The RUVDS blog on Habré has seen everything: the popularization of JavaScript and cool translated materials, yachting, education and professional development issues, burgers, cheeses, beer and calendars with cybergirls. The idea to talk about the basics of trading and working on the stock market has been on our minds for a long time, and here's why. Most stock writing companies have a clear goal: to get customers for their instruments and brokerage accounts, which means that in their articles, investing is an extremely attractive activity that should be the hobby of every geek. The only thing we can offer beginner traders is a VPS with trading platforms, and we have no motive to present the world of trading in the stock market as a means to get rich.
We decided to make a series of articles about the basics of trading and the most popular assets for beginners. Honestly, without appeals, carry money to a broker or open your account in a particular bank. Well, it is up to you to decide whether this is your path or not. Sometimes it is much more profitable and even faster to master a new development stack and upgrade your salary and stable income to the level you need.
How much money should a novice investor have and where to get it?
There is no set amount. Among brokers, you can hear the amount from 100 rubles, but it is clear that this is a story for the passive behavior of the novice investor himself (that is, if you entrust capital management to a broker and do not make decisions on transactions yourself). If you decide to try to make money on your own, then you can take the following minimums as a basis:
- "Standard" minimum - 10 rubles
- IIS (individual investment account) - up to 400 rubles. in year
- for the purchase of domestic blue chips - 10 rubles.
- for the purchase of foreign products - highly dependent on the selected assets
But, I repeat, these are conditional amounts: you can choose your own, sometimes the minimum amount of funds on the account is regulated by the broker you will be served by.
The main thing is to determine the important parameters of the funds that you are ready to invest.
- At the beginning of your investment practice, do not invest the latter, you must have a reserve of cash. One of my best practices is to save 10% of any income (left, right, bonuses and bonuses - that's all, even gifts). If there is no purpose of saving for something important, some of this money can be used in trading on the stock market.
- Do not take a loan for investments (an exception is leverage, a special leverage from a broker) - you can lose borrowed money, and not increase it. And if it’s a shame to lose your own, then strangers are also scary.
- Be prepared to “release” your funds for a period of about 3 years - sometimes this is due to the return of personal income tax, sometimes with the formation of a long-term low-risk portfolio, etc. Well, plus, you definitely will not immediately find the most advantageous strategy for you.
How to enter the auction on the stock exchange?
Directly - no way. In the Russian Federation, individuals do not have the right to make independent investments in the stock market. To access the Moscow Exchange and other sites, you need to conclude a contract for brokerage services and open a brokerage account. After that, you can entrust the management of your money to a professional participant in the stock market (large amounts) or start making transactions on your own (if the amounts are small).
- Working directly with a broker - you conclude a contract, install trading platforms and start experimenting based on your knowledge or (which is not bad, but risky) on discussions on the forums of professional traders and amateur traders. This is the best option for beginners.
- QUIK is a set of tools for analysis and trading with extremely fast data updates. You can trade on Russian and foreign stock markets. Secure due to data encryption.
- MetaTrader5 is a program for trading derivatives, currency and stock market instruments. Allows you to create custom reports and trading algorithms in the MQL5 programming language.
- Working in the mobile application of a broker or bank is a very light version for a novice investor, in which all the attributes of trading are available (news, analytics, retrospectives, tips, portfolios, ready-made strategies, etc.), but at the same time you do not immerse yourself in the most interesting and complex investment details.
- Using ready-made trading strategies is a tool for investors who are not interested in developing, they just need to invest money for future growth. You invest in a ready-made portfolio strategy and just wait for it to work and you close in the black (as a rule, they always have a positive result, albeit often a small one). Despite the linear simplicity of choice, you should not turn away from this way of investing: having “opened” your portfolio, you can study the principles of portfolio formation, the combination of products and risks, and the analytics that underlie the strategy.
- Starting to fiercely program and write your trading robots for high-frequency trading is an option for Khabrovites strong in code. However, this is not the best way for real work, since sites sometimes look for ways to counter this approach, robots are attacked by intruders. However, writing your own trading robot means understanding the most subtle nuances of the stock and currency markets, this can be your step towards a new profession or in the work of a team of brokers and banks.
How to Trade?
There are many strategies for trading in the stock market (trading), but not all of them are suitable for beginners. Let's take a look at the main ones.
Scalping is a popular type of trading in which a trader makes a profit from any price movement. This is work on short timeframes (sometimes even 5 minutes or a minute). Suitable for those for whom trading is their main job (profession), it requires concentration and attention to detail.
Fundamental trading — a type of trading in which a trader trades in the medium term using fundamental analysis. He analyzes and predicts the market movement and the totality of indicators of securities issuers in the portfolio and, based on the conclusions received, makes transactions. This is a rather conservative trading method, it is quite suitable for beginners who start with fundamental analysis.
Technical trading – a trader trades on any timeframes based on technical analysis. Transactions are closed not on the basis of information about the market and the issuer, but on the basis of forecasts of price changes based on how they changed in similar external conditions. In essence, this is trading on trend analysis. Suitable for more experienced traders, but already at the training stage, it is worth starting to master the basics of technical analysis.
Another good strategy for beginners is trading in the medium term. The principles of action are the same as for scalping, but profit or loss is fixed based on price movements in the medium term (an hour, several hours, a day). This time is enough to conduct a deep analysis and make a decision or decide on a strategy. Very stable and comfortable trading method.
High frequency trading (if you have been on Habré for a long time, then you probably read about it) - this is trading, where traders are computers that perform millions of computational operations per second in order to get the maximum profit. It is interesting, promising, and even more relevant for programmers, but you need to know that it is not safe, requires knowledge and trading experience, and can also be attacked or blocked. It is not yet completely clear whether HF trading is the future of the entire global trading system, but it definitely has prospects.
Well, two types of trading are used exclusively by professionals and large institutional market participants.
Instant trading — trading due to price movements within different timeframes.
Trading on long-term timeframes - trading, which is based on a set of integrated economic processes, external factors, the state and trends of the markets.
There is another trading strategy - repeating someone else's actions in your strategy - will not lead you to professionalism and will not allow you to build a competent relationship with the stock market. It is interesting and informative to read such stories, but building your trading solely on copying is a very bad idea.
You can always "laboratory" check the chosen strategy on the data of past periods and calculate what result you could get. This is additional "training" for your analytical skills.
So, you have become familiar with the types of trading and…
Further, I recommend that you read the blogs of large brokers (but remember that they are sometimes written not by professional financial copywriters and not experienced traders, but by marketers with a philological background, so maximum criticality!), watch educational materials (you can even basic university textbooks), go online - a course from well-known companies (for example, I like a free school for beginners , from Russian-language materials it is the most balanced). There is another way - to hire a stock exchange teacher from former traders or from a university, in a short time the basics will be explained to you in an accessible way. But feel free to ask about practical experience.
Throughout the training, you will need a demo account where you can operate with virtual money and not incur a real loss (however, not make a real profit). (By the way, please note that a demo account should not inspire you, because, firstly, it is greatly simplified in relation to the real situation, and secondly, it can motivate and “play along”).
And when you are armed to the teeth with the basic theory and you know that Japanese candles are not sold on Aliexpress and do not fit Toyota and Honda, you can try to start working with real money on a brokerage account.
No, stop. I don’t want to sound like a homegrown psychologist, but I know for myself: tune in that you are not the wolf from Wall Street. No confidence, no relaxation, no excitement. You are an inexperienced sapper in a minefield without a map of mines. And that means maximum rationalism, reasoning and caution.
All right, let's start.
You need a broker, or rather, an organization where you can open a brokerage account. The broker will provide you with access to trading instruments and assume all technical and legal risks. The broker performs all actions on your behalf and at your expense (unless otherwise agreed), and you, as a trader, decide which assets to acquire, how to build a portfolio, etc. If desired (often with a certain set amount of investment), you can be provided with a personal broker with whom you can consult via chat or phone about some risky transactions, structured products, access to certain tools, etc.
How to choose a broker?
A professional participant in the securities market engaged in brokerage activities is called a broker. This is a company that has access to the trading floors of the stock market and will make transactions on your behalf and at your expense. In addition, the broker is a tax agent and it is he who will properly prepare and submit tax returns or issue a tax deduction. The money will be credited to your account already “cleared” from taxes. For their activities, the broker takes a commission - as a rule, this is a very small amount, but the guarantees and convenience are at a high level.
- First and foremost, your broker or forex dealer must have a license from the Central Bank of the Russian Federation. You can check it . If you are told that the license is about to be updated or is about to be updated, refuse to deal with such a company.
- Brokerage accounts of well-known banks deserve trust. Sberbank, VTB, Alfa-Bank, Tinkoff-Bank and others have investment proposals. They differ in capabilities, minimum conditions, a set of tools and accessibility.
- The broker must not only conclude an agreement on a brokerage account, but also tell you about all the tools, provide access to desktop and mobile applications necessary for investment activities.
- Even if you are going to invest passively (entrust money management to a broker), you must have tools to control and monitor the status of your accounts, you can see the details of all deals and transactions.
- I recommend that you pay attention to foreign brokers, for example, one of the popular options with at least some Russian-language support is Interactive Brokers. It is distinguished by trading programs with a huge number of functions and analytical capabilities.
- Additional insurance - the period of the company's activity in the market. If it is valid for more than 3 years, as a rule, the company can be trusted.
Despite the fact that the market of financial institutions is tightly regulated, new scam companies constantly appear that imitate brokers. They collect money from potential investors and then disappear without fulfilling any obligations. At the same time, they offer convincing and “geekish” arguments: “we have neural networks”, “we work with bitcoin, so we don’t get a license”, “we are for high-frequency trading”, etc. in fact, there is no question of any manufacturability of scammers. Be careful.
Do not confuse a broker with analysts, and even more so with robo-advisers. If the broker under the contract has a lot of obligations, then these entities do not bear any responsibility for their advice and recommendations. However, in any brokerage company, there are entire analytical services that provide brokers with a basis for decision-making and data for analysis.
How to form a portfolio?
There are three main investment parameters: return, investment period and risk. Accordingly, each portfolio is determined by the ratio of these factors. Here, as in the old joke: choose any two. On the chart you can see the ratio for different types of investors.
I think the most optimal ratio for investing: diversify - invest at least 40% in reliable instruments, 10% in high-risk instruments, distribute the remaining 50% based on liquidity and your main strategy. The optimal investment period is up to three years (including due to tax legislation). The easiest option to start is to open an IIS (individual investment account, we will talk about it later).
How to lose money with a guarantee?
Most beginners in private investing make the same typical mistakes, only the scale of the losses differs. Don't do it.
- Do not trade for luck and at random. Every action you take must be thoughtful and justified—and most importantly—based on data and analytics. For example, you saw the beacons of growth in Gazprom shares and decided to “dump” your stake on the back of growth, and the next day they rose by 40%. Why? Because the market was waiting for the release of positive financial statements and increased dividends - the statements were rolled out, growth began. You correctly considered the market signal, but did not receive a profit because you were in a hurry. And for an experienced investor, the state of affairs in the issuing company and information about all events is the most important tool. Even if you cannot give an accurate forecast and a deep explanation of market processes, you should at least know what trends to sell, buy or hold the assets of your investment portfolio on.
- Don't expect instant enchanting profits - you can't "trade for 10 and withdraw 000 in a week" (even for scammers). Depending on the investment strategy, profitability is formed, which may be negative as well. “Fabulous” returns can be the result of a risky investment by an experienced investor, but this is often just a matter of chance, because the results of high-risk investments are poorly predicted.
- Quitting your job to become an investor is the worst thing that can happen to a newbie. The path from first thought to an experienced broker can take 3 years, and 5 years of fairly dense training. I will tell you straight from my experience: even after 3 years of specialization in financial mathematics, securities management and stock trading in a university, the only thing you can do professionally and reliably is to recognize fraudsters. "Making money" on the stock exchange does not work, you need additional training and practice. Again, basically, brokers who work with client accounts are employees of financial institutions and, in addition to commission payments, have a salary and, in which case, they can easily move horizontally into analytics or training. If you drop everything, put QUIK, connect an account and start “playing on the stock exchange”, get ready to eat little, dress badly and save a lot. The conclusion is simple: either trading in the stock market is a source of additional income for you and an intellectual hobby, or you are consciously studying and changing your profession. And yes, trading on the stock exchange is not a game, it is work, even for a private investor.
- There are no worse mistakes than the previous paragraph, but a confident second place is taken by the use of money for your first steps in the stock market, which you need now or in the near future. For example, if you are saving up for a mortgage, a car, or any other large and necessary purchase, and suddenly decide to save up quickly, leave this venture - the risk is too high. But if you have a “jet” where you save free funds and you are sure that you will not need money in the near future (I recommend considering an investment period of 3 years), you can safely try yourself in increasing capital through a brokerage account. But remember - you can not only not get additional profit, but also lose the main amount of the investment.
- Do not mess with virtual currency.
The following two mistakes are directly related to the choice of investment instruments and they are two extremes of investment behavior.
- It is a mistake to use only one investment tool (for example, invest only in shares of one company, only in dollars, only in gold, etc.). More precisely, in this case, you do not get an active investment, but a rather conservative tool for “saving” money, which can bring income in the long run. In terms of efficiency, this type of investment can be compared with a bank deposit.
- It is no less wrong to invest in everything, especially in risky instruments, incomprehensible startups, new companies, in stocks against the backdrop of hype around some events. Such an attitude towards one's portfolio leads to a loss of profitability, a misunderstanding of the basics of structural investments. In the end, you can get into a situation where you simply cannot predict the behavior of market participants and the market reaction to them.
Here is the tweet
I am selling almost all physical possessions. Will own no house.
- Elon Musk (@elonmusk)
caused the following movement:
So predict your portfolio based on Twitter (by the way, a great way - there is already an understanding that the tweets of the CEO of corporations and especially politicians, and in particular D. Trump, actively influence stock market trends)
Do you know what tells you that you approached the stock market in the right way? You must be bored. Excitement in investments (any!) is the worst adviser.
We choose the stock market for various reasons: out of interest, to invest and save free money, out of a desire to make money or just learn something new. Some developers, after getting acquainted with the stock market, change their specialization and go into the development of trading robots.
The stock market is not an easy story. In reality, no one can constantly successfully predict the future of the stock market: today you will hit the mark, and tomorrow other investors (that's why this is speculative trading - in the good sense of the word). This, of course, is not a roulette wheel or a slot machine, but the whole difficulty lies in determining the trend, learning how to do technical and fundamental analysis. Everything else is based on that. And programmers, mathematicians, techies are often good at analyzing trends, but to say from the first day “I am an expert in economics” is too arrogant and can turn against you. Remember: there is always a risk.
What to read on the topic?
- — desktop site of a Russian investor (one of)
- - good analytical materials and examples, but remember that the site is dedicated to forex, and forex is different (we'll talk about currency later).
- (can be parsed as tasks)
- - many separate cool videos
And of course, read financial, political and insider channels in Telegram - information appears there first (after Twitter ;-)).
The list of references and sites varies greatly depending on the chosen tools, so there will be additional references in articles about different tools.
If you have experience in investing (positive or negative), tell us in the comments how you started, what did you come across and did you quit?
Source: habr.com