how to trade stocks

[moira]

Hi,
I am a total noob on investment and this way I just want to find out about the basics as much as possible.
How do you trade stocks and stuff (fonds etc?) - I think you need a depot, what's a desireable place to get one (I think you need to pay money to trade stocks? So what are the criteria to choose a depot?)? Are there any good internet sites that teach you basics and keep you informed about what's happening? Which do you recommend? And so on...
I am sure those questions appeal stupid to most of you, but you gotta start somehow and I am thankful for any advice. Please keep in mind that I am from europe if that matters (for opening a depot etc.).
Thanks a lot, David

[Colt McCoy]

Try the Finance & Investing Forum

[gull]

I don't know how it works in Berlin.

Here in the US, there are two main ways to invest in stocks. You can get an account at a brokerage and then put in orders to buy or sell stocks or ETFs or whatever. The second way is to make an account at a stock fund company and then invest in that company's funds.

Good job for not being afraid to ask questions and get a plan for your finances.

[APXG]

I would recommend starting out with a few companies/industries that interest you and make a watchlist of sorts on Yahoo/Google. As you read news, reports, other info every day, add stocks to the watchlist that again catch you eye. Then, after at least a week, buy/short one of the stocks in a fake portfolio (I wouldn't get caught up with fantasy competitions b.c you are not actually trying to compete). Spend time on this every day, follow the stocks everyday like you have 10k invested in each of them. Slowly build the fake portfolio, and every week evaluate your previous week's decisions and formulate a rough plan for the next week. Keep record of some/most of your analysis - especially weekly - either in Word if you like writing, or make a desktop video with Camstudio-type program. Review these whenever you feel lazy / lacking attention. They act as a defragging/reboot tool for your brain. Don't get discouraged if you are losing money while trying new strategies - the key is that you are generating them.

This system will tell you if your IQ is high enough / compatible to success in trading / investing. There are many other components such as handling real-time pressure with significant $$ on the line, but this tests the IQ / idea generation / discipline. If you don't have them, I would not recommend wasting your real money in a brokerage account.

When your fake portfolio is posting sick returns, put in whatever amount of money you would not be upset at losing into a real brokerage and apply your strategies. The key is that the amount is not huge to you to lose. If you are down a significant amount / lose confidence / encounter something very different that you've never seen in the fake portfolio sessions, liquidate positions and go back. Repeat, etc.

Note: My advice is only applicable if you are already very good at poker. This system requires MORE discipline and BETTER bankroll management than poker. I would advise running it simultaneously to poker if time allows to at least have some background in trading as an exit strategy in case poker is attacked / irreparably damaged by a nuclear assault and somehow ceases to exist.

[moira]

Thank you very much, especially APXG - this is great advice. Is there a website where you can overview the market and add certain stocks to be watched or something like that?