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Re: [sharechat] Markets

From: Holden Glova <>
Date: Wed, 18 Dec 2002 19:07:27 +1300

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On Wed, 18 Dec 2002 11:24, Phaedrus wrote:
> Holden,
>        I don't think Brown Co would meet your needs. They have quite a few
> customer requirements, including a US$15,000 minimum account deposit. I
> used Datek for many years - they have now merged with Ameritrade, and
> continue to give excellent service along with the best online facilities I
> have found anywhere. I suggest you open an account with them. It's easy,
> and all info is online at They charge $10.99/trade
> (market or limit) and have a $2000 minimum initial deposit. What you get
> and what you are charged depends a lot on your account size. For example,
> if your acoount drops under $2000, they charge you $15/quarter. If your
> account is over $100,000 you get free live Level II quotes etc. All other
> things being equal, the higher the volume traded, the better TA works. So,
> it works better in Aus than NZ, and better in the US than Aus. I would
> advise you to start out testing your systems by paper trading before using
> real money. Have you considered trading ETFs? These are Exchange Traded
> Funds, and the best known examples are QQQ which tracks the Nasdaq 100
> Index and SPY which tracks the Dow. There are several advantages with
> these. (1)They have enormous volumes traded every day (2)Bid/Ask spreads
> are very low, typically one cent, so all Buy/Sell orders can be lodged at
> market without fear of excessive slippage. (3)ETFs are not subject to the
> "downtick rule", so can be shorted with ease anytime you like. (4)Because
> they are in effect a bundle of stocks, you will not get the violent price
> fluctuations sometimes experienced with single stocks. (5)It would be quite
> acceptable for your US account to comprise a single ETF trade, but putting
> all your US$ on a single stock would be foolish, in my opinion. I would
> regard the minimum practical US account size to be about NZ6000. This would
> equal about US3000, and give you enough money for a single QQQ trade. (100
> at $26.00) Currently, the US market closes at 10am NZ time. In the winter
> it closes at 8am NZ time. It is therefore easy to monitor the last hour or
> three without turning your life upside down. In any case, the market takes
> an hour or two to settle, and this period is best avoided, in my opinion.
> Don't even think of attempting day trading.
>       Regards,
>                 Phaedrus.

Thanks all those that replied to my post - I really appreciate anyone taking 
the time to try and enlighten me on the subject.

With Ameritrade, how do you get your money there, via a wire? Your comment 
about paper trading is a good idea - this is something i have been doing 
since August. Where it falls down though is when you paper trade you of 
course always get the stock at the price you specified :) I have noticed on 
the few trades I have done (3 real ones on the ASX) that this might not 
happen. However, it is a valuable exercise for me as a beginner and does 
increase my confidence, also makes me a bit greedy when i get it right and 
think of what I could have gotten :)
Where I have a hard time right now is I dont' have a choice about putting all 
my dollars on a single stock because I have so few of them. It would be silly 
to put my $4000 and split that up over 4 stocks because the brokerage paid on 
that would be too great, wouldn't it? I am building up my trading capital, 
but can only do it $1000/month at a time. I had thought I would keep putting 
in my $1000/month and split it up into $3000 chunks when i can for trades. 
Care to share you how you might go about distributing capital if you where in 
this situation? I will look into these ETFs, I have never heard of them. Do 
you by chance of a link to where I might find out more about them?
I can check the odd bit of stocks at work, but of course I have to restrict 
that...besides if I am end of day trading I shouldn't make emotional 
decisions in the  heat of the action right? So it might be better to not 
watch the trading as the day progresses.

Looking forward to your wisdom.

- -- 
Holden Glova
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