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A good broker?


PaulT1

Question

Really very new at this game. Employed a broker (Share Express) but all that has happened in the last six weeks is that I have seen my $25,000 dwindle to less than $21,000. Is this normal share trading in the current environment?Appreciate some guidance. 

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4 answers to this question

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Hi 

 

Back when I started an eon ago it seems now I was introduced to IG CFDs by a broker.  They are a reputable broker but in the end I found that I couldn't get in touch with them when I needed to because they were focusing on their big clients first and their recommendations were no better than my own musings, even though I didn't know what I was really doing back then.

 

 is 100% correct.  If you don't really know how to trade then stop until you do.  There are many books available to get you started and you should 100% absolutely use a demo account for minimum 6 months before you try your hand in a live account.

 

You have to decide what kind of trader you want to be, what suits you best in terms of your psychology (it is hard to figure this out without actually trading but hence the demo account approach).

 

Types of traders (main ones at least):

  1. Day traders - taking intraday or short term (a couple of days) trades with very close stops and quick exit.  All sorts of short term technical points around price candle types etc are used but I am not the one to to talk to about this -  is more this type of trader I think.  Such traders typically use 5 mins or 15 mins charts but I have also heard some taking about 1 min and even tick.  Day traders will often seek specific data releases and trade volatility around these using Fundamentals principles (that certain macro economic trends drive the market)
  2. Swing traders - taking a much longer term view and seeking to trade using the so called 3 screen method (e.g. Weekly chart, daily, hourly).  This type of trader (me) seeks to analyse the big picture in detail using various combinations of technical analysis (typically ignoring fundamentals but not in all cases) and seeks high likelihood of success, low risk entry points and then trades the swings up and down on a major trend.
  3. Long term traders try to find major turning points and hold trades through the ebbs and flows on a major trend.  You can be both a swing trader and occasionally a long term trader at the same time but this type of trading is more akin to investing

There are several threads here on the IG forum covering trading psychology and comparing fundamentals vs technicals, which should give you some insight but in short here is what you should do in my opinion:

  1. Get some books and devour them cover to cover to find out as much as you can about trading (an old one but still a good intro is Trading for a Living by Dr Alexander Elder, a physiologist and inventor of the Elder Ray indicator.  This one covers many of the aspects of trading you will hear people referring to)
  2. Figure out your psychology (i.e. the things you need to control about yourself) and decide what kind of trader you want to be
  3. Find a method that suits you, that you fully understand and master it sing a demo account
  4. Find an execution only broker like IG, you have to do your own analysis and make your own trades
  5. Keep a diary containing the logic behind your trades and assess what worked and what didn't - be honest with yourself
  6. Check out the web for the massive number of sites and blogs available but don't follow any advice out the window (including mine!)
  7. Don't be afraid to participate in a forum such as this, making public mistakes is a great way of learning and getting input, sometimes trollish but that's people for ya, grow a think skin.

Good luck.

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BTW, I think  was referring to your situation rather than the losses when he said it was not normal.  It is entirely normal for first timers to lose heavily if they have not taken the time to learn.  even then expect losses to begin with until you have mastered live trading, very different from demo

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Good posts  & .

 

I remember I first tried IG many years ago. Lost. Lesson learnt - I didn't have the knowledge to do it.

 

There is some good advice on the Demo account.

 

Personally, I wouldn't be trusting a broker and would at best use them as a source of data or confirmation.

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