Hi
I’m feeling rather overwelmed by what are to me a very new ideas and I wonder if anyone could please explain how Trading 212 and ‘investing’ compares to Forex trading?
I have stumbled across Trading 212 while trying to learn about Betfair Trading and Bollinger Bands. The video from Trading 212 were one of the easiest to understand. However in trying to learn more about Betfair Trading I found comments saying Forex Trading was easier to learn and worked better with stops. From the Betfair Trading I have a basic idea of what of a stop is.
My health is preventing me from working at the moment and I would like to learn how to eventually make a small income from home that I can do when I feel up to it. Is Trading 212 a way to achieve this? I should perhaps add that I would want to start learning with a small amount, say less £50 and be fairly sure of not losing that in one go.
Thank you to anyone who takes the time to reply.
Pete
Pete. I implore you not to do this. Any of it. It’s not what it is made out to be, you have been misled. You will lose your money and be in a worse situation.
Try matched betting, bank switching or something for a little income. This is not the avenue to play with money.
I think that there are multiple levels to your question so maybe you might need to refine some aspects of it as you go along.
In your question you are asking about fx v stock trading, refer to charts (bollinger bands) and the T212 platform. You also refer to Betfair. I’ve never used Betfair and never even looked at it but for me the name gives it away - its betting. Yes all share trading is essentially betting. However, I guess betfair is coming at this essentially from a betting perspective.
In terms of share trading there are lots of platforms and brokers out there. However, T212 has several important advantages and benefits - trading is free (aside from fx fees and stamp duty), it is a very good platform and nice clean user interface, the chart tool is pretty good (much better than some big brokers) and its pretty intuitive and easy to user for a beginner. Certainly from a charting perspective there are some powerful charting tools out there but they have a much steeper learning curve (imo). So as a platform I would highly recomend T212 especially for a beginner. Yes there may be lots of enhancements on the wishlist but it is already a great platform with good charting tool and a nice interface.
I don’t trade fx. You are basically betting on small movements in exchange rate. Its a specialist area of trading and I would be very cautious.
In terms of trading stock there is a lot of good information on the internet about charting but learning how to read charts takes a lot of time to learn. In share trading some people will invest on fundamentals, some on charts, some on a combination of charts and fundamentals and others just follow bulletin boards looking for hot stock…
If you have health problems that trading can give you something to focus on and do with your time and if you spend the time to learn (perhaps have a practice account that doesn’t use real money to learn for a couple of months and see what works for you) then you might make a little income to help you. However, beware that trading can also be highly stressful. There is nothing like opening a big position to find that it has gapped down the next morning.
Thank you that’s really useful. I do agree that there are multiple levels to my question.
From what you have said Forex trading sounds similar to Betfair Trading but with more liquidity. I’m thinking the difference is that with Betfair everything happens very quickly around 10 minutes before a race. It seems though a lot depends on seeing the horses in those last few minutes as the people at the track can see something they do or don’t like and drastically reverse trends in 30 seconds. I’ve seen some talk of using Bollinger Bands and RSI as indicators, but I’ve yet to see anyone clearly explain how because most of the time it all happens so quickly. I guess this could be different on very high liquidity markets. Races also happen in the afternoons where I find it hard to concentrate, I’m much better early in the mornings.
Going back to my initial question; I think for learning something that gives me daily feedback would be good. I want to start with a small amount, say £40 and see if I can learn and make that grow. Is it realistic to then aim of say making £100 per week after a few months? Do you think Stocks are the place to start my learning journey?
Don’t go listening to youtubers.
If they really make what they claim they wouldn’t need to sell courses or even have a youtube channel in the first place, they wouldn’t need to.
Your comment reads as if you are simply looking to gamble and want to find an alternative to betting on horse racing. I strongly urge you not to especially if you go to leveraged or binary products because you are likely to lose everything.
You ask if you could make £100 per week. That’s £5000 a year and at 5% return that means you are investing £100,000. Are you considering investing £100,000?
Do not start fx gambling/trading as an alternative to horse racing.
You say that you feel that horse race betting there are variables you can’t measure/assess (ie the condition of the horse 10 minutes before the race or if something happens to affect the horse). There are even more variables that you have no idea about if you are trying to day trade stock or fx.
You appear to have ignored my suggestion of open a test account that will allow you to trade with imaginary money as a trial. Trying to start with £40 real money is a bad idea not least because good stock investing relies on having some diversity and risk management and that’s not possible with £40. Thus open a trial account with imaginary/virtual money (say £1000) and after 3 months see what you’ve learnt.
You mention bollinger bands and rsi. Chart analysis is a significant part of my own investing but it took me a very long time to develop my chart analysis. There are many indicators and no one indicator will give you anything like a clear set of signals. Also many indicators including bollinger and rsi are lagging meaning they are reflecting the past. If there was a magic indicator that reliably told you when to buy and sell then everyone would be millionaires. You seem to be looking for a quick betting fix to replace horse race betting and I strongly urge you not to.
That said I am happy to try to answer any questions.
Sorry it came across like that WakeMeUp. I have taken your advice and opened an account and I’m now looking for resources to understand how to begin learning to use it.
Regarding Betfair I think maybe our interpretation of words is different, I don’t see it as betting as I get the same profit (or loss if done badly) no matter which horse wins. I have often made my small profit (or loss if I have messed up) before the race has even started. Sometimes 4 hours before on a swing trade. So the ‘bet’ is whether I can understand how the odds will go and take the appropriate actions. I can place stop losses etc to minimise loss.
I appreciate what you say about the factors that influence other money markets being more complex.
I’d like to thank everyone else for their input to.
Hi Pete. I hope my comments did not come across as negative because they were not intended that way. I have gone through very serious health problems myself and I would hate for someone to end up in a worse position because of some decisions made in haste.
I understand what you mean about the “bets”. I remember placing a bet on whether the UK would get the 2012 Olympics and closed the bet a day or two beforehand at a good profit rather than take the risk of waiting.
As I’ve said, I have never traded fx but have the impression that it is fairly risky because you are betting on very small changes in the exchange rate but I imagine that there are trends to the exchange rate so at times the risks will be lower. Also I never use stop losses because in stocks I have seen the market drop the price before a big up movement or vice versa (I’ve seen it today). Even if I am trading I will trade on stock that I am happy to hold so don’t want a loss crystalised by a stop loss when I’m happy to hold it and perhaps even buy lower but if that doesn’t mean I want sell to avoid further drops if I think that’s possible.
I think chart analysis for shares is very powerful but it will never give you a 100% guaranteed signal to buy/sell. It also takes time to really learn. Investopedia (.com) has some good reference information (I don’t know what its like for tutorials). Be cautious about youtube type stuff and information that clearly is someone with an ego or an agenda (or both). To be honest, the most important chart analysis is understanding trend lines, support/resistance levels and candlesticks. If you can identify channels, SR levels and analyse candlesticks that is a good start (and will take time - reading the book is only the start, practice is what is important). I use fairly complex script based indicators but a standard indicator that I like is the slow stochastic alongside analysis of the chart itself and moving averages (usually more complex moving averages). However, fundamental is understand the companies and trying to do some research on the fundamentals. The chart can look fantastic one day but if you haven’t researched the company you can think the chart looks great but the price plummets the next day because of a weakness in the fundamentals that doing some research would have revealed.
I’m unclear whether you are looking to do this as a pastime, to help fill the hours, as a possible serious investment or an experiment… whatever the reason good luck, take your time, I do urge you to use a practice account for a couple of months and then be cautious… Good luck and may the bets be always in your favour
Thank you WakeMeUp. Sorry to hear you have had health problems too.
At the moment I guess it is an experiment to find out if it can be more. As you say there is plenty of advice on youtube, but anyone can make a video and as you say there is normally an agenda of some sort there. I found Trading212 through a Youtube video though, so not all bad. I’m finding some of Greg Secker’s video’s informative, but still have a long way to go before I actually even try something on the practice mode!
Take your time, don’t buy into get rich quick schemes. And do not underestimate the difficulty of making average returns when trading over months and years. Let alone trading better than average.
Just to give you some perspective:
Around 90% of all hedge fund managers cannot even beat the S&P 500. And these are professionals dedicating much time and having ‘excellent’ research teams and analysts at their disposal.
I do not say that to discourage you, just to help you on your journey.
To add to this, be wary of penny stocks. So many beginner investors, including myself, thought “ooh, the penny stocks just need to grow to make you a massive profit” with the likes of Amazon or Apple in mind but the trouble is they often go down and some become bankrupt and there is no way to really know which one is going to be the next Amazon and which ones will be the next failures.
To OP:
I personally like dividend stocks. Even if you later want to primarily be a growth investor in the future, what I like about dividend stocks is that you still get an income with many of them even when the stock market is going down so you don’t end up in total despair. Reliable ones like Legal and General spring to mind. However, companies can also cut dividends so you can try investing in Investment Trusts to get more diversification and also rely more on the income since they build up reserves in good times to still be able to pay out during the bad.
If you want to learn more about investing before plunging in, I think the YouTuber The Swedish Investor is one of the absolute best, I’ve learned so much from him. He tends to analyse books but you will really learn much about things like reading financial statements and Warren Buffet’s investing strategies from him.
I can’t comment on gambling or forex as I don’t understand the terrain, however there’s opportunity for everyone to make a killing in the stock market by doing basic things.
Invest in companies/industry you understand very well, an average person would have worked for at least 3 or more companies/industries throughout their life span – that’s a wealth of knowledge that most of these desktop analysts haven’t got a clue.
Personally am not a fan of index investing as most are market cap weighted, the idea that £1 invested in a world index – 60% of that goes to the US mostly the mega caps doesn’t sit right with me.
