New Trader

[JohanB_1]

Good Day I am a newby were it comes to online trading and I need some advise please. Currently I am testing this online share trading and are not dealing with lots of money at this stage - less than R1000 When I buy shares - how do I turn the fees into profit as every time you buy a share there is +- R90 fees involve. Do I use all my money available on one spesific share or do I need to split it up between say two or three - when I do then the fees are double. How do I no what shares to buy and when to buy them? I no this sounds like silly questions but as a newby I am still learning the trade market. I would like to get as many advise aspossible and will post more questions as I go along. Regards

[#2]

Normally you would want to trade with a bit more money. Like you say, the costs involved make it difficult to turn a profit when your trades are small. It is good to invest in multiple shares in different sectors. This is called "diversification". Diversification lowers the volatility of your portfolio, and protects you against disaster (e.g. the company going bankrupt). However, with the small amount of money that you have available, buying a diverse basket of shares would not be possible. Rather save a bit more before you start, and learn by paper trading (i.e. pretending to trade and keeping track of your gains and losses, without actually trading).

[KVW]

You can track your paper trading by setting up a detailed watch list.

[Blik]

I started out similarly, with low cost trades around R1500 a trade, and quickly realised that your profit is erroded due to the % transaction cost. However I dont regret what I did then, because I havent sold the shares, and only add to them now (in the long term 20 years plus, this should work in my favour). Still my minimum trades are now between 5K and 10K, unless I am buying a risky share. Setup a watchlist and start tracking shares that you find interesting. Download their financials and see if they are worth buying at the price they are trading - if not wait until they are. Read what people stick on the forum, but take everyone's advice with a pinch of salt - do your own research - then you cant blame anyone.

[louisg]

I recommend that you do some reading about the market BEFORE you start buying any share. As a long term investor I would recommend "Essays of Warren Buffet by Lawrence A Cunningham; "The Richest Man in Babylon" by George S. Clason and "Common Stocks and Uncommon Profits and Other Writings" (Wiley Investment Classics) by Philip A. Fisher. Perhaps the techies on this forum can recommend some short term trading books. Good fortune to you.

[barry_1]

I'm sure we shall help all we can.You have passed the first test by being polite to us existing forumites,thank you.

[john_1]

TA does not equal short term..TA is TA..FA is FA and time is is a seperate component....I know you not stupid so stop being obtuce.

[john_1]

Take your 1000 bucks and go buy SATRIX TOP 40's available at starix.co.za do this every month for the rest of your life and you will retire weathier than most. Then when you actually have some money ( at least R10 000 per share) you can afford to buy actual shares. But if you are smart you will just put the R10 000 into satrix also. That is about as much info as you will ever need to profit from the market.

[JohanB_1]

Thanks Bary I always try to be polite as I am new and want to learn from you and all the other experts that do online share trading. Thanks for everybody's quick responce and advise so far. Regards

[louisg]

TA = SPECULATION

[louisg]

Now that's probably the smartest thing you have said on this forum John. You would do well to take your own advice. Or perhaps you're a closet Satrixer already?

[Maggie]

John John John, who wants to be a millionaire when they are 120!!! I know you dont like us day traders but hey life is short!!!!!

[louisg]

I LOVE day traders. Short term traders create the opportunities for me to purchase QUALITY companies with GROWTH prospects at below fair VALUE. Short term traders and long term investors pay the SAME price for a share. However thanks to the short term mentality of the market, shares are often priced at the share's short term prospects and therefore allows the long term investor to buy the company's medium to long term prospects at short term prospect prices. eg Banks' short term prospects are not great but their medium to long term is (IMO). The long term investor will pay the same price as the short term speculator. While the long term investor has to take into account the opportunity cost, the short term speculator has to consider the extra trading costs as well as higher punitive taxes.

[Copper]

Dont listen to the forumites and their banter!! Take the R1000 and buy a bottle of Caol Ila 16yr old. The sadistic headache and punch drunk sensation, although similar to the feeling while investing in the current market, is far more short lived. And you have the added benefit of an excuse for kicking the cat and urinating on your neighbors stoep.