I got interested in trading recently and want to get in on the action. I have started reading on general topics in finance, but I'm starting to get bored since I can't see how it will help me be a better investor. Q1: do the basic topics in finance help me at all, or is it just there to help me understand all the financial jargon? I have a bit more than $10k extra after paying off tuition and rent and it will hover around that number for the next few years (income from my co-op job will just be enough to pay off my expenses). Since I have no clue what I'm doing, I will probably risk around $2k at first. Q2. as a novice, what are some good places where I can start? Q3. can strategy be learned from books, or is it developed through experience? If it is the latter, are there at least books out there that can help me think like a trader and develop my own strategy? Other general advice for a novice is highly appreciated as well.
You never risk any money till you do have a clue. (this advice alone is worth couple of millions to the right ears.) ...and last but not least, being a trader means being better than everyone else. And if you don't become the best there ever is.. there is always that day when someone better than you can cash you out. Thus, you must do more, want it more and go after it with everything you have and the journey is very boring (advanced warning.)
My advice would be: take your 2k and go play poker. You will understand how trading works after that.
i suggest playing online poker, you willa ctualyl learn a crapload from it, psychology, how a market works its all poker
I would suggest not gambling. Trading is not comparable to gambling. You may learn probability with poker, but thats it. You should spend that money on books. Start with Reminiscences of a Stock Operator and both of the Market Wizards books then decide what type of trading you want to do
Educate yourself thoroughly on the methods you have chosen to trade. Internalize every facet of your methodology. Perform the due diligence required to understand the rewards and the risks involved with each trade and all your trades. Position size accordingly. Know the 'target' and the 'stop' and Pull the trigger. Manage the trade accordingly by knowing, "What must come next if your trade sits on the right side of the market," and "What must come next if the market says your trade sits on the wrong side of the market. Have the discipline to take action as required. Lastly, learn to develop critical thinking skills. You'll need them. - Spydertrader
If you're the best risk manager you can be and not the ballsiest risk taker you won't ever be "the best" but you may the best chance of lasting long term. The journey isn't boring at all, wtf are you talking about. It's interesting to learn how to trade. If you find the journey boring trading isn't meant for you.
"be a student, not a follower ... formal education will make you a living; self-education will make you a fortune" - James Rohn Some things you just got learn on your own.
Read some books, watch some CNBC, maybe watch some daytraders on youtube. Then take your 2k and buy whatever you want, for whatever reason you want. When you lose it all, try to figure out why, and what you can do to not lose it all the next time (or not lose it as fast). You don't have to lose money to learn how to trade but it really does help. Might as well get it over with.
1. Start with money you can afford to lose. 2. Plan on losing it. 3. Don't be surprised when you do. 4. If you attempt it again try and be more objective about the markets and how they work. 5. Rinse and repeat.