First EOD Trade…

…soon I hope.

Speculative request for some help, please. Am very new to (potentially) trading and seem to be sinking under a mass of information from some excellent posts on this board. I think I need to reign in some of my reading and concentrate on a few of the basics… not sure how to place a first trade – I’ve opened a virtual account with Tradindex.

Does anyone have some wise words as how to say place an EOD bet on say RBS? (thought about getting to know one share or index really well)

Do many trade EOD? Do you have a portfolio of volatile shares you monitor?

I also currently learning TA – (am reading the Investors Guide to Charting by Alistair Blair, before looking to move onto John Murphy’s ;Charting Made Easy’) and was wondering what tools to use.

For RBS (or any share/index), where is a good place to get a (free) chart from?

Does anyone have examples of their first trades they would care to share?

I’m also interested in the idea of Tea Time Traders (of the DOW ?) but cannot find any posts relating to them/discussing this. Can anyone help?

I work during the day and am keen to play with some virtual money as I begin with reading (including FTSE Beater’s excellent thread) as I believe this will help in my understanding i.e. putting what I read/research into practice.

Well, thank you for getting this far.

SoldierofOne

(Having read through the above …it seems a bit jumbled up; a bit like my brain, as I trying to let everything soak in!)

Well I'm very new to this trading lark, but here's my take on it...

CityIndex have just launched a virtual trader application on their site. I beleive you are "given" a nominal 10K to begin with. See how long it takes you to blow that !!!!

As for RBS.. yep, it's a good share to begin with. 70 pt moves are not unusal. My current, unrefined, back of a fag packet look at a chart suggests long below 13.60, short above 14.70. Hover I would avoid becoming a one trick pony... best learn the techniques and then apply them across other shares, indices, sectors.

With the banks you need to watch out for the sector Index and bear in mind it's currently bank reporting season and that the bad sentiment for insurers will weigh heavily on banks with big insurance interests.

Be lucky.

SoldierofOne

Like you I am new to this game. In roaming around these, and other, boards I have found some useful sites. The two I have found not too intimidating and able to undestand some of the stuff on them, somewhat, with my limited knowledge are:

www.advfn.com
www.ft.com

There are many other sites members have suggested (these two are free) but I have not investigated further until, like you, I have soaked up a lot more info.

It is a good idea to find an experienced trader willing to look at your charts and help you understand the trends, S & R, patterns etc.

Hope this helps
NastyItch

Hi SOO

Before you dive in.....

1. What time frame are you looking to trade over?
2. If your entry point is at the market, what is your exit point?
3. How much money are you prepared to lose on the trade?
4. Can you leave any stops that you want to use whilst you are working?
5. Here is a link to the RBS chart:

RBS

Make it one of your favourites, then it is easy to get to, plus you can just change the epic code to get to another chart - or change the time frames to suit your trade.

6. Here is a medium term chart - until you decide on what sort of trade it is going to be (time frame) there is no point discussing key levels and how to construct a trade plan around them.



TBS

Hi SoldierForOne

I would agree with TBS's questions, and go one step further to say practise trading using the T2W competition. If you can't make money on that then it's best to stay away until you do.

I think it's the best place to practise trading.

HTH

Kaffee and Nastyitch (like the handle!) – thanks for your welcoming comments (this is only my second post); looks like we are starting out at the same time on similar journeys. Look forward to sharing our experiences…

TBS and FTSEBeater – yep, good points and have taken on board. I will look into the T2W competition, but, firstly, as a first ever trade plan, I’d invite comments on the following:

Firstly, I should know my selling / exit point before I trade. Secondly, indicators – just support and resistance (at this stage, I’m currently just reading about the secondary, supporting cast).

Let us assume I have the full amount offered by CityIndex, £10,000. Of this, I am prepared to stake £2,000 per trade and this allows me 5 open positions at a time (if I chose). Max amount I’m prepared to lose is £300; I will assume £30 for dealing costs and stamp duty.

If entry point is market = 1400p (say)

I will place my stop loss at 1200p (thought about 1350p…); I’ll have to look into leaving a stop loss with City Index but would have thought so (as I’ll be working during the day)
Hence loss per share = 200p
And number of shares I can buy is 135 (27000/200)

This then would cost me 135 * 1400p = £1,890, just inside the max position per share

Exit price = 1500p

Risk/Reward = 0.5 (not very close to FTSE Beater’s 3; stop loss of 1350p would give ‘2’)

Perhaps not worth it at this moment in time.

Still, whole point is to learn, so I’ll assume I go for it

Time frame – 2 weeks (I’m basing this on looking at the chart : “trade what you see” ??: is this the way to ‘set a time frame’, or should it be one’s own requirements)?

If 1500p is hit, then automatically close the position and walk away with £135.

What advice would be given if the price is between 1400p and 1500p after 2 weeks? Or is this how long is a piece of string type of question?

(Kaffee – note your entry point and comment about not being a one trick pony; do I presume you have a watchlist of shares each with entry points in mind and you monitor these each evening. If one is reached, research again and if everything looks good, then you trade?)

I’d welcome comments on the above trade plan.

Thanks in advance

SoldierofOne

Hi SoldierOfOne

Definitely, otherwise you can't work out how much your going to be risking on the trade Pretty much, it comes down to whatever you feel most comfortable with That is a risk per trade of some 3% (300 ÷ 10,000 x 100) - It's a little high, I would aim for between 1-2% Correct

See what happens in 2 weeks, but I would say if your trading EOD, then 2 weeks is a short holding period. You've then got to re assess the Risk and Reward to see if it's worth holding on to the share. It might be the risk / reward turns in your favour, or you might be sitting on a share that is going nowhere.

HTH

SoldierOfOne:

I concur with what FTSEBeater says about drastically cutting your risk exposure.

If you are, say, starting with a pot of £10,000 then IMO you should not be risking more than 1% of your total pot on any one trade, and you should not be risking more than 3% at any one time.

That means you should divide £10,000 into £1,000 trades, and wait until the ideal trade comes along which gives you a maximum risk exposure of £100 (1% of the total £10,000 pot).

In an ideal world you would wait for that one to breakeven before placing your next trade on the identical lines. Alternatively, place three trades and wait for one to go into profit before placing your 4th trade. It's best not to have more than 3% of your total pot as risk, exposed to the market.

In this game the objective is to stay in to play again another day. Newbies always do the same - they throw a lot of money at the market and think that they can make more money that way. Wrong! At this stage, you should be patting yourself on the back if you manage your positions as I have explained, to keep your investment pot protected with little exposure.

Unfortunately, the vast majority of newbies don't realise that consistency of winning small amounts is the way to win and stay in this game. It also means that you can have loss after loss after loss (hopefully you won't, but let's look on the dark side) before you get wiped.

I look forward to seeing how you get on!