One way to
overcome this problem when trading for real is to buy share with
high volatility. Those are generally your more expensive share
but at least you will know that you can rid of it quickly if you
want to sell it.
This is probably
one of the biggest downfalls of share trading compared to forex
trading. You can buy shares at any time while the market is
open. There are normally some sellers trying to get rid of their
shares. The problem comes when you try to sell your shares. Especially
if you trade in cheap shares in smaller companies. It can happen
that you can battle for three or four months to get a buyer for
your shares. In the dummy it looks easy. You buy low and sell
high. In real life it is not that easy; You buy low and if you
can get a buyer, you sell high.
next time somebody markets their technical analyses or online share
trading software make a point to ask them about this situation.
If you can buy and sell immediately in your dummy account, you might
think that you make a good profit and that you are ready to go live
and trade with real money. The first time when you want to sell
your shares and there is no buyer for it, you will realize what
I talked about.
advice I can offer is to subscribe to a free trial. But also subscribe
to an advisory service like PSG's
Stock Picker (click here for details) . That way you can measure
your predictions against that of the professionals.
you buy share tracking software, rather subscribe for Standard
Bank's free trial on their trading platform web site. You will
find most of the indicators you need in there. You can also have
a look at PSG's
WEN System. Although the share
tracking software seller want you to believe that they sell
a unique system, you can get the same for much less if you shop
around. My advice is to try one of these services first. They will
not require you to buy the software at a ridiculous amount, you
will only pay a small monthly fee. Then if you see that your are
destined to be a share trader, only then spend the R14,000 for software,
if they can offer you anything better.
you start trading you MUST READ "The
Warren Buffet Way" by Robert Hagstrom. In the book you
will learn what type of shares the (once) richest man in the world
prefered and why. Get it at http://www.businessbooks.co.za/warren-buffet/index.php
It is a good thing to add some small upcoming companies to your
portfolio. These companies do offer a higher risk than well known
established companies. But the rule of thumb is "The greater
the risk, the greater the possible profit".
advantage of small companies is that you can buy shares at low prices,
even 10c per share. If this stock price rises to 20c per share,
you gained 100% profit. If you invest in a big company like Anglo
Gold, you might pay about R335.00 per share. Do you think the Anglo
price can just jump up and give you a 100% gain on your investment?
It is not very likely.