Thanks. I'm looking for a book that covers the basics and at least some advanced stuff. How big is the difference between the american and european markets? The book's excellence should more than cover this difference (more worthwhile than going for swedish books mainly). I won't have time for daytrading.
Well, I didn't use a book when I started trading, mostly learned from a friend of mine who works as a trader and from reading online. But he says if you must learn from a book, this one is decent:
http://www.amazon.com/gp/product/1580625703?ie=UTF8&tag=simplestocktr-20&link_code=as3&camp=211189&creative=373489&creativeASIN=1580625703I honestly don't know anything about the European market, I only trade in the American markets. On the otherhand, the American markets cover nearly everything, you can usually find any stock with significant market cap, foreign or domestic.
I want to focus on long term strategies (so I guess fundamental analysis?) but have a good overall understanding.
http://www.investopedia.com/university/fundamentalanalysis/Happy reading.
The most important thing you need to realize for long term investments(other than diversifying) is that there are basically two kinds of stocks(discounting gold for a second).
1. High growth cyclical stocks. Those are stocks in businesses that do well when the economy is growing and do poorly in times of recession. Examples would be the car industry, most heavy industries, commodities such as steel and oil, the luxury goods industry, the lodging industry,
restaurants, etc.
Ideally you want to buy those stocks when their prices have been squashed in a market downturn.
2. Defensive non-cyclical stocks. Those are stocks in sectors like large cap pharmaceuticals, food, utilities, discount retailers, etc. The most iconic example of this is probably Proctor and Gamble, but also businesses like Johnson & Johnson, Kellogg, etc. Those stocks tend to be fairly flat no-matter what the economy does. I'm generally not a fan of those but for long term investing they are absolutely necessary.
But you say you want higher risk. And for those you'll probably want stocks that specialize in emerging markets. So China, Brazil, Russian, South Africa, etc. Alternatively, you can try and find an emerging industry, but this is extraordinarily risky. Most start-ups fail and usually by the time they go IPO their stock is no longer undervalued.
Gold is traditionally an inflationary hedge. But in recent times due to decreasing supply it seems to have taken on a more hybrid role as well. I don't know enough about trading in gold to say one way or the other. Other precious metals such as silver and platinum are basically commodities. They are heavily used in various industrial processes(60% of world supply of silver is used in various industries, platinum prices are tied to the car industry, etc).
I have high respect for the subject and will likely (hopefully) study quite a bit before entering the market. I prefer to strongly relate confidence to results.
Moderately high risk. Say I want to start with 5-10k euro and then gradually increase that amount when I start to work in january.
Finally, if it differs from your advice to the above, what's your take on how to best learn trading?
Well, the most important question is do you want to trade in stocks or options? Generally speaking, the lower your capital, the more attractive options are. But options are by their nature not long term investments, the longest commonly available option is two years. Options are also riskier and require much more micro-management. But of course, their potential upside is also much higher.
