How do you select your trades and other advice please

This is a discussion on How do you select your trades and other advice please within the First Steps forums, part of the Reception category; mma I am scalping so am using the following settings: with the trend, first move stop 5, target 5 with ...

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Old Sep 18, 2003, 5:00am   #41
Joined Mar 2001
I am scalping so am using the following settings:

with the trend, first move stop 5, target 5
with the trend next move,5,9

Against the trend: 3.5,5

I am using a combination of long term trends in a minute chart coupled with standard deviations to identify when the price has risen/fallen too far. This system warns you to buy within 2-3 points of a short term bottom so I use "Buy at Bid" to get the best price.. - often it tells to buy on a downbar which is immediately follewed by a big upbar so it triggers during the candle.. and instant response is needed.

I always exit on market orders because the settings above usually mean when closing a long/covering short the market is still rising or falling hence I tend to get immediate fills at or better than my target price...
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Old Sep 18, 2003, 11:43pm   #42
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thanks for that but do you mean points or tics ( 1/2 point on Fdax)when you say :

with the trend, first move stop 5, target 5
with the trend next move,5,9

cheers .
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Old Sep 19, 2003, 8:57am   #43
Joined Mar 2001
points and my stops/closures are based on closing prices...
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Old Sep 19, 2003, 9:56am   #44
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Gordon8 started this thread Halfbut

Glad you are a beginner too as will appreciate the anguish, exitement and brain numbing amount of information passing though my ears - all of which seems terribly important to know

I want to swing both ways too on the FTSE (!) - it seems so simple when you read about it but actually doing it is another thing! One of the terrifying things (apart from losing all your money) is navigating around the SB web site and ensuring the bet is opened / closed correctly.

I have just opened an account with Deal4free on the advice of this brilliant chat room, as the spreads are good for the FTSE but the ordering platform is horrendous - I still need to get my head around it. It hopefully will be worth it though as TradIndex who I was using charged a fortune in spreads and won't allow you a guaranteed stop.

I think it is safer to plan making trades over a few days or weeks rather than overnight, simply as you have more time to think.

Any advice would be very welcome

Best of luck

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Old Sep 19, 2003, 10:45am   #45
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Joined Jun 2003

Deal4free is a very good platform, personally I think it is the best out of all the major SB's. The order system seems complex at first, but is quite easy to drive once u know your way around.

1 bit of advice , keep an eye on your order book & back office statements. Not that these should ever be wrong, but as with all , there are mistakes made.....they have made a few on my account .

if u ever notice anything that appears wrong( wrong order, open position that shouldn't be there etc.) be sure to take a 'screen shot' of the blotter or statement where the error is. they will always correct it if u can prove it.

not trying to seed doubt's in your mind, hopefully u will never have to query anything, but this will help if u do.



Last edited by Finlayson; Sep 19, 2003 at 11:27am.
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Old Sep 19, 2003, 4:56pm   #46
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I use deal4free to swing trade indices as well, mainly the S&P 500 and Nasdaq Composite as they seem to suit my current system well at the moment. (I say 'at the moment' cause as far as I know no system works for very long, unfortunately! But it's on my website if you're interested.)

Anyway, like you say it takes a wee while to bend your brain around the initially intimidating d4f platform but it is one of the best out there and designed with common sense to the fore. You'll need a reasonably specified PC and ideally broadband internet to run it smoothly though.

A couple more random warnings, sorry if they sound patronising, but I made all these mistakes when I was learning:

Watch out for your stops triggering unwanted trades - this can happen if you close a position and forget to remove the stop that was associated with it as the stop will not automatically disappear when you close a position. This applies to limit orders as well.

Keep an eye on the notional size of your positions as the quotes can be a touch misleading.

e.g Vodafone is quoted at say 125.50 and you buy £10 a point. If it goes up to 126.50 bid you win £10.

But if the S&P 500 is quoted at say 999.5 and you buy £10 a point and it goes up to 1000.5 you win £100, not £10, despite the decimal point being in the same place.

Or in other words before betting £x a point make sure it's not a much larger or smaller position than you intended.

Be aware of the difference between controlled risk stops and normal stops.
A normal stop is not guaranteed, i.e in a fast moving market the price can plough through your stop, causing a fill at a price less favourable than you had planned for. A controlled risk stop, for which you pay a small spread premium, is guaranteed to be filled at the level you chose, even if, say, the market drops 500 points overnight on catastrophic news.
In markets that are quoted by d4f 24 hours, such as the FTSE, Dow and S&P normal stops are generally safe as any news will trigger an immediate movement in the quote. But in markets that are only quoted during trading hours you could get yourself into a lot of trouble with a normal stop as the market could open ("gap") up or down a massive amount, miles from your stop.

Avoid the temptation to overtrade. All those flashing prices on the d4f screen can be addictive and lead one into foolish, impulsive trades out of boredom. If you are swing trading and not spending every day in front of the PC this shouldn't be such a problem.

Avoid taking a market view. Instead ask "What is it doing now?" If it is trending jump in until it isn't trending anymore. Follow its lead, don't try to make it follow yours.

And for what it's worth a few of my favourite aphorisms -

Look after your losses and the profits will take care of themselves.
Do not confuse intelligence with a bull market.
Be patient and wait for the market to come to you.
Trade well, not necessarily often.
Cut losses quickly and enjoy it. A small loss often results from a good trade. Take profits slowly, but lock part of them in with trailing stops.
Never let a profit become a loss.
Never increase a loss by moving stops.
If in doubt get out.
Risk and money management are more important than trading systems. Paper trade until you have a proven track record.
Ignore technical analysis at your peril, but be aware it sits awkwardly somewhere between art and science.
Do not let ego and emotion cloud judgement.
Though you may strongly feel otherwise, the market is always right.
Don't believe the rubbish peddled by the financial services industry and media.
The trend, often just a rough, obvious line scrawled on a chart, is a lifelong ally - always try to tag along with it.
Read 'Trading for a Living' by Dr. Alex Elder.
Although it is occasionally acceptable to ease into a position in small chunks (e.g buy £2 a point at 100, 97 and 95) provided of course you have stop loss (e.g at 90 in this example) do not ever be tempted to average down. "Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognise the trend whose premise is false, ride that trend, and step off before it is discredited." (Soros)
"Markets can stay irrational longer than most of us can remain solvent". (Keynes)

Phew! Sorry to overload you with yet more information. Keep us posted as to your progress, questions, thoughts etc. - tis what this fine site is for after all.

Good luck :-)

Last edited by frugi; Sep 19, 2003 at 5:07pm.
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Old Sep 19, 2003, 5:25pm   #47
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Joined Aug 2003
Thanks Gordon8
Nice to have a reply all to my own !!!. Yes this web site is the busness and ive really taken to some of the guys that post here. Iwas lucky to have found a really good bloke called Genti who introduced me to this ( hes on the site) but unfortunatley he had to go back to his homeland. He used to make regularly 200pts a week and i think that if you place orders with D4Free you wont go too wrong( he said niavley (I know ive spelt it wrong, but im a number man !!!!!). Ive just gone long with BP based on the lower support line and its appreciation for some historical support at 420. Ive tried to adopt a RR discipline, thanks to FTSEs thread. Until i can remember how to post a chart ,ill have to rely on text > From one beginner to another, tell me what you think as it might be fun for the big guns to read what the infants are saying.
I dont know about you but i find that FA and TA dont mix for me. What do you think

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Old Sep 19, 2003, 5:35pm   #48
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Sorry to fill up this space with NON trading chat , but >>>>>>>>>>>>>>>>JayGE>>>>>>>>>>>> love the picture !!!!
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