Ask Colin

I am keen to get started trading. I prefer technical analysis because I don't have the time to sift through company reports etc. I am paper trading. What are the best sources of education - mainly free as I have no money now?

You raised several issues:

1. Please do not start trading until you have some education. Trading is not easy and most people fail, because they do not know what they are doing. Trading is about assuming risk to make profits. You must know how to control risk, or you will not make profits except by accident.

2. You are coming to technical analysis with the wrong idea. It is definitely not an easy way to avoid fundamental analysis. In fact this is a very common mistake. You must know something about what you are trading. All stocks are not the same. The risk varies enormously from one to another. The best traders and investors use both fundamental and technical together.

3. Paper trading seems to be all you should be doing for the next three to five years while you do the courses and read the books.

4. There is already a lot of advice about courses on technical analysis and on trading on my web site in the Ask Colin section. In my opinion, the best education for technical analysis is to do the subjects FIN231 Technical Analysis (previously E114) and Short Course 9063 Specialised Techniques in Technical Analysis (previously E171). These are offered by Kaplan, who bought the training business from SIA/FINSIA. The E114 subject notes are on the paid website as Technical Analysis Articles, because I wrote E114 and it is my copyright work.

5. If you do not have the money to pay for the education, you do not have enough money to trade. Do not even think about trading short of having $50,000 capital. As low as $20,000 is possible, but highly risky and I do not advise it.

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