Airlon and Aquaswim said very good stuffs worth re-reading even for old traders/investors.
One very important thing (beside everything above) is to avoid being too sentimental on your investment and on your money.
The first time you lose 50% on a bad pick (and don't worry that will come quickely) you think that you had just bad luck. Then you lose 90% on an even worse one and you still think you have been especialy unlucky.
NO.
This business as usual: Stocks do fall 20, 50, 90 and 99% regularly. Sem even go to zero.
Almost
every stock have fallen at least 25% at some point of their history.
Fallling by 50% or more is common occurence. And it's not because you bought a stock that it's anything special.
The next bad thing is that when you have a stock which is falling because a bad new was first released 3 days after you bought it, you only have two choices:
Sell but then the stock recovers and go up
Hold and the stock plunge even further.
It's always like that. ...except when you have learned to read and understand what you read as Aquaswim explained. And even so it's not obvious.
I tell you that so that you be prepared psychologicaly to what will
more than certainly happen with some of the stocks you will buy.
Yes, reading abstract numbers is boring at first, but by the time, these numbers will sound more and more appealing to your hearth.
When you read "a P/E of only 6.5" (simplified example) it's immediately arousing for investors who watch stock for a few years already while for you, at the moment, it's still just another boring number. Apetite comes when eating.
About how to manage your money you have to know whether these $30.000 are the money you allocate for stock trading (and you do have other assets, savings or income aside)(
case 1) or all the money you keep for general financial investment (other than professional, housing etc investments) (
case 2). Also very important to know is whether you will need this money in a few years for some reason. (
case 3)
In
case 1, I would invest gradualy, buying one or two stocks for $1000 each, as Aqua said, to test the water. Then 3 months later buy another one and so on. Take your time don't fire all your matches at once. If it take 2 years to plce your money and build you portfolio it's fine.
Stock trading is a long term business.
I don't agree with buying for $500 because transaction fees will eat a big chunk of your profit. On-line brokers charge $7 to $25 for each transaction, that means $14 to $50 for one buy-and-sell.
Physical or on-the-phone brokers charge even more.
It's difficult to make money with less than $900 per trade. So i suggest buying, in your case, from $900 to $2000 each. Not more because you will burn all your cash. The key is to
keep cash because who has cash is king.
In
case 2: Same as case 1 except that you have to invest at least half into something safe, in one word:
not stocks. it can be bounds or a bound fund, an ultra stable fund, or another product for "preservation investment". Talk to your banker about these products. They will give you just a little bit more than a depo, between 4.5% to 15% per year, but at least you'll be safe. Play with the rest of your money. With $10.000 you can start a normal portfolio.
In
case 3: Don't invest in stocks at all. Because one invests in stocks only the money one doesn't need.
Now about
NMX, are your sure you want to trade the stock or do you want to trade futures (oil, gold ect)?
HTH