jjmac wrote:Have you considered dummying it. To get rid of the stress element in order to see what the actual luck factor is.
I started off reading several books, just to get try and absorb info from people who's been there, seen it, done it etc
Come Into My Trading Room - Alexander Elder
The Naked Trader - Robbie Burns
Selecting Shares That Perform - Richard Koch
The Harriman Book of Investing Rules
I then paper traded for a month, got frustrated due to paper profits not being real and dived in.
Paper trading is fine, but its not the same as with real funds, you really do make different decisions.
And the buzz from the wins and losses is no way near as exciting as the real thing.
Anyone with a gambling streak should leave well alone (unless they are any good of course). I never used to gamble (horses), but it can be a real buzz, and it covers the weeks beer money, so can't complain.
I've noticed that really successful people in that kind of business always end up mention that they have been amazingly lucky, rather than anything else such as actually having had any economic insight.
I think its important to be able to read markets, how they interact, to appreciate what stage were at in the economic cycle, be able to understand a balance sheet and have plenty of spare time to read RNS updates and decipher various statements.
But beyond that, if your not insider trading, then luck appears to be key.
Successful investment = 20% Fundamentals, 40% psychology, 40% luck/timing.
disclaimer, 90% of stats are made up on the spot.
For example, if I'd made the same decisions I did in March '07 in March '04, it's more than likely going to have ended up very nicely. But because everything is in flux right now, people talking about the next "great depression" etc, its been very difficult.
Keeping the companies I invested in this year, "IF" the timing had been better I could have turned Â£1 into Â£15 within 8 months. Instead its more like 50p.
The decision making process on fundamentals has been pretty good, having picked out several takeover targets. But the psychology and timing have been shocking. And this is largely due to violent trading, which is largely down to greed by banks (and ultimately shareholders). CDO's and SIV's. Just a few letters which have caused billions to be wiped off of peoples savings and pensions and lead to a freeze in equity markets, making my next move to a lower floored residence impossible without a lottery win
Psychology appears to be more important than fundamentals, if a market is loved its way over bought beyond sense (they always go down eventually). And those which are out of favour, for no financial reason, will take an absolute beating (eventually coming good).
There's an IRC channel I'm sometimes in (unfortunately I can't as daytime job requies the hours at the moment). I'm in Windows now, but when I'm back in Linux I'll look at the settings and post back, it might be worth bumbling in and saying hello and seeing what people are upto / into.
PS. When day trading, I always use Linux. The response time from web based platform is WAY more responsive than Windows.