Hi JavaAdict; Richard Estes and IntelligentSpeculator.com and the others on this thread have given us some great advice!
I think the thing to do with a couple grand in the market is to spend about $300 at BKS. Not the stock, the bookstore. Read through this thread and buy the books mentioned the most. My personal favorites are Trading for a Living, and Electronic Daytrading.
As far as the amount required to start trading with, I think $50,000 is enough to learn whether you are going to learn. On the other hand, a certain very good and successful trader I know, started out with $5,000 that he had obtained through the use of maxed out credit cards. I wouldn't advise this. So most of your efforts should be spent in saving enough of a nut to begin trading with, in reading, and in paper trading.
By the way, it's easy to save money. Just look around you, and find someone who makes less money than you, and imitate them. Take the difference between what you earn and what they earn, and hide it from yourself. If you spend all free cash, then you can hide money by putting it into really dull investments. I suggest utility stocks...
The primary goal of all traders should be to survive to trade another day. The goal for a beginning trader is harder. His primary goal is to survive long enough to learn to trade. To reach this goal, make sure that you sign up at a place that has low commissions for small trades, and make sure that your trades are small. 100 shares is too many for an overnight hold in a lot of stocks (i.e. AMZN) for beginning traders. Buy or short small, odd lots.
Remember, the primary goal of a beginning trader is not to make money. It is instead to learn to trade safely, and to guard his pile from sudden changes in value. It is almost as deadly for a beginning trader to have a sudden 50% increase in equity value as it is for him to have a 50% decrease, due to the bad habits such sudden wealth almost inevitably causes.
After learning to trade safely (i.e. stops and money management,) the next goal is to learn to trade at a profit. But you will never get to this goal if you don't learn the first ones.
Best of luck.
-- Carl |
