It is Saturday ... phew ... a rare Saturday that I do not have anything on(or I shall say, I want to rest ... pushing everything aside) ... and have TIME by myself, planning and thinking of re-creating my work-space, at home!!

I have been asked many of times by newbies/novices ... how do we actually start to trade in stock-markets or any other financial markets?

Understanding RISK is the most important pointer I could say.

Example : We heard of those trading in forex or highly leveraged financial instruments(futures, options, warrants etc etc) which carried VERY HIGH risk to the newbies. Hey, if we are totally new to trading, we do to drive fast-cars, right? So, we shall choose LOWER RISK instruments to trade, right? Well ... sounds logical BUT unfortunately, so many newbies started in wrong-footing, enticed by those so-called GET-RICH-QUICK programs which shown us how many HUNDREDS percent they gained ... using their systems.

THINK ... do use BRAIN. Is that really THAT simple?

Forex is one very risky trading ... yet, being well-promoted by many Sporeans forex-trading schools ... trying to LURE many greedy get-rich-quick Malaysians ... into their sure-win trading system. I have attended 3-4 such seminars ... each time, I came out with a cynical smile. Hmm ... still, there are some signed up? RM8k ? RM12k? wow ... Malaysians are THAT greedy?

I do believe it is their marketing strtegies too ... that they have their 'own' people pretending to register for the courses ... making it looks like REAL, and some un-aware greedy ones might be tempted to spend their RM8k for the sure win systems ... after all, many are registering too ... it can't be so wrong, right? Some guaranteed to train you till you 'succeeded'. Hmm ... too good to be true? Then, it is not true?

Anyway ... BASIC common-sense is needed to stay sane in markets.

So, we should start with the simplest possible : KLSE's blue chips. Trade those blue chips with good fundamentals. You can't get too wrong. Try out some of your readings/findings ... and personalised our own systems, to suit our risk appetite, our capitals ... our knowledge/experiences ...

What is blue chip? Err ... well, those 30 index-linked counters. If you do not know about them, ask around ... counters like GenM, Genting, UEMS, IHH ... etc etc ... UMW which I recently traded. Not all the 30-KLCI-linked counters are good fundamentally, but it is suffice to say ... they are OK. You won't lose our money buying into Astro or FGV, eventho I dislike both. Haha ... MISC ... another counter where u see her in the list, then you don't. MAS used to be in the 30-KLCI counters ... I still prefer the 100-counters to the new 30-counters where they could easier to manipulate the index(KLCI). Of coz we all knew about that ... but for newbies, it is too much to grasp. Take your TIME ...

Learn to know these top 30-counters ... BUY the lousy 'The Star' paper on Mondays to get a list of top-100 counters, with their market cap(no of share issues x stock price) in order. Learn to know WHICH ONE is good ... and which is a no-no to touch. Start from here. Learn FA = fundamental analysis. NOTHING ELSE at newbie level. NEVER bother to ask if Silver is a good bird or XOX could give us the XO ... or Tiger will be giving us a show? It is waste of such precious time even talking about such ... how are we going to know if Smartag is smart enough to invest into? Ask something like ... YTL ... will they becoming a dividend counters and what is the indication of YTLPower heavy share-buyback for? Learn about what YTL-group is all about ... start from here!!

Learn to ask GOOD questions ... be realistic. Many in markets will be reluctant to share their knowledge(for free) and listen to LESS people. Trying to avoid noise forums is a logical move for newbies. You will be emotionally 'trapped' by many so-called sifus there ... and get confused.

Learn to do your own research. Do not buy anything if you do not know what is it about. And even if you knew about the counters ... such as Astro or so, do not jump into to buy into them. LEARN to check their fundamentals. There are schools of fundamental analysis, but honestly ... FA itself is NOT GOOD enough. At least we won't be trap silly inside Sersol or stupid Harvest ... or KBunai which is karam-ing. Heck, we still wonder if the price of gold-silver to recover further ... will that helps Silver to get out of PN17?

What is PN17? Don't know about it? Search www.bursamalaysia.com ... ask around ... and it just means DO NOT TOUCH such counters. Get me? First of all, you are a newbie-novice ... PN17 basically means NOT GOOD. So, not for newbies.

PN = Practice Note. Some in GN3. Heck, what is that now? Never mind ... I can't be bother abut those counters, anyway. How about Mesdaq-coounters ... known as ACE-market now? Hmm .. not all are bad, but these small-cap counters are at best to be avoided by newbies. Just listen la ... avoid.


http://www.bursamalaysia.com/market/listed-companies/list-of-companies/ace-market/

At the moment, many penny-stocks in ACE are in play ... Inari ran so high up, it doesn't make sense. One may buy The Star(Saturday) for the weekly reports on stocks, including ACE-counters.

Have you heard of people said "Do not go into stock-markets, you will lose all you money?". Silly ... you do not lose all your money ... unless the company you bought(yes, buying shares in markets is buying a piece of their biz) going bankrupt or delisted. Well .. stick to blue-chips, you will NOT lose all your money. That is pure-fear without senses.

But recently, have you read about the three listed companies in SGX(Singapore Stock Exchange) which tanked? MANY investors lost or losing lots of money ... that is ouch. Know why blue-chips still the best for newbies?

Once you have checked on BURSA for the counters ... do download some charts. Do not bother to pay another few thousands RM4-6k for those trading courses, claiming that they will teach you all the sure-win technical-charting. You may pay me 10-20% of that amount, I wont mind teaching you my ah-pek common sense ways of checking charts. It is all about FUNDAMENTALS ... not those charts la. Get it?

Next good resource to learn is BOOKS : Get some good local written books. Those stock-market books titles could be VERY misleading ... such as How to be millionaire or gain huge money from stock-markets(haha ... marketing gimmicks la) ... but they are good references for newbies-novices. I am no promoter to any publishers or authors. Recently, I saw my 'interview' being placed in Alan Tan's latest book ... "How to make money in market". I went through some of the contents, it is good enough book for newbies-novices. I do like Pauline's books too ... Adam's "Winning the game of stocks" is a very good book, tho I did not read much in details(most of things mentioned inside are just revisions for me ... but those are valuable reminders!!)

MINDSET books are equally important. Start from here ... build good fundamental in our brain. Have a strong persistent, determination, dedication ... to our learn. NEVER give-up attitudes are needed, even if we are not performing after some time. Giving up is one of the worst steps anyone could take ... but trading is NOT for most of people. So, if one is not a hard-working person, with wrong mindset ... do QUIT in earlier stage. That could reduce the pain ... of learning ... of losing ...

Summary

1. Get to know the fundamentals of companies : Check their websites, learn to read the annual-reports, quarter-reports, businesses ... and draw a strong clear line about counters we should NOT touch(example losing money counters or highly geared companies)

2. Download some charting softwares(need NOT to subscribe). It is free.

3. Listen to those logical and helpful, experienced investors-traders. Do not listen to forums or join too many of those facebook's forum groups. Noises is NOT what we want if we need to focus, to learn.

4. Buy some good trading-investing books. Jot down what you have learnt, ASK those who willing to answer your questions ... search for the more thru google.com ... investopedia.com and more.

5. Join my group(haha) ... and learn more about trading-investing. Learn by asking questions, being with those who are serious in their learning to trade well and being supportive.

Will write about ... part II, if I have the time.

Have a nice weekend

TEH (cpteh@yahoo.com)