M
malaguti
No index is better for a beginner, stick to something that doesnt move so much, is affordable (as you will lose money) and gives you time and space to get a strategy going that you can then develop. You can then as time goes on, move to higher priced stocks and then you can get onto indices.
That would be my advice, for a beginner
M
malaguti
You didn't hear me, don't start off with an index.
new_trader
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I disagree with malaguti. An index is perhaps the best thing to trade because they are typically less volatile than a stock, although this is rendered meaningless with leverage. But, excluding major market events, a main stock market index rarely moves more than +/- 1% on a day whereas a single stock can move by much more.
If Jesse Livermore were alive he would tell you that trading a commodity is better than trading stocks because all you need to study is the true supply and demand situation, whereas with stocks you have things like incompetent CEO's, 'unexpected' dividend cuts, profit reports etc. to worry about.
Find an instrument that has at least these qualities:
1) Trading hours that suits your lifestyle
2) Lots of historical data that you can research
3) It interests you
Make no mistake, THERE IS NO SUCH THING AS AN EASY INSTRUMENT TO TRADE.
Make sure you choose one and then stick to it like glue. Study it like you plan to be the worlds expert on it. Learning to trade is a long and arduous journey, you need to start right and don't stray from one instrument to another. Once you learn how to trade, you can trade anything, so, let me repeat,
THERE IS NO SUCH THING AS AN EASY INSTRUMENT TO TRADE.
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M
malaguti
I'm not sure we do disagree..
http://www.trade2win.com/boards/indices/180436-why-do-people-trade-indices.html
post number 6 I say exactly the same as you..so I think we're very much aligned.
But thats a question that can be answered directly, and the level of proficiency is not in question.
In this example, proficiency is the major difference, which Index should a BEGINNER trade.
So yes I agree that an index is far better, but I would strongly disagree that a beginner would do that. Let him trade an index, and see how long his account lasts for..thats not my advice.
Just so we're clear. But we all have different opinions, and mine is no better than the next persons
Triggerfish
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A demo account will solve the "beginner" issue.
yellowfloyd
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Hi Andrew,
I would suggest the FTSE would be the best place to start for newbies. It is governed by the 100 companies that make it up and even then there are only 2 or 3 sectors that will really make it move in sizeable increments. The German DAX will generally be for the more experienced traders as it is very volatile, mainly due to the very few firms that make it up (30). The other popular exchanges will be the US Dow Jones and the US S&P 500, both these can at time be fairly spicy. However the S&P would probably be the less volatile of the two.
M
malaguti
I agree, a demo account whilst he's learning and to test certain startegies. but thats still not trading, and a person can and should learn whilst also trading. And this is where the op can learn and trade in real situations by using Lloyds for example at only 70p and only ever risking a fraction of what he needs to. There is no chance of losing all your capital trading Lloyds :smart:
There is a huge chance he will lose that capital trading an index, if he is still new to the game (or even if he's been doing it for some years!)
You'd really not start with an Index, but start with currency pairs.
The Dow is easier to trade than the Euro - in fact the Euro is one of the worst to trade, as its heavily manipulated
if your new to FX trade the better trending pairs
not sure about the FTSE, as don't trade it, but its likely a follower and not a leader such as the Dow and S+P
trade the long term charts and build a strategy around those
and do NOT short much (until its exactly the right time)
as the index's have an upward bias
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timsk
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Hi Andrew,
Welcome to T2W.
There is a small amount of conflicting advice that you've received - but not much. Stick to the common ground and you won't go far wrong. You must understand how the index you propose to trade is constructed and how it relates to it's sibling futures contract (if you intend to trade the cash index) and vice versa if you intent to trade futures. A good stating point to help with that is this Sticky: Essentials Of 'Indices'
The key point - as has been emphasised by others - is that there is no 'easy' market or instrument. If there was, everyone would trade it. However, each trader has their preferences and your task is to work out which one will suit you best. On that note, this FAQ may be of some assistance: Which Should I trade - Stocks, Futures or Forex etc.?
Enjoy!
Tim.
