Lots & lots of stocks... investing, trading & career change.

[IntentionallyBlank]

Good afternoon everyone,

If I may be so bold, I'm after a little friendly advice if I may...

I've recently set myself the goal of becoming proficient at trading, as I am fast approaching a mid-life career change, and rather fancy the challenges/rewards it potentially offers. Over the past few months I've read various books, websites, blogs and watched (probably) hundreds of YouTube videos about trading, however, they only get you so far!

With regards to stocks:

- What are the best (most powerful) free stock screening/filtering sites?

- If I were to use a system such as William O'Neil's CANSLIM as a basis for developing my own system, what is the most efficient way of determining aspects of the fundamentals such as 'something new', relative strength, and institutional sponsorship?

- What is the best method/resource for determining which countries specific companies are exposed to (and vice versa)?

- There are websites, such as Stockopedia, which (for only £25 a month) give you access to various screens/filters... are they worth it? I'm VERY wary of spending any money at this early stage in the game, given my naivety in this field weighed against the number of scam training websites & trading systems for sale.

Any help along these lines would be very much appreciated... as would any tips/general advice on trading forex, commodities, options/futures, and ETFs; albeit, for those who are slightly concerned about me - fear not, I will be taking everything with a healthy pinch of salt! I may be new to this, but I wasn't born yesterday, and I'm certainly not in the market for a 'magical get rich quick' system (for only £3,000)!!!

Many thanks in advance.

[dodgydave]

I pay £200 a year for stockopedia, and it's the best money you can spend. If you are not prepared to pay that, then really you have got no chance.

[R8Steve]

Any system you have to pay for is generally a con.

I use -
Hargreaves lansdown for stocks
IG index for spread betting/CFD's (and is also excellent for live prices)

Any 'proven' systems/software that claims it will do all the work for you (at a cost of course) is best avoided.

[dodgydave]

stockopedia is a data service

[IntentionallyBlank]

Thanks for the responses.

That's good to know about Stockopedia, I'm sure it must cut the research time down quite a bit.

As for brokerages/firms... I already have an IG account for spread betting (mainly forex, indexes & options), but am holding back on live trading stocks for now - in favour of demo trading on Bullbearings.

I guess a much more succinct question to my initial one is: how do people go about selecting their stocks?

Whilst I'm not afraid of putting the hours in, I'm pretty certain there's a more efficient way than I'm currently aware of. Hence, the focus on filters/screens.

[twinturboz]

Are you thinking of trading full time as your sole income? If so are you sure CANSLIM is going to fit your timeframe.

[IntentionallyBlank]

It's early days, so I'm trying to keep my options open and explore as many different trading strategies as I can realistically focus on, CANSLIM was just one example out of many that I've been reading up on. I essentially have 2 years before I embark on a career change, so my intention is to do as much and as varied trading over that time to see what works best and suits my personality.

If I can build a pot large enough to trade for myself full-time then that would be something I would definitely consider; however, I'll be exploring all the options available to me a bit nearer the time (and when I'm more familiar with the industry).

I have a military/aviation background, so it's all pretty new and unfamiliar... albeit, the pressure, decision making, information processing, uncertainty, risk management, dedication, etc, are all things which I've become more than accustomed to over the past 13 years so I don't feel underequipped for the challenge!

[Ozzie Osmond]

IntentionallyBlank said:

I'm trying to keep my options open and explore as many different trading strategies...

You need to decide whether you are an "investor" - long term and relatively straightforward - or a "trader" - cut throat wheeling and dealing.

I've been an investor for years with some success but wouldn't have a clue where to start with a "trading strategy". My experience has been that, in general, if stuff sounds sexy it's because some charlatan is trying to relieve you of your hard-earned....

[IntentionallyBlank]

Ha... I had a feeling I might be pulled up for the use of the terms 'trading' v's 'investing'. From what I've read so far there seem to be two very distinct camps who don't exactly see eye to eye!

I take your point entirely, and have read quite a lot about both (I realise reading about it and successfully doing it are two very different things). The problem I face is that I naturally lack the patience for longer term investments... however, I do see the benefits. So what I intend to do is ensure I have a diverse portfolio (equities, ETFs, options/futures and forex) across different time frames, to not only spread the risk but also to acknowledge and play to my temperament.

[davepoth]

Ozzie Osmond said:

You need to decide whether you are an "investor" - long term and relatively straightforward - or a "trader" - cut throat wheeling and dealing.

I've been an investor for years with some success but wouldn't have a clue where to start with a "trading strategy". My experience has been that, in general, if stuff sounds sexy it's because some charlatan is trying to relieve you of your hard-earned....

Indeed. For every trader who has bought low and sold high there is a trader who has bought high and sold low.

[IntentionallyBlank]

davepoth said:

Indeed. For every trader who has bought low and sold high there is a trader who has bought high and sold low.

Therein lies the challenge...

[twinturboz]

Sound's like you've done the research so hopefully your not jumping in blind. Given the circumstances you've stated i.e. at the beginning you'll be trading part time and you don't have the patience for a long term strategy, a swing trading strategy might be best. Also with that in mind futures and forex might not be the best bet as they move a lot and will require a constant eye. I'd try and keep it simple, start with equities pick 5 leading stocks and see how you get on trading them. Once you've learned to trade them consistently, the same principles to some extent can be used for the other markets.

IntentionallyBlank said:

how do people go about selecting their stocks?

All comes down to timeframe and the strategy your going to use. Study the best traders/investors in the world and you'll see each has a different method, what one person says the other may say never to do. Personally I pick my stocks on technical patterns and price action. The name to some extent could even be irrelevant as long as the pattern looks good, that being said you don't want to mess about with small stocks that don't have liquidity, or that are susceptible to huge moves based on news.

If your going to trade, your not really tying to find the next big thing and make 100% plus, your aim is to consistently make money on a daily/weekly basis.

Practical advice I guess you want to first figure out your timeframe, then the obvious next step is figure out your trading style are you going to base your rules on fundamentals, technicals or try and mix both.
Risk control wise if you stick to the 1% rule that would be a good start. Identify your plan first then trade it, coming from a military background I guess that would be the easy part for you. Discipline and separating the emotions is probably one of the hardest things in trading.

Also soon as you can go live trading, paper trading just doesn't fully replicate a real trade, don't be surprised to lose your first or even second account you have to pay your way in the market and learn the lessons the hard way. It's far from the get rich quick idea some seem to have.

[lost in espace]

Why not look at sports trading, cannberry is a good one to google, or the Badger.

Or make some money from matched betting, profit maximiser is my preferred forum but you can start at moneysaving expert.

There are people on PM who do it full time.

[IntentionallyBlank]

twinturboz said:

All comes down to timeframe and the strategy your going to use. Study the best traders/investors in the world and you'll see each has a different method, what one person says the other may say never to do. Personally I pick my stocks on technical patterns and price action. The name to some extent could even be irrelevant as long as the pattern looks good, that being said you don't want to mess about with small stocks that don't have liquidity, or that are susceptible to huge moves based on news.

Thank you very much for your comments and the advice.

I've read Market Wizards, and definitely took away the message that there is no one strategy or style that works or is best... but hard work, preparation, and a bit more hard work, and sticking to your plan seems to pay off in the long run.

I've been day trading/scalping forex, the FTSE 100, and Brent Crude for the past couple of months on a demo account(I'm quite lucky in that I work shifts, so I get a decent amount of time off in between to focus on the charts), predominantly using technical analysis but acknowledging significant economic events and news stories - and have quickly worked my way through most of the mistakes novice traders make (that I've read about anyway)! So hopefully I've learnt my lessons there and won't be repeating them. Given my job, I'm very up-to-speed with regard to world affairs, I'm just having to learn what effect they have on the markets - but I'm getting there. I seem to find forex and country indexes much easier to understand fundamentally, given there are so few of them.

I've also had some success using options strategies to take advantage of volatility, or the lack thereof - for example, USD/JPY had been consolidating within very defined boundaries for a while, so I put on an iron condor over a 2 week period where there were only a few economic releases, and sure enough it stayed within the range so I won the trade, conversely GBP/USD had been very volatile so I put on a straddle and that also came up good.

With equities though, I've been overwhelmed by the choice, and whatever I've read about fundamentals seems to be contradicted elsewhere - as a very simple example, some people seem to use PE, whilst others say PE is irrelevant in favour of EPS... I like your advice on simply finding 5 which show movement but not necessarily volatility, and concentrating on trading them using the technicals. I had previously thought the game was finding the next big thing, so essentially you are constantly looking for new stocks, rather than trading in and out of familiar ones. The latter, as you said, makes a lot more sense to me!

[twinturboz]

P/e to be honest from practice it really is irrelevant until it isn't. By that I mean if you simply didn't want to trade a stock based on high P/E ratios you wouldn't trade half the stocks in the market. For example Nflx,Amzn,Tesla all have high P/E ratios and you would have missed the huge runs in those stocks if you went by that criteria alone. The general trend in this market seems to be the fundamentals are ignored until they finally become relevant, hence why I tend to concentrate on price action and the technicals.

Secondly again as a "trader" doesn't matter, your not going to be in the trade long enough and when valuation concerns do arise your system should get you out of the trade anyway.

Looking for the next big thing can work, again it's a different strategy, and if you can sit there and have the patience for the stock to start it's rise then all well and good. The problem arises when your doing this as your sole income, to a certain extent you don't have the luxury to sit and wait, by all means have one or two in your long term portfolio but really your looking for tactics that generate that weekly income.

As I'm sure your aware there's a plethora of trading books out there but I found these the most useful out of the ones I've read.

Trading in the zone - Mark Douglas ( more to do with phycology rather than trading strategies)

Technical analysis of the Financial markets - J Murphy

Come into my trading room & trading for a living - Dr Elder

How to achieve super performance in stocks - Mark Minervini ( his whole strategy is the next big thing. Similarities to CANSLIM a mix of fundamentals and technicals. however there is a great section in here that explains the cycles of a stock and the risk section is very good too.)

Edited by twinturboz on Sunday 27th March 11:23

[IntentionallyBlank]

twinturboz said:

As I'm sure your aware there's a plethora of trading books out there but I found these the most useful out of the ones I've read.

Trading in the zone - Mark Douglas ( more to do with phycology rather than trading strategies)

Technical analysis of the Financial markets - J Murphy

Come into my trading room & trading for a living - Dr Elder

How to achieve super performance in stocks - Mark Minervini ( his whole strategy is the next big thing. Similarities to CANSLIM a mix of fundamentals and technicals. however there is a great section in here that explains the cycles of a stock and the risk section is very good too.)

Edited by twinturboz on Sunday 27th March 11:23

Thanks again for all of this... I've already got Trading in the Zone lined up next on my bookshelf, and have read quite a lot about technical analysis, but I'll be sure to order the others. I'm currently reading Naked Forex by Alex Nekritin and Walter Peters - to up my candlestick knowledge.

Going back to equity fundamentals then, if you don't mind, short of going through the companies listed on the LSE one by one in detail - how would you go about finding UK companies with a large exposure to China for instance? I may be hoping for too much, but are there certain websites or publications which are go-to places for professional traders/investors to help them select/filter companies using less common criteria (as opposed to the usual Market Cap, PE, etc, filters)?

At the moment I'm tending to use TradingEconomics.com for all country data, the telegraph.co.uk/sectors/ for UK sectors (obviously!), a mix of IG Index, Investopedia, and Reuters for general research/sentiment/analysis, and either ADVFN or the telegraph stock screener as filters for equities. Any other suggestions would be much appreciated.

[IntentionallyBlank]

lost in espace said:

Why not look at sports trading, cannberry is a good one to google, or the Badger.

Or make some money from matched betting, profit maximiser is my preferred forum but you can start at moneysaving expert.

There are people on PM who do it full time.

Many thanks for the suggestion - unfortunately I've never really been a sports enthusiast, so I feel as I naturally follow current affairs it makes sense for me to trade in the financial markets as opposed to elsewhere... if & when I fail at this I'll bear it in mind however!