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Beginner starting out with small budget


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Hi there

I am fairly new to stock trading and have played around on coinbase with bitcoin and there I was able to invest my starting budget of £100-200 however now on IG I can see I am unable to buy stocks of larger companies as the minimum per point is 0.5 :( does this mean I can only invest in stocks which have a lower price eg ether and barclays and not the larger ones such as tesla/amazon etc. 

I though as a beginner I could start out with only a small sum/budget and was wondering if the only way to buy stocks of the larger companies is to have a much larger budget/portfolio.

I have started on IG demo for now with virtual money (reduced it from 10,000 to 1,000), however when I want to switch to my actual budget (100-200) will I be quite limited?

Any help would be much appreciated! Thank you.

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1 hour ago, wildiroam said:

Any help would be much appreciated! Thank you.

Hi, yes you are correct in that the regulator has deemed that retail traders must be protected from themselves and so a hefty margin is now required to enter trades. As the price of the asset is incorporated into the margin calculation you will find that a small account will mean the more costly assets such as the big US stocks will be out of reach and so you need to look instead at cheaper UK stocks or even the ftse indices.

Check also the differences between investing and trading and define just what it is you wish to practice as the goals of the two are very different.

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3 hours ago, Caseynotes said:

Hi, yes you are correct in that the regulator has deemed that retail traders must be protected from themselves and so a hefty margin is now required to enter trades. As the price of the asset is incorporated into the margin calculation you will find that a small account will mean the more costly assets such as the big US stocks will be out of reach and so you need to look instead at cheaper UK stocks or even the ftse indices.

Check also the differences between investing and trading and define just what it is you wish to practice as the goals of the two are very different.

Hi Caseynotes,

Thank you very much for your reply I really appreciate you taking your time to help answer my question.

Sorry for not using correct terminology, I am still learning. I am looking into day trading.

I will continue to play around with the virtual £1,000 and see how it is goes before starting to use my own money. 

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It's an AIM share that is traded in low volumes, probably for good reason. Low revenue company with high debt. No doubt they are on the verge on producing the next 'big thing'. Probably a cure for the coronavid snuffle. I'm no day trader, but if I were, it wouldn't be my first choice, or probably my millionth choice either for that matter.

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12 hours ago, wildiroam said:

Hi Caseynotes,

Thank you very much for your reply I really appreciate you taking your time to help answer my question.

Sorry for not using correct terminology, I am still learning. I am looking into day trading.

I will continue to play around with the virtual £1,000 and see how it is goes before starting to use my own money. 

yes, the key is to learn how to trade first and then consider which markets to specialise in and so you should look for more liquid markets rather than the chart above, something more general like the FTSE. 

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QUESTION: I AM ASKING IF I HAVE BROUGHT SHARES ON NASDAQ PRIOR TO MARKET OPENING (11:30PM) AND OPEN PRICE $3.00. MY WORKING ORDER/RESERVE BUY $3.40..... CURRENT MARKET ATM IS $5, WILL MY WORKING ORDER BE ACCEPTED WHEN WALL STREET OPENS????

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QUESTION: I AM ASKING IF I HAVE BROUGHT SHARES ON NASDAQ PRIOR TO MARKET OPENING (11:30PM) AND OPEN PRICE $3.00. MY WORKING ORDER/RESERVE BUY $3.40..... CURRENT MARKET ATM IS $5, WILL MY WORKING ORDER BE ACCEPTED WHEN WALL STREET OPENS????

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21 minutes ago, wildiroam said:

Thank you both for your helpful replies.

I am sorry to bother, I have looked up FTSE on investopedia and read the description, however I am still a but stumped on why you are suggesting I look into FTSE. Does this mean look at markets listed in this list; http://www.stockchallenge.co.uk/ftse.php

and find markets which are a low enough price for me to trade? 

 

 

 

no bother, was just suggesting that rather than look at a single stock instead consider practicing on the market as a whole, much more liquid, relatively cheap for a small account size and usually has a reasonable amount of movement on a day by day basis.

In the example below a £1/point long position would mean a risk of £40 for a reward of £75 and you would need to hold £300 in your account to cover the trade. As you can see by the H1 chart that amount of movement short term is not unusual.

image.thumb.png.989773ba8e2b788abe63a66d012ecb64.png

 

Edited by Caseynotes
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There are a limited amount of stocks available to trade with IG, however they do exist.  for instance (assuming you mean to Spread Bet).

Lloyds

Sig plc

HYVE

Velocys Plc.  I have traded these recently with as little as £5 margin.

Edited by nit2wynit
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On 19/05/2020 at 12:11, wildiroam said:

Hi there

I am fairly new to stock trading and have played around on coinbase with bitcoin and there I was able to invest my starting budget of £100-200 however now on IG I can see I am unable to buy stocks of larger companies as the minimum per point is 0.5 :( does this mean I can only invest in stocks which have a lower price eg ether and barclays and not the larger ones such as tesla/amazon etc. 

I though as a beginner I could start out with only a small sum/budget and was wondering if the only way to buy stocks of the larger companies is to have a much larger budget/portfolio.

I have started on IG demo for now with virtual money (reduced it from 10,000 to 1,000), however when I want to switch to my actual budget (100-200) will I be quite limited?

Any help would be much appreciated! Thank you.

You should have 2 blue ish buttons at the very top of your web trading app. One of the is Manage Funds. Use it to reduce your equity.

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Guest Knowledge First

Based on some of the questions you are asking here wildiroam, I would suggest not trading at all right now with real money. You are missing some fundamental knowledge that is required if you want to earn anything from this.

Think of it that you are up against 1000's of other folks around the world who all want to be the next million dollar trader, you need to arm yourself to do so. Some of your questions are fundamental things that I had to learn before trading. I would suggest using the IG Training before even playing with the demo account. Then you can start putting into practise what you have learnt.

https://www.ig.com/uk/learn-to-trade/ig-academy

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