Please Help Me with my trading

Hi All,

I'm after some advice and would welcome some help from anyone but especially from the more experienced investors / traders.

I'd like to quickly explain my background (which I hope will give sufficient insight ) to enable maybe some of you to offer me some advice. Apologies in advance if it sounds boring though

I've been interested in trading for over a year now. I've read a lot of TA books and feel I have a good understanding of the different patterns, etc as well as some knowledge with regard to Volume Spread Analysis - (There definately seems to be some milage in this IMO)

Since I started trading I've been trading UK stocks either by buying shares or spread betting.

I work during the day and even though I can watch the screen maybe once or twice a day, I spend most of the evenings analysing the EOD data and making decisions for the following day.

1) My first question is what other markets could I trade, given that most of my analysis work takes place after I get home from work, as I can't really monitor my stocks constantly during the day?

2) Secondly, and more importantly, can anyone suggest a trading strategy that i could employ for trading UK stocks?? I don't expect somebody to offer me a trading system but I could definately do with some good advice.

The problem is currently I don't have any real strategy. I look at certain stocks based either on tips from bb's, magazines, or by running some basic explorations in Metastock such as Price & Volume breakout. I then look at these stocks and using TA decide whether they are worth trading at that time. I also sometimes spend time researching some of these stocks but as to which ones I spend time & effort researching is probably more a case of luck that reasoned judgement!!!!

So far to date, its apparent that I'm not picking the right shares to begin with.

I understand (through reading this site & Many Thanks to Trade2Win) all about stop losses, risk:reward ratios, etc, etc but i seem to be getting stuck at the first hurdle!!!

Would I be better off sticking with UK stocks or maybe moving onto other markets such as indices??

I'm not scared of hard work and am quite happy to dedicate as much time as is required (as I really enjoy trading) but I could really welcome some help in how to go about choosing better stocks in the first place.

PS. My apologies for the long ramble....................


Many Thanks,

Chorlton

Chorlton,

Its hard to say where to start there is a long road ahead of you probably involving lots of frustration and loss of money, but when you actually become successful you will look back and not understand why it took you so long.

We were all beginners once and i know that when i started out i spent all my time searching for a system that would make me (x) amount. First bit of advice, give up on that, you will waste years fiddling with indicators and backtesting ideas, some will look good some wont but when it comes to trading chances are you will always lose.

You say you have read lots of books so you already know how to trade, there are no secrets that only successful people know about, you just have to learn to apply what you know.
There is nothing concrete i can tell you because trading is very individual but if i had to give a few of the most important points in trading that turned me from a newbie to now profitable and professional its:
1/Learn everything you can about support and resistance
2/NEVER EVER trade against the trend
3/Only ever risk 2% of your captital on a trade
4/ Decide a sensible stoploss that gives positions time to grow in the way you expected them to, market noise scares most newbies into closing FAR to early, i trade forex and never have less than a 20 point stop loss even when trading on a 5 minute chart (point 4 is the hardest thing you will learn because it only comes from learning the product you trade inside out)

Hope that helps,
Tom

p.s these tips are assuming you want to be a trader rather than investor, i imagine a lot of the same rules apply in investment but i dont claim to be an expert on buy and hold approaches to stocks

Thanks Tom,

I acknowledge that there are no "get rich quick" methods but I do seem unbelievably frustrusted at the moment.

Your tips are gratefully received. I fully understand why you've mentioned point 1 and I will further research this.

Point 3 about never trading more than 2% of your capital is unachievable for me. I understand the importance of minimising exposure to any one particular trade, but for me, I only currently have 10k capital to play around with - (Just a newbie trader I'm afraid!!!). As I'm trading UK stocks, my minimum trade needs to be about 1k otherwise due to spreads and trading costs, I need to be making 5-10% just to break-even!!!!!!!!! At £200/trade this would be virtually impossible!!

The reason I asked about whether i was trading the right market is that nearly everyone I read about is trading other markets other than the UK stocks. ie. Indices seem very very popular. I'm not sure why this is the case, maybe because its easier to monitor as opposed to numerous stocks but who knows!!!!!

I would like to continue to trade the UK market especially the "penny" shares as I feel some worthwhile rewards can be found. However, trying to find any useful material on how to trade these highly volatile stocks is hard to find.

I'd welcome comments from those who are trading in this manner regardless of how successful or not they are at it.

But once again, thanks for your comments & good luck to you too Tom,


Chorlton

It sounds like you need this: http://www.trade2win.com/knowledge/trading-plan-template

Read the associated thread, as well as its precursor: http://www.trade2win.com/boards/showthread.php?t=12585

chorlton - im sure wen he says risk no more than 2% of your pot he means if your portfolio is 10k, make sure you lose no more than £200 on any trade. so if your entry is 100, and your stoploss is 95, you would be able to buy 4000 shares before commission/stamp if not doing cfds. obv after commisions the amount you buy would be less

Yes that is right blackmamba,

Also Chorlton, i would be very careful if you are trading penny stocks, if you are interested in "investing" build a protfolio of maybe 10 stocks and only have one or two penny shares, they are VERY high risk and the wide spread makes it virtually impossible to profit it form unless they have some amazing news release. As i said before i'm no expert on investments i'm a trader.
If you are serious about "trading" i would look to move into trading futures or forex, these markets are highly liquid and dealing costs are kept low so you can be successful at short term trading, they also move a lot in a day (average move on eurodollar is 100 points a day) giving you plenty of opportunity to profit).
As for your starting capital, 10,000 is fine, thats a good amount to start with (provided you remember the 2% rule)

Thanks Guys!!!!

I realised my mistake regarding £200 & the 2% risk rule only after posting. It was still early morning & i was half asleep!!!! :-s

I have no experience with trading futures or forex, so my apologies if my questions are a bit stupid but would it be possble to trade these without having to constantly monitor them during the day??? With the exception of today, most days at work result in me being away from my screen.

I need something which I can analyse and choose during the evenings and then when the markets open allow my limit orders & stop losses to keep my trades under control. Hence why I've been quite interested in spread betting recently. I can set up my opening orders (entry points), stop losses, exit points in advance and then leave them alone. However, should I get the opportunity to monitor them during the day I do so but its not a necessity. As I need to choose stocks in advance of the markets opening (and before any potential news coming out) I use predominately chart patterns and the relationships between the price & volume (VSA) to choose which stocks to trade.

I will try and get some more info on trading futures & forex, if you believe it would suit my trading style.


btw: Thanks Blackcab for the link. I'm going to take the time to read this thread


Chorlton

Bottom line is trading is not something you can do well on the side .

Like this you might as well , just buy and hold stocks you fancy or do the same with unit trusts.

Valid Point StockJunkie,

I would prefer to keep a watchful eye on my trades. Consequently, I think I may have a look at US stocks. At least then I could realistically keep a close eye on them & trade them (at least between the hours of 6pm-9pm UK time)

I will probably use spreadbetting as a means (a least initially) to trade in this manner. Consequently, can anyone recommend a good way of monitoring these via a graphical form??? At the moment, (with my current trading) I use EOD data in Metastock and also a couple of web sites to monitor the daily movements.


Sorry for all the questions...............

Thanks,

Chorlton

Chorlton
I dont trade shares/stocks
Why? Because there are too many of them,all influenced by a multitude of factors beyond my knowledge.
As you have never traded before the first thing you need is a market to learn to trade on.You need to learn your market,what moves it and why.Spreading yourself across a range of stocks will not achieve this.
This remark does not apply if you have a specialised knowledge of one aspect of the market,if you have concentrate your efforts there.
Trading is all about timing,however you apply your trades be it chart indicators or fundamentals its still all about timing.
This is what you need to learn.You have already predefined the time scale you require to trade.This creates a problem in that what you really need to do is buy/sell sell/buy at a profit/loss as many times as you possibly can.This is how you learn how we all learnt.
So a compromise is required.
What is required is a slow reacting but still moving market.
Stocks.One announcement can move the market and as previously stated too diverse.
FX A possible if trading swing, by definition of your time available intra day not an option.
Commodities.Where the action is at present,but that creates volitality and requires monitoring.
Interest rates.This is an area of trading that gets scant attention on these boards.Of all the reasons markets move the biggest single factor is interest rates.If I was starting today this is where I would start.Learn all you can ,trade them through which ever instrument you select,trade them in different economies,get to understand them and they will unlock the doors to being successful in other markets.No easy task but eventually you will reap the rewards.
This generalisation may be not what you were looking for.
Therefore I will be specific
I am currently concentrating on Canadian Dollar/US Dollar
I make between 2 and 10 trades a week if you require more information PM me.

Chorlton said:

The problem is currently I don't have any real strategy. I look at certain stocks based either on tips from bb's, magazines,

Click to expand...

Try to avoid looking at bbs and magazines for tips.
Unless you are going to do the opposite to what they say



Good luck with your trading

Chorlton said:

The problem is currently I don't have any real strategy. I look at certain stocks based either on tips from bb's, magazines, or by running some basic explorations in Metastock such as Price & Volume breakout. I then look at these stocks and using TA decide whether they are worth trading at that time. I also sometimes spend time researching some of these stocks but as to which ones I spend time & effort researching is probably more a case of luck that reasoned judgement!!!!

Click to expand...

Get hold of "Trading Day by Day" by Chick Goslin (cf thread elsewhere on these boards)

Forget about any specifics he mentions (50day/49day average whatever) but rather take on board his ideas about using long/medium and short term indicators using the former two to guage direction and the latter to get your timing right.

Chorlton,

My advice would be to trade to acquire skill rather than to acquire money. Try to forget about dollar/pound amounts in the early days.
Do this with the smallest possible share size possible so that while learning you will minimise any losses during the sometimes long learning curve.

Easier to say than to actually put into practice.

Good luck.

EK1 said:

Chorlton,

My advice would be to trade to acquire skill rather than to acquire money. Try to forget about dollar/pound amounts in the early days.
Do this with the smallest possible share size possible so that while learning you will minimise any losses during the sometimes long learning curve.

Easier to say than to actually put into practice.

Good luck.

Click to expand...

Couldn't agree more. Read, learn, read, learn. Then paper trade until you as consistent as possible. Then trade small until you are confident and consistent in real time with real money. Consistency in success is vital.

Thanks to all those who posted comments. I shall take on board the points mentioned .

Cheers Guys,

Chorlton

A Dashing Blade said:

Get hold of "Trading Day by Day" by Chick Goslin (cf thread elsewhere on these boards)

Forget about any specifics he mentions (50day/49day average whatever) but rather take on board his ideas about using long/medium and short term indicators using the former two to guage direction and the latter to get your timing right.

Click to expand...

Hi,

Read some reviews regarding this book. All of which were very positive!!

Consequently, the book is now on order........... Looking foward to reading it........ :cheesy:


Cheers,

Chorlton

agree on the time aspect. ie you will know pretty soon if you and it are to be wed. if you are around at the back end of us session then maybe "short term" might be a better option , not spreadbetting though.

crikey so much depends on who a person is and what you may learn or be shown as to how long things will take....... be realistic, allow a chunk of your life.

It really is difficult to know what to say.. If you was a mate i'd say go and research and come back with answers to..

trading....what are we trading.. whats it about your perception.
What are the objectives
why certain markets .
why different time frames for different people.
What are the objectives
why me.
and finally what are those objectives again.........

Of course a lot will be very subjective and I dare say some have never thought about it , or in any detail, but you may encourage and promote a very healthy spunky attitude from within if you at least gain insight into the essence of the business,necessary to drive yourself through the proverbial brown stuff.

Enjoy The Trip.

if you're end of day trading stocks have a look at this list
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=public&cmd=show&disp=RED
new's picks are interesting and generally the top rated posters are worth reading.
http://www.decisionpoint.com/TAcourse/TAcourseMenu.html
is a selection of excellent clear introductory ta articles
enthios.com
loads of good ta thoughts above, check out market structure and price action articles
price and volume thread here by dbphoenix good for stock traders
the goslin book good for futures and things which trend strongly but think you'll need to bring in more volume analysis for stocks
Respect your stops and good luck!

fxmarkets said:

agree on the time aspect. ie you will know pretty soon if you and it are to be wed. if you are around at the back end of us session then maybe "short term" might be a better option , not spreadbetting though.

crikey so much depends on who a person is and what you may learn or be shown as to how long things will take....... be realistic, allow a chunk of your life.

It really is difficult to know what to say.. If you was a mate i'd say go and research and come back with answers to..

trading....what are we trading.. whats it about your perception.
What are the objectives
why certain markets .
why different time frames for different people.
What are the objectives
why me.
and finally what are those objectives again.........

Of course a lot will be very subjective and I dare say some have never thought about it , or in any detail, but you may encourage and promote a very healthy spunky attitude from within if you at least gain insight into the essence of the business,necessary to drive yourself through the proverbial brown stuff.

Enjoy The Trip.

Click to expand...

hi,

going through the same as u m8, but found this site on my travels. its a free course, but is quite good.

http://www.stockmarket-course.com

hope this helps!