Forum Archive Index - September 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Holden,

> 
>-- are there any major concerns people have with investing
>into US markets versus NZ or AU? From glancing over some stocks I
>have noticed that they tend to have larger high/low ranges for the
>day but that would be attributed to the increased activity in the
>market, wouldn't it? Which for a short term end of day trader this
>would be a more suited market to dabble with, no?
> 
>Thanks in advance for correcting any false assumptions I may make :)
> 
>

You know that room in your house that you get to by going through 
the front door?   The really big one with the blue ceiling with the 
big yellow light that moves around at roof level?  Well if you start 
day trading in the US, you may not have time to go in there for a 
while....

Perhaps you might want to read the trading section of the aus.invest 
FAQ

http://www.travismorien.com/FAQ/main.htm

then select 'trading' from the top RH corner.

Here is a short extract to whet your appetite:

----------------

Trading has a surprising amount in common with combat.  To become a 
veteran you must first survive your first week of battle, and 
casualty statistics tend to show that green troops are far more 
likely to die than veterans. You need to learn trading survival 
before you will learn to profit by it. 

I am firmly convinced that most amateurs prefer technical analysis 
because it is easy to use, especially compared with the detailed 
analysis of company accounts and business economics needed to achieve 
good results from fundamental analysis. It takes days or weeks of 
hard work to decide based on a thorough fundamental analysis if a 
stock is worth buying or not, but a chartist can buy based on a quick 
glance at the trend.

Of course professional traders are as far above the amateur 
speculators as the professional investor is above the guy that buys a 
stock just because he thinks the price/earnings ratio is attractive. 
Professional hedge fund managers do not dabble in speculative penny 
stocks drawing funny lines and boxes on a chart, they use advanced 
knowledge of money management and risk management as well as 
sophisticated quantitative techniques. It wasn't my intention to 
produce a FAQ on advanced hedge fund trading techniques, but perhaps 
to produce something that bridges that gap and gives you information 
somewhere in between the chartist and the professional trader.

I have based some of what I have written on talks with traders that I 
know, and they say I'm on the right track. If any reader has material 
to add to this FAQ, or constructive criticism, I'm all ears. 


------------------


SNOOPY

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