Day Trading & Forex Forum

danpayne

Ive been learning "trading" now for about a year or so , started with a small account
and use cmc markets I have had some fantastic trades and some dogs (havnt we all)
however I seem to be going nowhere , over the last year my account stands £100
down on the year , now I know considering I have only 1 years experience alot of
people would say thats not bad for the 1st years trading I accept there is alot to learn and like they say"every days a school day" but i am now thinking that perhaps I would be better off buying the shares rather than spread betting them .
Problem with spread betting the trade crystalysis on a daily basis, forcing a nimble trading aproach any thoughts ?

amnonco

spend some time learning a bit money management...
you can really maximize your trading using some basic rules that will help trade more efficiently - moneywise.

and BTW - a first year with no loss - IS a great achievement - be glad, and move on.

demeanor

hi there !!

I think you still need to spend some time learning as experienced traders are being tumbling down in this recession,

so since you are learning, its better to learn to become perfect and then try investing...

danpayne

When I started trading live so to speak, I knew I would always be learning for the rest of my time trading days (years hopefully) and money management is one aspect I totally understand , whenever I look to enter a trade I insist on a 4 to 1 ratio at the very least and the maximum risk is religiously 1% Never chase the market blah,blah,blah dont want to drive you mad with my criteria long and short of it is my money management in my opinion is 2nd to none . I guess when all things considered starting trading at the begining of global credit crunch didnt help my trading , started with a shares isa pre-crunch and the concept of going short had never occured to me by low sell high was my game plan back then and did have a few losing trades to say the least, lost 65% of my initial investment
Then quickly swicthed from buying shares to spread betting and quickly with my new found choices of short and long the market have over the last 7 monhs got my account back to a situation where I am actually £100 up on the year . I know that isnt no get rich quick time frame but Im happy wiyh it and considering I only trade 1 day a week at the moment I like to think its now going in the right direction (for the moment)

I think the key is accept We will all be learning this buisness every day for as long as we trade none of us totally know everything , if we did we wouldnt come on these chat boards We either come here to learn or attempt to thump our chest, the latter is easy to spot fortunately
asking questions looking for a response its good to be prepared to learn together
I look forward to talking about and sharing opinions and phylosophy on peoples trading
Even if it may be something , no especially if it is something a little different from the norm after all we are all looking for an edge arnt we ?

tomorton

Hi danpayne - First thing to do is ensure your losses are minimal: chase them down, don't try to chase profits up, not yet. Yes, you must ne able to go short as well as go long in order to make money consistently.

Your money management sounds well informed, but I have one slight quibble on your r:r ratio of 4:1. You don't say how you identify this - it really should be something the TA tells you, you can't just decide you will only take profits when price reaches 4 x the distance to your stop loss. The TA will tell you the probable profit target, the stop should be at the closest point to entry that will confirm the probability has shifted such that you are no longer likely to reach the profit target. Clearly, there is no point me saying to myself that I will be short on the FTSE100 with a -2,000 pt target and therefore a +500pt stop, as the TA does not support my r:r plan.

Now, if you seek out only TA situations that give you 4:1 or better, that is fine, though it seems very demanding. Do you find that many of your losing positions do go into profit, only to be closed later when they trigger your stop?

Pound foolish

For what it's worth, I have bought shares low and my current holding, even allowing for a Woolworths toatl wpie out and another suspended I am £2000 up on six months on a 7.5k total investment.

Not bad for a novice!

danpayne

seeking them out is demanding, but dont get me wrong I never neccesarily take profit at that point thats my min profit look , I always try and let them run I did used to get stopped out and the it ran on to what would have been profit until I discovered confluence trading I do use t.a various styles cause like I said I really am still learning at the moment Im like a sponge trying to take all on board and filter out what doesnt suit my personality and remembering always th kiss rule At the moment one of my favorite set ups is to trade based on confluence also looking for the appropriate candle as part of the trigger signal with my stop the other side of confluence there are other criteria that if present with confluence levels such as a pivot point or resistance level etc,that make for a safer stop loss . my r/r of 4-1 I have strict rules and try to remain as emotionally detached as I also pattern trade and have recently finally accepted the best way(in my opinion) to trade patterns is always trade the retracement rathet than the the breakout ( would like your thoughts on this) this allows a much better r/r than tradibg the breakout how many times have we all traded the b\out and then it imediately retraces to allow a much calmer more thought out entry point
The only time I may drop the r/r is if I trade live on the intraday cause I see a quick move
the set ups I trade at the moment are divergence,patterns,breakouts and since one month ago started looking to trade trends.
If there is any other trading styles you woul suggest I would certainly like to look at that style

tomorton

Hi danpayne - Nothing wrong with seeking confluence to help identify a low risk entry point. It should also, as you say, help identify the stop position if things don't go your way. Yes, I am also averse to trading break-outs as if it is from resistance, you are automatically buying at a new high, vice versak if from support - I think the old rule should be observed, buy low, sell high, rather than buy very high, hope to sell even higher.

But I do think going short on a retracement from a reistance level is high risk. All trends have retracements, but most retracements exit into ther original trend. So its probably just a retracement, not a reversal. On the other hand, if you mean going long after a retracement but below the resistance, yes, I would agree with that. But I would look to be out before the resistance so that makes a 4:1 r:r unlikely.

I never trade on divergence, though I look for it to confirm direction when there are otherwise opposing signals, and to size position. This is because I only trust my money to price and price patterns, which usually means trading with the trend. For several months I have only been trading the FTSE100 index, both daytrading and swing trading. Swing trading is where I am making money and I have almost completely abandoned the intra-day stuff. It is certainly viable to monitor just one market for one pattern and just trade that, long or short.