean the IRS (International Retail Service), which should be avoided. The ISE is the "International Stock Exchange, where foreign shares are traded on the LSE. As far as I know it is completely out of bounds to we punters.

What you want is a broker who offers "native" access to the Canadian Exchanges. Similarly, for US stocks. I would try looking at TD Waterhouse for a start as they are a Canadian firm with a UK outlet.

2) Am I right in thinking that there are expensive shares and cheap shares and that some shares will be out of my league financially since thay have shares priced in the 1000's of pounds region (in the case of the UK market). I would therefore be better off buying more shares at a lower price (looking at it very, very simplistically since I wouldn't base purchase on price alone)?

Shares vary widely in size of price. As you have surmised, since you can never buy less than one share, there may be some that are therefore untradable. However, the size of the price generally bears little relation to the value of the share in question. Or, at least, there are no hard and fast rules.

The value you need to look at to separate a small company from a big one is market capitalisation.

3) When you look at a chart with either candlestick formations or bar formations or whatever, the scale can be linear, logarithmic or percentage. Linear is price scaled linearly (i.e. the readings on the Y axis will be price in whatever currency the stock is trading in), Log is price on a logarithmic scale but what is percentage? Is it the 100% reading the original floated price of the stock?

A log scale works on base 10. So the first "step" will be 1, the second 10, the third 100 etc.

4) Ordinary shares might have a label of 'INTL. Ord 0.5p' (in the uk market) What does Intl mean and what does the 0.5p mean (I presume 'Ord' means ordinary shares)

"Intl" is just an abbreviation for International. The "0.5p" is the nominal value of each share. It is irrelevant, shares never change hands at the nominal price in the public markets.

In general, you can ignore the cruft that appears in the title of a security. What is important is the type. There are many different types of security available in the markets. A lot of these are derivatives, which should not ever be traded unless you understand what they're all about. A lot more are bonds, which pay fixed interest in various forms.

Ordinary shares or, in the US & Canada, common stock are "normal" shares.

Learn to think in "ticker" symbols, or what is called the EPIC code in the UK. These are the 2,3 or 4 letter codes which you actually enter into the computer when getting a quote or executing a trade.

5) Should I start off just trading in ordinary shares?

Probably a good idea.