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Online Share Trading

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Newest Newbie - help needed

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Not applicable
Hey guys - for your very first trade (and with limited funds), what do you suggest should be your investment capital (i.e. R5000, R10 000 etc. per share). And what margin of profit should you be looking at (I understand that the more capital you have the better (well the margin would be less to make a profit)). And say you only have R10 000, should you split them up into 2 or more shares or rather try 1 share (more capital, lesser profit margin need to make a profit). Please help? No job, no food, no money and 10 children to feed?
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36 REPLIES 36
Not applicable
Do not put your eggs in one basket. First you need to state what type of investor you are i.e. you investing for the short or long term. And lastly do not invest on emotions, make sure the money you using you not gonna need it in the short term as the market offers returns long term. Good luck.....
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jack12
Super Contributor
rule of thumb, no more than 10% in any one share. depends if you scalp, day, swing, medium, long term trader. for a scalper a few cents is good. daytrading bad day 0,1% goodday 2% and when it is fantastic 10% but then you can loose 15% in a few hours.
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Not applicable
Excellent thanks for the sound advice...I'm still checking the scene out so expect a couple more stupid questions. :-)
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grommet
Regular Contributor
If you only have R10 000 . You better off saving a lot more before trying because costs will kill you
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Not applicable
I lost big bucks in the beginning. Taking losses on trades is the hardest thing to do, once you get past that you start doing well and the big trades will count. I recommend play small till you become more experienced
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richardw
Super Contributor
Buy an index fund (Satrix 40, say), and BAT. I don't like BAT because I feel nasty owning anything to do with smoking, but it's likely not going to lose your money for you. The index fund might, but it's better than any 1 share.

Read up on dollar cost averaging and value averaging (better, imho). You can't do much of that with not much cash, but it's a great starting point.

If you can, the best advice I can think of is to buy stuff that you intend to never sell, that pays you dividends. Each trade costs you money, and thinking like this means you are more careful with the purchases. There might be drops and rises during the time, but this next year or two is likely to be the best opportunity you ever get to buy stuff that will pay you money indefinitely.
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og
Frequent Contributor
I beg to differ on the no more than 10% on a share rule especially if you are starting off with R10k. 10% implies R1 k per trade transaction and the transaction cost alone will represent 10% of your trade value. Rather go for 2 trades and minimise transaction costs omo
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richardw
Super Contributor
Agreed og. And an index fund gives you more shares per transaction.
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bangbul
Regular Contributor
Study, study and study more. Technical Analysis, fundamentals,commodities; everything! Be carefull and patient. Good luck!
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saash
Super Contributor
DCee, with R10k, you only want to be looking at Satrix, and trading over a longer investment period. Imo.
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SimonPB
Valued Contributor
top tip .. invest don;t trade for at least 5 years ..
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louisg
Super Contributor
Dcee this is the best advice you are going to get. For the next 5 years educate yourself as much as possible. Read, read and read some more. Simon is by far the most experienced investor/trader on this forum.In my opinion anyway. Make use of his wisdom.
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Not applicable
Hi Newbie, I am also newbie, and I have just started trading about a month ago and with only few thousand rands. Practice makes it perfect and I can tell you my friend that by just sitting on the sideline and educating yourself for 5 years is just sad back. learn by doing, I think your trading skills and emotions would have inproved in a year's time or so. Get going Newbie.
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Blik
Super Contributor
Dcee, I started off limiting my share buys (trades) to values of about 1500, as thats was about all I could afford. I have slowly over the past 4 years built that up to "trades", or buys of around 5000 - 10000. I dont trade in the strict sense, and tend to hang onto my shares a bit too long, but thats my strategy - buy what I think are good shares and hang onto them. When I have extra cash, irrespective of amount, if I want more shares in a company, I tend to buy, although these purchases tend to be greater than R1000. I do take the odd small value punt on some small caps in the hope of getting that 10 bagger - I have gained in some and lost on others. If I could trade I would - but I need to go on all the courses first. Listen to Simon - he tends to be a voice of reason on this site.
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Not applicable
Thanks a lot for all the advice people! I think I get it now, unless you have plenty of cash that you're willing to "throw away" rather invest and start studying this interesting field until the investments pays off, giving you enough money to start off. Thanks in anycase - I will however still be asking similar stupid questions every now and then :-). Thanks guys!
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Blik
Super Contributor
I dont think that is the case - if I only had a spare 1500 to invest, I would probably buy Remgro or MTN or SBK, and keep for the long term, and not worry too much that the value of the trade, an odd R100, is 6% of my purchase. And when I get my next annual bonus, I would probably buy some more. Education is never ending - but I feel unless you are in the market and have something to lose, one tends to get a bit blase about the whole idea.
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Zirk
Frequent Contributor
Paper trade first. There are many platforms that give you a testbed that is just like the real thing with sufficient "monopoly" capital to see how quick you can show a profit/Loss. Get involved with MM(money management) then TA(technical analysis) and fundamentals of the companies you are looking at. You only become a good "trader" once you have learnt how to lose your own money tho. Make your own decisions after listening to all and sundry. Well i wish you beginners luck
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richardw
Super Contributor
Also, join Werner's forum here: http://www.valueinvestorsa.com/

It'll give some balance to the trading talk you'll mostly read here.
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Not applicable
Thanks guys! Really appreciated...noted...
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