Learning to trade (penny stocks?)

TheBiz

I'm 19 years old. I want to learn to trade and invest, I'm considering penny stocks as I have €500 to start with.
I'm under no illusion. I know penny stocks are littered with pump and dumps in an already very volatile market.
I'm not looking to learn long term investment strategies as of yet, I just want to learn how to start trading partially for enjoyment, learning and the possibility (however unlikely)
Where do you recommend I begin?
What online resources are recommended?

BrokenArrows

If you want to learn then just open a demo account.
This gives you full access to the software without the need to worry about money.
You will learn how it all works.

https://www.saxobank.com/demo-account/

Francie Barrett

TheBiz wrote: »

I'm not looking to learn long term investment strategies as of yet

Why not? Investing for the long-term is by far the easiest way to make money. As someone who has been done the trading/penny stocks route, if I had started investing for the long-term at your age, I'd be a millionaire by now. Instead, I wasted a lot of my early life looking at oil/mining/penny stocks, trying to figure out systems and trading strategies. It was all a waste of time, on aggregate I learned very little and lost money for a lot of time invested.

daheff

penny stocks are for mugs or people with insider information.


The big boys stay away from these for a reason...so should you.

Roosterreid

Francie Barrett wrote: »

Why not? Investing for the long-term is by far the easiest way to make money. As someone who has been done the trading/penny stocks route, if I had started investing for the long-term at your age, I'd be a millionaire by now. Instead, I wasted a lot of my early life looking at oil/mining/penny stocks, trying to figure out systems and trading strategies. It was all a waste of time, on aggregate I learned very little and lost money for a lot of time invested.

Francie, where would you recommend someone starts investing? I'm 40 and have a reasonable pot of savings gathered up - money that is not making me anything.

I don't know where to start... I have bought a few investment books recently so working my way through those.

xlogo

Is 500 enough for long term? "or what would be the best starting point?

frank0r

Roosterreid wrote: »

Francie, where would you recommend someone starts investing? I'm 40 and have a reasonable pot of savings gathered up - money that is not making me anything.

I don't know where to start... I have bought a few investment books recently so working my way through those.

You have to be careful, been honest I would look at your pot and depending on the actual real value of it I would divide it up in to several chunks.

Chunk one.. do not touch money, put this into some long term savings like bonds WITH yields or some such.

Chunk two.. Medium risk, this would be the type of investment that you can use on the markets but its something that you should be slightly risk averse. Look for companies that issue dividends and again you can look at this like interest earned and still keeping your stake!

Chunk three .. this is the risky stuff, like eft's, currency markets etc. You can make MASSIVE profits on this with little money, truely massive (few months back I turned €105 into €3410 in a couple of weeks by shorting oil (its a form of betting) but so much more addictive and SO MUCH MORE DANGEROUS even if you do know what you are doing.

But if you control your investments and been honest train yourself to only look in to investments of Chunk One and Chunk two ever so often as these are long term ones and remember with investing in over 99% of the time YOU ONLY LOOSE WHEN YOU SELL. Yes your stocks could dip below what you bought them at, but in the same breath when the market turns it will then move back up. (you can off set looses if you spread your investments over time even doing some small leveraged options, but getting involved in Stock/Commodity arbitrage is messy, risky and not for the fainthearted.

There are some excellent tools to help you track your investment portfolio and like Yahoo Finance, MSN Money, Google Finance, or even creating your own google doc one with links to pull the values. I built my own investment tracker and am in the process of actually creating (personal use only) a system to track stock value vs dividend vs company real book value and automatic weighting (along with few other fun matrix's).

But remember this is the Internet and everyone has an opinion. If it was me I would read up the finance sites (and lots of these have to be honest vested interests like selling newsletters etc.

Great source of independent advice and some truth behind some of the financial newsletters is http://www.stockgumshoe.com/

Now remember that nice return I made on the Oil, well with EFT's and leveraged investments you can decide to cash out... which I did before it turned and made a nice tidy profit, converted it to buy order on gold (I used 50% of the profit and did not follow my own rule of using moving 50% of profit into medium to safer investments (so this can grow), using 25% as stake and balance on covering the losses on fluctuating price while waiting for the small break out. Now unfortunately I was traveling (another rule I have never be away from a device if investing on leveraged products that you are not able to cover. Well 2 hours before break out I left the account short by $93.72c and it turned ( I would have moved more in as I new it was about to happen... well it turned and my stack would have turned to $21,749.

Ironically I am not depressed about it, as I did not loose all this money, I only lost my original stake! The lesson I take from it is make sure you follow your own rules, (but ever so often evaluate them and refresh them as the market is always changing).

Francie Barrett

Roosterreid wrote: »

Francie, where would you recommend someone starts investing? I'm 40 and have a reasonable pot of savings gathered up - money that is not making me anything.

I don't know where to start... I have bought a few investment books recently so working my way through those.

If you are getting started out and want a simple life, then just drip feed your money into a few indexes. VTI, VEU, VWO, VCIT would cover most the worlds stock/bond markets. All you would need to do is periodically re-balance towards bonds as you get older. You are following the market, you will get average market returns for very little effort/time invested.

If you want to invest in individual shares, then you need to invest a lot more time into learning accounting statements and balance sheets. This requires time/efforts, and may yield a result inferior to just buying the index. I think you really would need to have a serious interest in investing to follow this route.

Serje

You have to find a reliable mentor to make sure you won't waste all your invested funds