Day Trading & Forex Forum

Benjameanie

Hi All,

I started looking into this trading malarkey at the weekend and have found myself quickly hooked. I just wanted to post an outline of what my initial plan of attack will be so I can hopefully get some feedback on any major flaws in my thinking, or anything you think I've overlooked.

Here goes:

* I plan to spreadbet FTSE shares and major indices, focussing on a group of around 10 that I will become familiar with in the first few weeks, then gradually expand my horizon.

* I work during the day, so I will spend 1-2hrs in the evenings looking for positions to hold for around 1-5 days.

* I will primarily pick positions by identifying reversals, using a handful of the commonly used chart analysis tools but focussing on learning to read candlestick patterns. I will also look out for larger movements indicated by triangle, head and shoulder, and double top/bottom patterns.

* I will trade on whatever looks good at the time, rather than sticking to a rigid system. This means taking positions when I feel I know the direction the market will take, and getting out when I don't.

* I am using charts from ProRealTime, get most of my information and advice from T2W, and have set up demo accounts with Trade Fair and Capital Spreads - the latter of which platforms seems less buggy.

* When I'm making consistent pretend profits, I will open a live account with £300, all
of which I expect to lose over the course of 2-6 months.

* That will give me the motivation to implement a more rigorous system. This sounds dumb, but there's no way I'm going to believe I can't win without a system until I've lost actual money.

* I will aim to double a stake of £1000 on a second live account within 6 months of opening it by making 20 trades/week, risking £20/trade, averaging a £2 profit per trade. I'm probably getting ahead of myself with this last bit, but making money is what this is all about for me.


All your thoughts will be appreciated.

Kind regards,
Ben.

GammaJammer

Two thoughts Ben

1) Any plan only works if it's truly your own imho.

2) The main thing is to have structure (which you appear to have) and yet be humble / self aware enough to admit if you're getting something wrong (both at an individual position level, and also in terms of your whole approach).

I personally think you're on the right lines. As you're going to trade equities, my only other specific advice is to become familiar with techniques that incorporate traded volume, as they can be powerful allies in that market.

Good luck

GJ

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"That which doesn't kill me makes me stronger"

foredog

do you mean that for every trade you will have a stoploss 20 points away but take profit at 2 points? If so thats madness as for every 1 bad trade (and they will happen) you need 10 good ones just to breakeven......

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Thinking of paying for a course, read this first http://www.trade2win.com/boards/gene...tml#post707344

My blog of a simple GBPUSD system http://simpledibs.blogspot.com/ or here http://www.trade2win.com/boards/trad...side-bars.html

raysor

Out of all the waffle (or delusion) this seems to me the significant bit. Surely the attitude is "I have £300 or £X to trade with. I will try my damndest (and more) not to lose a penny of that money"

What does that require? Knowledge, patience and luck. If you have any of these in small amounts you will quickly lose. Solution: Don't start yet! If you have these in reasonable quantity: You have a slim chance, or will extend your trading life. If you have these in great quantity you will win (no doubt).
If you are going to trade equities I would forget technical analysis, instead concentrate on gathering knowledge on a bunch of stocks/sectors: Their history, management, product, relation with global economy etc.etc.
It seems that beginners always start with technical analysis. They believe there must be a "system" that will work if followed methodically, if all emotion could be banished. Unfortunately not!

simmo303

Forex Currency Trading Online - Forex: Foreign Exchange (FX) Market

Patience! Read, mark, learn. Patience.

Why spreadbet?
True, profits - if any - are not taxed. But you pay for that by a wide spread.

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"Be reasonable - agree with me."

barjon

If you're going to open such a small account you may as well trawl around to find a company that will stick some money in your account to start you off. This one Financial Spread Betting | Spread Betting Accounts | ETX Capital advertised on here recently to give you £100 to start and there are others about.

cheers and good fortune

jon

Benjameanie

Thank you all for your advice - some interesting points.

Raysor, I'm committed to using technical analysis, partly because I'm a data analyst by profession, partly because it seems to me that trading opportunities based on fundamentals are relatively rare, so I would need to be more familiar with a wider range of companies than I think I'm capable of. Given this, perhaps stocks aren't the right instruments for me?

Foredog, I meant that I expect I expect to average a £2 per trade profit, based on a £20 risk, and limits set at whatever level seems sensible at the time. I've no idea if this is reasonable though.

Simmo, I chose spreadbetting as it seems to have the lowest cost per trade for small stakes. Is this not right?

Thanks once again.
Ben.

simmo303

Mini or Micro account. If the spread is wide then the market has to move that difference just to break even. Keep an eye out for the times when announcements are made. That babypips site is well worth studying. Objectivity is needed!

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"Be reasonable - agree with me."