newbie trading indices - doing well now 2K loss

Hi!
Well I too thought trading was relatively easy -

Was doing quite well by trading sells on major indices when the red candles appear and also thought I had found a niche by trading USA market s at around 1900 - 2000 when indices seem to go down.... why is that by the way ?

So bumped up the stakes from £1 to £20+ and suddenly started losing - had stops of course but made them far to wide (expensive) and got stopped out losing a lot of money.

I have a high win/lose ratio but my few losses massively outweigh the wins :-(
I know it is possible to make money betting indices - I suppose greed and "arrogance" were part of my downfall... and ignorance hence my post here - any tips welcome !

So I am now trying to look beyond my "See a red candle and sell" technique - though to be fair to myself I do use other indicators (MACD/RSI/Directional Movement) - and try some other techniques.

One possible way I would like to try is trading shares ratheer than indices specifically the SPX 500 (Google, HP, Life Sciences) and targeting lows/highs then buying/selling?

I work full time so cannot spend too much time trading - occasionally I can work from home and tend to "sneak a look" at the markets then.....

Any thoughts welcome - BTW it really is worth looking at USA indices (Dow/SPX) at around 1900 for hot sell spots - seems to happen a high % of the time.

pleaper said:

Hi!
Well I too thought trading was relatively easy -

Was doing quite well by trading sells on major indices when the red candles appear and also thought I had found a niche by trading USA market s at around 1900 - 2000 when indices seem to go down.... why is that by the way ?

So bumped up the stakes from £1 to £20+ and suddenly started losing - had stops of course but made them far to wide (expensive) and got stopped out losing a lot of money.

I have a high win/lose ratio but my few losses massively outweigh the wins :-(
I know it is possible to make money betting indices - I suppose greed and "arrogance" were part of my downfall... and ignorance hence my post here - any tips welcome !

So I am now trying to look beyond my "See a red candle and sell" technique - though to be fair to myself I do use other indicators (MACD/RSI/Directional Movement) - and try some other techniques.

One possible way I would like to try is trading shares ratheer than indices specifically the SPX 500 (Google, HP, Life Sciences) and targeting lows/highs then buying/selling?

I work full time so cannot spend too much time trading - occasionally I can work from home and tend to "sneak a look" at the markets then.....

Any thoughts welcome - BTW it really is worth looking at USA indices (Dow/SPX) at around 1900 for hot sell spots - seems to happen a high % of the time.

Click to expand...

Here is a guide to the process most traders would agree they have experienced in their long and winding path to finding success. As I see it, you are just getting to step 2 or 3.

38 Steps To Becoming A Trader

1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realize we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence.

Fear starts setting in.

8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

Most people will give up at this point, as they realize work is involved.

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realize that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.
30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear), and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Very good and helpful - thanks!

Do you know at one stage 2 weeks ago I was even thinking of quiting my job to trade full time !
Had a bit of a rude financial reality check since then