July 4th, 2009
12:12 PM GMT
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LONDON, England – Trading in the markets is going to be a long-term challenge and my education is still far from complete, despite all I've learned over the past month.

Adrian Finighan has found it tough going trying his hand at market trading.
Adrian Finighan has found it tough going trying his hand at market trading.

I'd like to thank all those who've helped me in my quest: Ryan O'Doherty, James Hughes and Ashraf Laidi at CMC Markets, David Jones and his team at IG Index, David Buik for his invaluable advice and, of course, Robbie Burns, the Naked Trader.

If I've inspired you to become a Rookie Trader too then I wish you good fortune. The only advice I can give you is that everything you need to be able to trade successfully is, with an Internet connection, out there and freely available to you wherever you are and whatever your income.

Remember: study hard and be patient. Don't expect to be making big profits within weeks. Please bear in mind that without proper research it's easier to lose money than make it. But take it slow and steady and who knows what you'll have achieved by this time next year.

Good luck. I promise to come back and update you on my progress every now and then over time.

July 3rd, 2009
03:13 PM GMT
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LONDON, England – Several days have elapsed since my very useful meeting with Robbie Burns, a.k.a. the Naked Trader. Robbie's advice and encouragement have helped me narrow down just what sort of trader I'm going to be as I try my hand on the money markets.

I’ve decided that I'm not going to trade currencies or indexes as I don't have the time to sit in front of my computer all day waiting to take advantage of intra-day price movements. Also, I don't have nearly enough experience with the trading platforms to get in and out of positions quickly.

I won't be trading commodities for the moment either. I just don't know enough about the commodities markets, but I will start to follow gold in the hope that one day I'll feel that I know enough to spot opportunities. That leaves just shares - and UK companies in particular. As a financial journalist it's what I know best having followed the ups and downs of the stock markets, day in day out, for the last 15 years.

So, I'm not going to be a day trader. In reality I'm going to be somewhere between a swing trader, who looks to take advantage of medium-term price changes, and a trend trader, who looks to take advantage of longer-term price trends.

 Now that I know who I am, I suppose that the moment of truth has arrived. It's time for me to stop paper trading and commit my own money to a position.

I've spent the last few days looking for companies that fit Robbie’s exacting criteria. I've been getting up at 5am and going to bed after midnight, trawling through data on the web.

So far I've come up with a list of eight companies that I think are worth watching using technical analysis - but I'm only part way through the list of FTSE 250 companies. I'll be researching and adding to my list for weeks to come.

One of my companies, which is in the defense sector, is due to release its annual report in the very near future. The "fundamentals" (i.e. my research into the company – its profit/loss, previous performance and outlook etc), look good and technical analysis is giving me a strong buy signal.

Heck, let's go for it!

When the market has settled, around 40 minutes into the session, I place a "long"spread bet, meaning that I expect the share price to rise, at £1 ($1.63) a point. I place a trailing stop loss below the level where I think it may be triggered by normal market "noise." And that's it. I'm in.

Because of the stop loss I know that my total potential loss on this trade, if it goes against me, will amount to £28 ($46), which represents a little more than two percent of my total available capital.

A heart-stopping moment comes several days later when the World Bank releases its revised economic outlook for 2009 and the markets head south. But luck is on my side. My company's share price holds firm. The next day the company releases a very healthy annual report and the share price rockets nearly 100 points in a day! The next day it rises even further and the day after it rises again.

I'd love to be able to report that I rode the price rise all the way to the top, but I didn't. I played safe and got out 88 points higher, realising a profit of £88 ($144), improving on my risk-to-reward strategy of 2:1. With time and experience I'll learn to ride the price and take profits when the market tells me that the share is overbought. But for the moment I’m happy to have made money. It feels great.

So, my first trade was a success. I'm under no illusion though – not every trade will go my way. In fact, I'm prepared for the majority of trades to go against me. But, as Robbie Burns was at pains to point out, the trick is to micro-manage my positions so that I get out of negative trades long before they can seriously erode my capital, while riding the winners. The aim is for profits to outweigh losses. This way seven out of 10 trades could go against me - but I could still make money.

I haven't traded again since my first success. I'm in no hurry, much to the frustration of my colleagues, who can’t understand why I'm not making or losing a fortune. I'm still steadily building my list of companies to watch and I'm waiting patiently for trading signals. I'll go at my own pace and won't trade recklessly, jumping in and out every time I see the vaguest of opportunities. I want to be sure that I have the best possible chance of winning before I go in again.

In the meantime I am the angler, watching his lines for a bite.

* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

July 2nd, 2009
10:30 AM GMT
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LONDON, England – Not a good start to the day. Sitting in front of the computer last night I naively decided that the FTSE100 had fallen far enough and so I used some more of my imaginary pot of money to "go long" on it, i.e. I expect it to rise in the next trading session.

I was delighted to find this morning that the FTSE 100 had indeed risen, but was dismayed that my trade had closed out at a loss overnight. I had completely forgotten that as markets can be traded 24 hours a day it is the futures price that determines the bid and offer prices when the real market is closed. The spread between the bid and offer prices tends to widen overnight and my FTSE 100 trade was tripped out by an over-cautious stop loss.

Lesson learned. Must place stop losses far enough away not to get stopped out by normal market movements.

Later in the day I meet Robbie Burns, whose book "The Naked Trader" to some extent provided the inspiration for the "Rookie Trader" series. Personable, calm, witty and great company, Robbie is an inspiration, the perfect antidote to the stress of the adrenalin-fueled trading floors of the past few days.

A former journalist, Robbie has quit the rat race and now makes a very good living trading from his waterside home and through his book he’s willing to show you and me how we could do the same. Robbie has a knack for spotting undervalued or overbought companies and for picking just the right moment to trade them. His trading record is published on his Website for anyone to scrutinize and in my inexperienced view it makes for very impressive reading.

Fortified by tea and toast (toast plays a big part in Robbie’s trading, as you’ll find out if you read his book), Robbie generously takes me through his system for vetting potential trades. He shows me how to find and read a company statement using a system of "traffic lights," how to interpret their profit and loss account and how to find out how weighed down by debt a company is. Once he’s found his potential trades Robbie switches to technical analysis and waits patiently for a buy or sell signal. He’s like an angler watching his line for a bite, but with 20 or more floats on the water at once, not just one or two.

As he talks a penny drops, a light comes on above my head, and I start to grin. Suddenly it all makes sense and for the first time I can see my trading potential. The possibilities are endless. I can do this. I just needed Robbie to put it all into perspective. It’s not rocket science, Robbie explains. Common sense, good money management, a "Mr Spock" mentality and methodical research will pay off.

Invigorated by Robbie’s infectious enthusiasm I head for home, determined to spend every spare moment over the next couple of days coming up with my own list of potential trades ready to cast my own lines onto the water.

 * How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

July 1st, 2009
10:43 AM GMT
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LONDON, England – Today is the last day of school and it's when I get to place my first trade. Before that happens though I'm back in the classroom for perhaps the most important lesson of all - risk, money management and analysis.

Ryan O'Doherty, my tutor at CMC, explains the concept of risk-to-reward ratios. He explains in far greater detail than I can go into here that I should only ever commit a small portion of my capital to any trade and that I should be looking for a risk-to-reward ratio of 2 to 1. So, I should be willing to risk, for example, £50 ($82) if there is a reasonable chance of my profiting by £100.

How do I know that there is a reasonable chance of my doubling my money? Well that's where fundamental and technical analysis come in.

Fundamental analysis means finding out everything I can about the instrument I'd like to trade. If it's a share, for example, what shape is the company in? What does their latest company report say? What sector does it operate in and how are other companies in that sector performing? What is happening to the market in general? What in the news could be affecting the company or the wider share market in general?

Technical analysis involves studying the performance of a particular instrument over time by using graphical indicators such as moving averages and price oscillators. Study technical analysis long and hard enough and you can spot the best moments to buy and sell, Ryan explains.

Ryan asks me if there's a particular trade I'd like to place there and then. It just so happens that shares in Barclays Bank have tumbled on this particular day as a foreign investor has sold a large number of shares. I know that Richard Quest has bought Barclays shares on behalf of Quest Means Business and is following their movement over time on the program. It seems reasonable to suggest going long - that means that I expect the price to rise - on Barclays.

A few taps of the keyboard later and I'm in. My first trade is placed. I commit £50 from my pot of imaginary money, looking to make £100. I set a stop loss 50 points below the price at which I came in and that’s it.

The price of Barclays dips further throughout the day. My heart sinks as I watch the price ticking ever lower, though fortunately it gets nowhere near triggering my stop loss. I try to put it out of my mind and get on with the rest of our filming schedule, but I leave CMC later with a knot in my stomach and a sense of failure hanging over me. This wasn't the way I wanted the “classroom” part of my training to end.

 * How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

June 30th, 2009
01:39 PM GMT
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LONDON, England– Another beautiful sunny morning and I'm back in the City. It's a shame, but I'm not feeling nearly as bright as the weather. I was up very late reading through the course work and trying to get my head around the technicalities of trading. I also slept fitfully, dwelling upon what David Buik said yesterday about my needing to have money as one of my gods.

After much thought I've decided to take what David said with a big pinch of salt. Yes, money may not be a major motivating factor for me, but as personality types go I'm very competitive. I like to win and will work very hard to do so. I've come to the conclusion that my trading motivation will be to pit my wits against the market and win. Whether my profit is hundreds or thousands of pounds or just a few pence won't matter - just so long as I come out on top. The challenge will be more important than the reward.

Am I heading for a fall?

Back in the classroom and Ryan O'Doherty at CMC Markets takes me through the process of placing a trade. I'm introduced to the order ticket and the spread, the difference between the price at which I can buy or sell. I'm shown how to calculate margin, which is effectively the deposit I have to put down in order to trade.

I'm also shown how to place stop and limit orders, both of which will get me out of trades at a pre-determined price, realizing my profits or limiting any loss. It's all beginning to make sense and I leave at lunchtime feeling much more optimistic.

Over at IG Index it's more of the same. The trading platforms look very different but do exactly the same thing. Order tickets, spreads, deposits, stops and limits. Yes, I think I’ve got it.

Before heading for home and another evening of course work I visit the London Metal Exchange, a global trading centre for the likes of aluminium, copper and zinc. The LME is the last open outcry trading pit in Europe. Traders have been yelling across its trading floors since 1877. As I arrive it's nearly 5pm and the markets are about to close. Traders are ramping up the noise and striking last minute deals. The hubbub is unbelievable.

It's amazing to watch but I should imagine that it's an incredibly stressful environment in which to work. Open cry trading requires a particular breed of person. It wouldn’t suit me and I thank my lucky stars that when I finally get to start trading I'll be in the quiet comfort of my own home office.

* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

June 29th, 2009
07:45 PM GMT
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LONDON, England – A bright and sunny Monday morning and I’m off to work. But my morning commute today takes me not to my usual central London destination, but to the financial heart of the capital, the Square Mile. The City, where fortunes are made and lost. I feel strangely nervous, like the new boy at school.

Open the financial pages or any investment magazine and you'll see ads from companies offering to teach you to trade. I've accepted invitations from two such companies who are going to train me to use their proprietary trading platforms. I don't necessarily endorse either of them and I certainly don't know enough yet to decide whether their services rank among the best. But I need their hospitality if I'm to stand any chance of succeeding in my goal to become a competent trader.

At CMC Markets, market strategist Ryan O'Doherty introduces me to the concept of CFDs or Contract for Difference. A CFD would allow me to trade on a financial instrument such as a share or a commodity without having to physically own it. They are a leveraged product which requires a trader to deposit only a fraction of the overall value of their trade. This is called trading on margin.

Markets fall as well as rise. CFD traders can potentially profit from falling markets too because they are trading on the price movement of an instrument. This is known, Ryan explains, as "going long" if you expect the price to rise - or "short" if you expect it to fall.

Ryan is at pains to point out that while margin trading can magnify returns, losses will also be magnified, so CFDs aren’t suitable for everyone.

A couple of hours later and my head is buzzing. It seems incredibly complicated. Ryan gives me my coursework to read and sends me on my way. I stumble out into the sunshine wondering whether I'm up to this.

Fortified by coffee and a sandwich I'm welcomed into the offices of IG Index and another classroom where chief market strategist David Jones outlines the concept of spread betting. David explains that spread betting is very similar to trading CFDs but with certain tax advantages for UK citizens.

David then goes on to teach me about currency pairs, one of the most popular spread betting and CFD instruments. It’s the volatility of the currency market that makes it so attractive. Whereas stock markets can trade within a narrow range for days, currencies often present trading opportunities many times a day.

David points out that, as a leveraged product, the potential for losses as well as gains while spread betting is magnified. He says that due to the extreme volatility I might like to think about getting to know the currency markets well over time and gaining much more trading experience before venturing in.

More coursework to tuck into my briefcase and my school day is done.

Before joining the swarm of evening commuters streaming away from the city, I pop in to see David Buik of BGC Partner, a man I’ve interviewed hundreds of times on television over the years and someone whose expertise I value.

David has kindly offered to give me "independent" advice as I attempt to become a competent trader.

Sitting in his 19th floor office, admiring the view over the Thames, David drops a bombshell. "If money isn’t one of your gods, you’re wasting your time in this environment," he says.

Oh dear.

You see, money never has been a great motivating factor in my life. Broadcast journalism is a vocation for me. I’m fortunate enough to have a fantastic employer who rewards me handsomely for what I do and I rarely give money a second thought. Sure, I'd like to have a bit of extra cash now and then - but who doesn't? Does this mean then that my attempt to become a successful trader is doomed from the start?

Perhaps it is. Perhaps I just haven't got the right attitude and never will. No time to worry about that now though. I've got several hours of coursework to get through before I can rest my weary bones.

* How does Adrian Finighan fare in his career as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

June 29th, 2009
09:30 AM GMT
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LONDON, England – Just a decade ago, if I’d wanted to trade the markets I’d have had to engage the services of a stockbroker. I’d have been limited to trading, over the phone, UK and perhaps some US stocks. Every trade would have been subject to a hefty broker’s commission.

Can CNN’s Adrian Finighan cut it as a rookie trader?
Can CNN’s Adrian Finighan cut it as a rookie trader?

Today, thanks to de-regulation and a high speed Internet connection, I can trade almost anything, anywhere in the world, from wherever I happen to be at the time. I can do it 24 hours a day - and it won’t cost me nearly as much as it would have done 10 years ago.

I’ve been a financial journalist for more than 15 years. Booms. Busts. Inflation. Deflation. Mergers. Acquisitions. Hostile takeovers. Profits. Losses. Interest rates. Bond yields. Bankruptcy and fraud. I’ve covered them all over the years and I’ve learned a lot about how the markets work.

But, despite having a ringside seat I’ve never actually dipped a toe in the water and tried to make money myself.

Actually I have.

Some years ago I stupidly listened to a colleague who fancied himself as an ‘expert’ and bought shares on his recommendation. They bombed within weeks and, embarrassed by the memory, I try my best never to think of it.

But lately, as the financial markets have suffered a major meltdown and the media has vilified bankers and their "greedy, risk-taking’" traders for helping to tip the global economy into recession, I’ve begun to wonder whether I could have done any better?
As a reasonably intelligent, responsible, adult would I have been able to trade the markets without taking big risks? Would I have been able to trade responsibly and turn a modest profit without having my head turned by the prospect of big gains?

Of course, all of this is somewhat academic. I can’t answer those questions because while I know how the markets work, I know nothing of how to trade them. So, with a CNN camera crew for company, I decided to find out.

I became a Rookie Trader.

I’ll be detailing my experiences right here in this blog over the next few days.
In the interests of full disclosure I should tell you that we filmed my journey into the markets on five days across the course of two weeks in June. As the films are broadcast over consecutive days you might get the impression that I went from novice to trader in a week.

Not so.

The extra time needed to study all of the course work and additional reading material makes that impossible, as you’ll see when I go into detail later. And even now, course work and filming complete, I’m still little more than a novice with much still to learn.

* How does Adrian Finighan fare as a rookie trader? Watch Quest Means Business Monday to Friday: 1800 GMT London, 2000 CET, 0300 HK.

February 17th, 2009
04:38 PM GMT
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BARCELONA, Spain - Cell phone manufacturers and network operators may be able to ride out the recession as consumers view their handsets as an essential rather than a luxury, but there's a potential dark cloud on the horizon for the mobile technology industry - the capacity crunch.

As our appetite for mobile internet and data services continues to grow, thanks to devices like the iPhone, mobile service providers are soon going to fiind that their networks won't cope with demand.

Too much traffic will clog the wireless highway and the networks know that they have to invest heavily in their infrastructures to head off the problem.

In the current economic downturn they'll find it hard to raise the required funds by borrowing and are reluctant to pass on the cost to consumers who are unwilling to pay more.

The most likely solutions, mobile advertising and peak time network congestion charging are also unpallatable. So there's no easy answer to this thorny issue, which is one of the main talking points here at this year's Mobile World Congress in Barcelona. Watch more about the capacity crunch

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Filed under: Technology

February 16th, 2009
01:44 PM GMT
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I've just completed my first two big CEO interviews planned for this week at the Mobile World Congress, and they couldn't have been more different.

First it was Microsoft's Steve Ballmer, who is here to launch an upgrade to the Windows mobile operating system (look out for my TV reports for details).

Steve's a cool guy and gave us a great interview, but before we could talk to him we had to negotiate the huge, highly efficient Microsoft media machine.

We were placed into the care of no less than four different minders before being ushered into the great man's hotel suite overlooking the conference venue for our 10-minute audience which was over all too quickly.

Contrast that with the welcome we got at RIM, the makers of BlackBerry devices.

I know it's a much smaller company, but the atmosphere at their show "chalet" was so much more relaxed and informal.

Joint CEO Jim Balsillie was his usual, cheerful and irreverent self and gave his time generously, even when I asked him awkward questions about stock options which have been getting RIM into the news for all the wrong reasons. (You can see both interviews throughout the week on CNN or here at cnn.com.)

Otherwise, it's been a crazy first morning here at the Congress. First job of the day was an early call on a company called Tellabs, which helps mobile operators get the best out of their networks.

They told us about a survey they commissioned in which they asked mobile consumers about their future plans. The results have given the mobile telecoms industry confidence it can weather the worst of the economic downturn.

It showed that while people may be reluctant to splash out on a handset upgrade in the near future, they aren't planning to cut back on the number of calls they make or the amount of data they use.

It would seem that we just can't live without our beloved mobiles and in a recession our phone bills will be considered by many as essential spending.

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February 7th, 2009
05:38 AM GMT
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LONDON, England — I spent an enjoyable day going “back to my roots” for our report on how the UK’s commercial radio sector is coping in the current downturn.

I began my career in radio some 25 years ago and have a lot to thank it for (Heavens! Is it really that long ago? I feel so old. I reported from Stockholm recently and my CNN producer for the trip was born in the year I started working!).

As well as providing me with solid journalistic training and experience, it taught me many of the broadcasting skills I use today here at CNN. For instance, the apparent “effortless” ability to talk about nothing in particular, without a script, at a moment’s notice and for any length of time.

There are of course no pictures to disguise unintentional gaps on radio and, as silence is far from golden, the host has to talk. Thus I learned to think on my feet (in television we call this skill “filling.”). Or the ability to “fill” while someone is counting down to zero through my earpiece and to end a sentence just as the countdown reaches one.

I learned to convey emotion and warmth through my voice and how to read a script out loud without it sounding as though I was reading words on a page. People often remark about the rich quality of my voice, which I can assure you has not been acquired thanks to any of life’s “excesses.” Radio taught me the “singer’s technique” of talking from my stomach. I now do it habitually, which gives my voice the “warmth” that people seem to find attractive.

The UK commercial radio industry seems to be coping pretty well in the current “difficult trading environment.” Some networks, due to their aggressive acquisition strategies and the fact that they have paid a premium for licenses, are saddled with high levels of debt and are finding things particularly tough. There are others in the bigger radio markets like London that are struggling purely because they are competing against so many rival stations. But on the whole, the industry is optimistic that it can see the recession through. Radio advertising is relatively cheap compared with other forms of media and the fact that radio is a medium you use while doing something else means that it complements, not competes with, television, magazines or the net. All this makes it very cost effective from an advertiser's point of view.

We visited just two of Britain’s 300 plus stations for our report: London’s Magic. Flagship of the Bauer media empire’s 25 Magic branded stations and Hertbeat FM, which broadcasts to a small chunk of Magic’s territory to the north of the capital.

Magic is top dog in London with more people listening for longer than any other station. Big, high spending advertisers are keen to be associated with the brand which owes its success to a polished “more music, less talk” format of feel good hits linked by household name presenters. Every song, every ident, every link is planned for maximum impact. The studios are plush and hi-tech and have a very “big media” feel. It’s all very impressive, but somehow rather soulless.

Contrast that with tiny Hertbeat FM, broadcasting from a converted outbuilding at Knebworth House, a stately home famous for the rock concerts held in its grounds. The station gets only the crumbs of the national advertising cake and so relies upon the ad-spend of hard pressed local businesses for its living. But Hertbeat’s very “localness” is the key to its success … “Made in Hertfordshire, not in London” says one of its jingles. Listeners and advertisers alike appreciate the feel-good mix of music and talk about local places, people and issues.

Hertbeat FM’s zoo format breakfast show is the one that blasts my household awake each morning. The music and infectious chemistry between DJ Steve Folland and his co-hosts Chris Hollis and Dawn Easby are popular with the whole family (all three are up-coming stars and I dread the day when they’re snapped up by one of the big networks, as they inevitably will be. Breakfast just won’t be the same without them).

The morning after my report aired on CNN’s Quest Means Business there was a lot of on-air banter and gentle leg pulling about Richard’s larger than life personality. I quickly arranged for Richard to call the Hertbeat studio and there followed one of the funniest and most entertaining pieces of radio I think I’ve ever heard when a grumpy, never at his best in the morning Richard was cajoled into growling the word “sausages.” Afterwards Richard remarked how much he’d enjoyed his live radio appearance. And then he said that he envied the Hertbeat presenter’s freedom. I asked him to explain what he meant. “Their freedom to deviate from the format, dear chap”, he said. “I bet they have a damn sight more fun at work each day than anyone at Magic or the other big stations.”

And I think he’s got a point. Perhaps big is not always best and it’s the more agile, smaller stations with loyal local listeners and advertisers, and less rigid formats, that will come through the recession best.

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