Ask Colin

I have approx $90 000 available for trading. How should I go about learning to trade?

You have enough to trade with, but more than enough to get yourself into trouble, unless you learn what you need to do before you start.

I suggest that you do some basic subjects with the Securities Institute of Australia. If you are a graduate, do the Graduate Diploma in Applied Finance and Investment. If you are not a Graduate, do the Open Entry course.

I think you need a good knowledge of both fundamental and technical analysis. The technical analysis subjects are in the Graduate Diploma, however, you can do them without being a graduate if you join the ATAA (a good idea anyway). Info on www.ataa.com.au

You need to start reading a book about the markets every month and the Australian Financial Review every day. Gradually you will develop an understanding for the financial markets. Specialist magazines like Shares will also help, but you probably do not need to spend heaps on newsletters at this stage.

Put most of your money in a safe place while you learn. Say a few balanced funds, but I am not able to advise you here - you need a licensed financial planner. If you must trade before you learn, do it with only a small part of your funds. Do not exceed that until you have at least a three-year record that beats the fund managers you have chosen for the rest of your funds.

The software that I use and recommend is Insight Trader. MetaStock is OK, but I prefer Insight Trader as set out on my web site www.bwts.com.au Ask Colin/Software.

Until you learn what you are doing, a full service broker may be best. However, once you are confident about your ability to make your own decisions, you could move to a discount broker.

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