strategies

hi guys, well i opened my demo acc with capital spreads and lost nearly a 1000 of the 10000 allowance on my first day.

I have read there are strategies and systems people use that are widely available. I know that most ppl dont want to give away their winning formula but if there are any well known methods maybe they could post links to them?

To be honest, i didnt have a clue what to bet on and which way and how much to bet and what to set the limits to. I looked at market analysis before i traded to get a rough guide of whats happening in the economy but i didnt know enough.

Is it better to focus of one trading component such as forex or commodities and try and learn as much as poss about the market in order to know which way to bet?

Im sure most ppl start of like this so it would be great if the veterans can help us newbs.

thanks

I don't know why people are so reluctant to share their winning strategies, unless they operate in a market that is so small that any increases in the same approach would lead to their edge being neutralised by SB company or other traders etc. Hard to think that even the combined weight of the esteemed T2W membership wouold be able to manipulate the FTSE100.

Get hold of a simple strategy and test it until you understand a) how it works in all eventualities (shouldn't take long with a simple methodology, as the market can only go up, down or sideways), and b) how you would react to each eventuality - this is much deeper stuff, and once you know this, be aware that your reactions will change when you put real money in.

Will somebody offer this new member a simple, low risk 'starter kit' strategy?

tomorton said:

Will somebody offer this new member a simple, low risk 'starter kit' strategy?

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3 Ducks. http://www.trade2win.com/boards/forex-strategies-systems/26464-3-ducks-trading-system.html

http://captaincurrency.blogspot.com/2007/01/3-ducks-trading-system.html

You might check out Malcolm Pryor's "The Financial Spread Betting Handbook".

It is not too expensive, and should certainly introduce you to the basics, and as it is aimed at spread-betters, you may find it more directly applicable than some of the more general trading books. The first edition may now be a bit dated in terms in certain respects (SB firms have changed what they offer over the years, generally to the clients' benefit), but it should be fine for the basics.

I see from Amazon that he has come out with some more recent books as well. I haven't read those. It might be best to start with the original one in any case.

But check out the reviews.

(I notice that there is also a fairly pricey DVD. It may be worth it; it's a bit cheaper than his regular day long seminar, and of course you can view it as many times as you like. But I would still read the book first).

sheeru said:

To be honest, i didnt have a clue what to bet on and which way and how much to bet and what to set the limits to. I looked at market analysis before i traded to get a rough guide of whats happening in the economy but i didnt know enough.

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Which means you should bet no more than £1 per point and preferably nothing until you have a vague idea what's going on. Unless you like punting. Go for red on a roulette table. Wait, black. No, red. Er, black... um...

As I posted on another newbie thread today/yesterday, check out forexfactory.com and look for the Jacko thread.

shadowninja's right - Don't trade until you know what the market MIGHT do after you enter and what you WILL do as a result. Once you have a system, back-test and paper-trade until you can see what would be the outcome of 100 trades following your plan: until you can see the outcome of 100 trades, don't do even 1. When the plan passes the initial selection test, start very small until you are consistently profitable, then slowly increase stakes. Money managament is key: there are lots of systems that will make money, poor money management is the 'system' guaranteed to take you out of the game.

tomorton said:

I don't know why people are so reluctant to share their winning strategies, unless they operate in a market that is so small that any increases in the same approach would lead to their edge being neutralised by SB company or other traders etc. Hard to think that even the combined weight of the esteemed T2W membership wouold be able to manipulate the FTSE100.

Get hold of a simple strategy and test it until you understand a) how it works in all eventualities (shouldn't take long with a simple methodology, as the market can only go up, down or sideways), and b) how you would react to each eventuality - this is much deeper stuff, and once you know this, be aware that your reactions will change when you put real money in.

Will somebody offer this new member a simple, low risk 'starter kit' strategy?

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I've put a couple of charts on the Swingin' FT 2010 thread. That, I think is a valid trend following method. However, you Tom, being a frequent suscriber to that thread, yourself, will know that it has serious flaws. I was not able to catch that fall, yesterday, for instance, although I suspected that it could well happen. Fine tuning these systems is, very much, an individual's personal contribution, or edge, and no manner of explanation will explain it, exactly, to anyone else. That is the way the mind works and that is why systems disappoint, especially when they have been paid for.

Well it's true, any system that can be learned has to be re-built and re-learned for the specific individual's best use, and you never stop learning in this game. Money management is even more important than the most excellent entry, and this hinges on risk tolerance. One person's accceptable risk is another's nightmare. But a straightforward system that has an objective logic behind it is an essential starting point. Cheers.

thanks for everyones comments, im going to follow up the recommended links and Malcolm Pyors book which has been recommended to me a a few times now. Im gonna strart reading the times/telegraph, and their business sections as often as i can in order to be familar with the markets and media speculation.

Take the media with a pinch of salt of course but you can get a certain amount of free info from ft.com, and the business section of the BBC News website is also free (for now ).

As you seem to be interested in markets, and as you have mentioned Forex and Commodities, you might find Ashraf Laidi's site interesting. (He is doing a free webinar Sunday midnight (I guess that is for the benefit of the non-UK audience although he is actually based in London). Don't just follow his calls blindly (don't follow anyone's calls blindly, in fact don't follow anyone's calls full stop (especially not mine ). The important thing is to try to understand the thinking begind the calls, which you might agree with or not. At the end of the day you are responsible for your own analysis and your own trading decisions. The buck stops with you.

I just looked at the 3 ducks strategy.. looks nice and simple will have a closer look at soon but just a bit overwhelmed at how much i have to read in order to get any sort of gasp of SB!! Will order that malcolm pryor book to. thanks guys

tomorton said:

shadowninja's right - Don't trade until you know what the market MIGHT do after you enter

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Don't trade until you know what the market MIGHT do after you enter ? Thats a bit of a stupid statment

When I enter I KNOW IT MIGHT move up down or sideways what else MIGHT it do ? go for a burgerking and catch a late night movie!

Xenophobia said:

Don't trade until you know what the market MIGHT do after you enter ? Thats a bit of a stupid statment

When I enter I KNOW IT MIGHT move up down or sideways what else MIGHT it do ? go for a burgerking and catch a late night movie!

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Yes, I didn't explain very well, I was being brief. Price might only do one of three things but the point I wanted to make was that you never know on which position it will do any one of those three things, nor how dramtatcailly. Newbie traders always think that when they go long, price will go dramatcially up. They can be shocked into poor decision making when this fails to occur, and if they haven't planned their position management all sorts of unpleasant outcomes might pop out of their heads, like - doubling down, turning the computer off and going out, getting another credit card for more margin, moving the stop further out. Price might do something ghastly, but you have to know you won't!