Log in and take stock

The sorts of wild swings we've seen on world sharemarkets in the past few weeks are a test of whether someone is cut out to make a living from share trading, an activity the internet and trading software has opened up to many more people.

For some, the market fluctuations have been an opportunity to pursue profits by buying stocks on the cheap. But for others, real or potential trading losses have prompted a retreat to the sidelines.

The take-up of trading by individuals started to grow at the turn of the century, soon after the introduction of internet trading. It has been spurred by the aggressive marketing of computerised trading systems, known as "black box" systems.

In the latest development, mobile apps are giving people even easier access to the sharemarket. Online broker CommSec reports it is getting 200,000 hits a week as people check stock prices on its new app.

Brian Phelps from CommSec says people might start trading part-time with a computer screen, log-in to a service such as CommSec and start with as little as $10,000. Serious, full-time traders might have $250,000 in holdings at any one time and day traders might turn over twice that amount in a day.

Successful traders share common attributes, he says. "Generally, they're decisive - they'll make a decision and stick with it."

Clients of services such as CommSec don't need any other software to get under way but visit an investment expo and you'll see any number of people spruiking computerised trading systems - sometimes with suggestions of great riches to be gained.

The Australian Securities and Investments Commission says no one has found the magic mechanism for sure-fire profits and "anyone who encourages you to think they have is someone to avoid".

It says to be wary of promoters promising high returns over short periods, who don't disclose the risks of trading shares or who provide examples of big profits made by users of their program.

Insist on a demonstration, hunt independent reviews and only buy from people on ASIC's Australian Financial Services Licensee Register (see asic.gov.au).

Tricks of the full-time trader

Richard Hainsworth bought his first shares at age 15 and over the years has spent periods making a full-time living by trading on his own behalf, punctuating a varied career path that includes horticultural designer, farmer and restaurant manager.

Hainsworth, who has been in the markets full-time again for the past 2? years, describes himself as a trader and investor, rather than a quick-turnover day-trader.

"The sharemarket is probably one of the best ways to learn about what's happening in the world," he says of what keeps drawing him back.

In practical terms, he likes the liquidity of this type of business. If you own $500,000 in real estate and need access to funds, you either have to take out another mortgage or sell, he says. But with $500,000 in shares, say, you can sell just $500 and have the money in your bank account within three days.

Plus, if you have a computer and the internet you can work anywhere.

The flip side, however, is the potential for burnout, Hainsworth says, and that's why he deliberately takes breaks from trading. "In volatile times the pressure can be enormous," he says.