when i started out, i did not trade for 2 months, instead, i sat for hours staring at the screen, learning how and what affects the share price. while i was doing this, i was reading books, to get some background on the stock market in general, but also technical analysis and fundamentals etc. but i knew i wouldn’t truly learn until i did it myself.
so nearing the end of the 2 month period, i started paper trading (basically writing down which way i thought the price would move, how much it would move, and roughly how long it would take) my 1st few estimates were close to the actual markets, but i was also making mistakes, thinking a price would go up when infact it would go down, i found it difficult to figure out what/why it did that. so i took a breather, and left it for 2 weeks. returned to it and got out the graphs, layered on everything that was going on at the time, and learnt why it did what it did.
after that i started trading with real money (when i started i traded ordanry shares).. i started real small. using tiny amounts of money, aiming for small profits (covering costs). i made £80 here and there, but lost more than i made- about £200 overall (which isnt too bad but its still a loss).
i then took a step back and decided on a basic strategy, and changed my investment type to CFDs, i was gonna go for it and see if i could do it.
My first CFD trade was on Tesco, it was operating in a nice range, and i bought in at the bottom, as it changed direction, i dont think the entrance to the trade could have been any better. the shares went up nice, to near the top of their trading range, i sold out just before it hit, as i suspected it would reverse before it hit its upper range. i made a tidy £500 on the trade. but the shares continued rising above their previous high, but not for long, and they soon fell sharply back down.
my next trade was on LLOY - it went up by £150 on the 1st day, but the next it just plummeted, and i lost 200 quid, Stoploss.
Overall though, although i started out a bit shakey, i have made back my money in the last 8 months or so. and have made £800 overall profit. i am very happy with that, esp given my small capital (a problem with being young) and i expect the next 12 months to be better. less and smaller losses, and more and bigger gains.
we will see.
i am currently setting myself up for this new year (im using the calendar year to gauge things on)
setting up a new and better account, with a modified trading plan, and stricter discipline.. that i learnt the hard way.
never be greedy, or hopeful. no good holding onto losses, and no good praying for the stock to rocket. it wont happen, you just loose more, while someone else (who obays the market) makes money.
i see it as the market is a large bolder, running down a hill, if you try and push it back up the hill, you and your capital will just get crushed, instead jump to the side, and live to trade another day,
Matt
