The Naked Trader: How Anyone Can Still Make Money Trading Shares

378 Pages·2008·7.17 MB·English

by  Robbie Burns

Brand new edition of this beslseller
THE
How anvone can make
monev trading shares
2ndldmon
Robbie Burns
The Naked Trader
2nd edition
How anyone can make money
trading shares
by Robbie Burns
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FirsteditionpublishedinGreatBritainin2005byHarrimanHouse.
Thiseditionprintedin2007
Copyright©HarrimanHouseLtd
TherightofRobbieBurnstobeidentifiedastheauthorhasbeenasserted
inaccordancewiththeCopyright,DesignandPatentsAct1988.
ISBN1-905-641-51-6
978-1-905641-51-2
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oftradeinanyformofbindingorcoverotherthanthatinwhichitispublishedwithout
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AuthorphotosbyJimMarks
Noresponsibilityforlossoccasionedtoanypersonorcorporatebodyactingor
refrainingtoactasaresultofreadingmaterialinthisbookcanbeacceptedbythe
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Designatedtrademarksandbrandsarethepropertyoftheirrespectiveowners.
Contents
AboutTheAuthor vii
Acknowledgements viii
1 – Introduction 1
WelcomeToTheCrazyWorldOfShares 3
EscapingTheRatRace 7
ADayInTheLifeOfANakedTrader 11
2 – Getting Started 25
IsTradingRightForYou? 27
Whoareyou? 27
TypesOfTraders/Investors 31
WhatDoYouWantFromYourTrading? 37
TheTrader’sToolkit 41
Introduction 41
Thetoolkit 42
Yourtradingenvironment 54
ImportantThingsToKnowAboutTradingOrInvesting 57
Gettoknowyourareaofexpertise 71
3 – The Knowledge 73
WhatYouNeedToKnowToStartTrading 75
Spreads 76
Tradingcosts 78
Normalmarketsize 80
Tradinghours 81
Whysharesmoveupordown! 81
Marketmakersandthecrowd 84
Dividends 87
Howdoyoubuyandsellashare? 91
HowDoIFindSharesWorthLookingAt? 93
HowToSelectShares 101
Pickingundervaluedshares–mysecret! 119
WAGS&SHAGS 123
iii
TheNakedTrader
ChartsAndHowIUseThem 127
Buybacks,AGMsandPerks 135
Sharebuybacks 135
Shareholders’meetings/AGMs/presentations 135
Shareperks 136
ThePerfectPortfolio 137
4 – Trading Strategies 139
MarketTiming 141
Volumes 148
SettingStopLossesAndProfitTargets 153
IPOs–HowTheyCanMakeYouMoney 161
Buyingintonewissues 163
Mainmarketnewissues 165
AIMnewissues 167
TradingTips–TimesOfTheYear 171
TimeForTeaAndToast 175
10WinningStrategies 179
Strategy1: seekcompaniesstartingtochange 181
Strategy2: findcheapshares! 184
Strategy3: buyahotsector 186
Strategy4: recoveryplays 189
Strategy5: playshort-termtrends 192
Strategy6: buyboringcompanies!! 194
Strategy7: buyshares“doingthesplits” 196
Strategy8: companiesdoingwellinspecialistmarkets 198
Strategy9: findingbidtargets 201
Strategy10:buysharesmovinguptothemainmarket
fromAIM 207
Otherstrategies 209
5 – More Knowledge 211
SIPPs 213
BulletinBoards 217
Bulletinboardshorthand 220
Level2AndDMA 221
DirectMarketAccess(DMA) 226
iv
Contents
SpreadBetting 227
NakedTrader’stengoldenrulesforspreadbetting 246
Directory 247
Shorting–makingmoneywhensharesfall 248
OtherInstruments 255
CFDs 255
Coveredwarrants 257
Investmenttrusts 258
6 – Trading in Real Life 261
ItShouldn’tHappenToAShareTrader… 263
Avoidingthestinkers(don’teatprunes) 263
Mistakesnewinvestorsmake 272
Toptenmistakes 275
Andnow,mybigmistakes… 283
DearNakedTrader… 287
Traders’Tales 303
TheMarketCanSeeYouComing 315
7 – The End (Almost) 323
TheNakedTraderRules 325
Finally… 329
Appendix 333
Websitesworthalook 335
Books 337
Quiz–Whatsortofinvestorareyou? 340
NakedTraderseminars 345
Threelittlelettersaddendum 347
Index 349
Spend a day with Robbie at one of his seminars near
Heathrow Airport, London and bring the book to life!
More details on page 345.
v

About The Author
Robbie Burns has been a journalist and writer
since he graduated from Harlow Journalism
College in 1981. After starting life as a reporter
and editor for various local newspapers, from
1988-1992hewaseditorofITVandChannel4’s
teletext services. He also wrote ITV’s daily
teletext soap opera “Park Avenue” for 5 years.
He then went on to freelance for various
newspapers including TheIndependentand The
Sun, and also helped set up a financial news
service for CNN. In 1997, he became editor for
BSkyB’s teletext services and set up their shares and finance service. While
there he also set up various entertainment phone lines in conjunction with
BSkyB including a “Buffy The Vampire Slayer” phoneline which made him
nearly £250,000.
He left full-time work in 2001 to trade and run his own businesses, which
included a café in London that he sold, doubling his money on the initial
purchase.WhileatBSkyB,Robbiebroadcastadiaryofhissharetradeswhich
became hugely popular. He transferred the diary to his website,
www.nakedtrader.co.uk, which became one of the most read financial
websites in the UK. Between 2002 and 2005, he wrote a column for The
SundayTimes,‘MyDIYPension’,featuringsharebuysandsellsmadeforhis
pension fund which he runs himself in a SIPP. He managed to double the
money in his pension fund from £40,000 to £80,000 in under three years as
chronicled in theSundayTimes. By mid 2007 he doubled it again, reaching
£165,000. Robbie now writes a weekly column for the leading financial
website, ADVFN.com.
Robbiehasmadeataxfreeprofitofwellover£500,000fromtradingshares
since 1999, and has made a profit every year, even during the market
downturnof2000-2002.Publictradesmadeforhiswebsitehavemademore
than £400,000.
HelivesinariversideapartmentontheThameswithhiswife,Elizabeth,son
Christopher and cat Diddle. His hobbies include chess, running, swimming,
horse racing, and trading shares from his bedroom, erm… naked. After all,
he wouldn’t be seen dead in a thong…
vii
Acknowledgements
ThankstomywifeElizabethforhersupportandputtingupwithmemoaning
constantly while I was writing the book. It’s like putting together a giant
jigsaw puzzle and often it drove me crackers. Thanks to Roy for the great
cartoons.Alsothankstoallthecontributorstothesuccessandfailurestories.
Thanks also to my editor, Stephen Eckett, for his always valuable
contributions – and for making sure everything is as accurate as it can be. If
there are any spelling misstakes they are his fault and not mine, OK?
viii
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