Fox's noobie journey

Foxwales

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Hey all,

This is my second post here and I've been doing lots of reading. I wanted to share my experience so far so other don't make the same mistake, but also an opportunity for me to post my progress against my target.

My first 3 weeks

So I signed up for an account with IG index and deposited £20.00 to start trading at 0.10p per point. Before placing my first trade I watched the markets and went for the one with most activity, which was Crude oil.

Due to the margin requirements, I found that I had very little liquidity to provide a buffer for Market dips so I topped up my account with another £30.00 giving me a balance of £50.00 to trade with.

I placed my first trade at 0.10p on US light crude and I watched. I had no strategy for entry or exit, I just jumped in. Within 10 minutes my meagre 0.10p had turned into £10.00 profit, so I sold and took my profit. What a buzz!

I spent the next few days trading in oil with a very good success rate, my account was up to £112 by this point so a nice little profit.

I gained some confidence and decided to up my trades to £1.00 per point, which had greater margin requirements, so I upped my account balance to £500 so I could trade larger in oil.

I spent the next week trading oil and watching the other markets with interest. I managed to make over £200 profit on oil and started to look at diversifying my trades; at this point I had very small losses of just £4.00 odd.

After looking at some charts on indices I saw an opportunity to get in and I placed buy orders in the FTSE, Dow and Dax. This proved to be very fruitful and I managed to gain over £600 in profit.

By this point I was trading in various different markets and due to margin requirements making some markets out of reach for me where I thought good opportunities were I upped my account balance to £2.9k.

With this new trading power I started to place buys and sells in the FTSE, Dow, Dax, S&P500 and Light Crude and I again made some profits albeit smaller than previous.

I had it in mind to close my open trades once they were in profit and withdraw my full account balance and profits, with the aim of starting off small again and remaining small. Eventhough I had made a good amount of profit, I felt that I was getting in over my head.

Before I did the sensible thing and withdraw my account balance, I saw more opportunities opening up and decided to place buy orders in indices.

And then it happened
I watched my buy orders go into a nice sizeable profit and all indicators I interpreted told me to hold out longer for the full profits to be realised. So I went to bed quite happy and woke up the next morning.

Switching on the news, Earthquake hits Japan. I log onto IG index to see my once profitable buy orders now in the red and the Market seemed to be in free fall. I quickly sold my trades and took the loss hits. Majority annoyed by my first substantial losses I watched the Market with determination to recoup what I had just lost.

I waited for what I thought would be the Market bottom, earthquake hit, tsunami hit, ok nothing else can happen and stocks will rally. So I placed buy orders. HUGE MISTAKE!

Nuclear crisis raises it's head and the Market starts plunging. So I again accept my losses and close off my trades. By this point all my previous profit has gone and my losses have eaten into my capital.

I again stupidly thought the Market could not go further and during a moment of a small buying surge I jumped in and bought. HUGE MISTAKE!

The Market dipped again and again as reactor after reactor went boom! In order to stop further losses I hedged my bets by opening sell positions on the same indices for the same amount per point.

I have been in this position now for a good few days now and markets appear to be slowly recovering albeit cautiously.

The financial damage from my stupidity? Over £2,900 in realised profits and £5,000 realised losses.

I am left with just over £1200 in my account balance with some trades still open which are hedged, so I have no liquid capital for manoeuvre at the moment.

My mistakes

I got over confident from my run of profits early on and got greedy and upped my point per trade.

I tried to chase and anticipate the Market.

I invested too much capital too early

I revenge traded which was a huge mistake

I hedged my bets instead of taking my losses, which allowed me to capture some profits in the short term, but have provided more losses than profits.

My short analysis
In my short period of live trading I have made 243 trades with a success ratio of 55%. however my losses have been of greater value in comparison to my profits.

My mistakes have been a huge and beneficial learning curve and I have learned a lot about myself and my trading style.

The way forward

I now have a net loss of £2,158.39 which will be my target to recoup. I intend to do this thinking small, using small positions and managing my money and risk much better than I had done previously.

I will manage and realise my losses before they get too big
I will use smaller capital in stages to limit further risk to my money
I will use smaller trades per point
I will not chase the Market
I will wait for the Market to come to me and not me go to it

So be warned, this newb is a noob in a major sense, things can spiral so quickly and the risk you are open to can be very high indeed. I was naive.

Target against loss progress:
Loss: £2,158.79
Progress: £0.00
 
Good luck. I'd advise against chasing any losses though, you need to forget about them, not put them on a chain around your neck. Wipe the slate clean by starting with tiny stakes, and then in a year or 2 once you've proved to yourself you've got an edge, strategy and confidence in execution, then up the stakes. The only way you'll get back those first losses is to forget about them completely while you start afresh.
 
Good luck. I'd advise against chasing any losses though, you need to forget about them, not put them on a chain around your neck. Wipe the slate clean by starting with tiny stakes, and then in a year or 2 once you've proved to yourself you've got an edge, strategy and confidence in execution, then up the stakes. The only way you'll get back those first losses is to forget about them completely while you start afresh.

Thanks, taking what you say I see your point. If I'm chasing my losses then my mindset is going to be affected by working towards this goal. I have some trades to settle and then I'm going to start afresh.
 
Yeah as JRP said, don't revenge trade whatever you do.

If its any consolation I've had days where the open has wiped £2K off my trade within a few minutes.
I had to gulp and take it on the chin, gotta love open gaps :eek:
Always bear in mind your risk exposure first and foremost.
 
Thanks Liquid I'll take your words of wisdom onboard ;)

Take them with a pinch of salt instead, I ain't no guru :)
Keep plugging away, build up the experience, experiment, do lots of reading.
Its a hard slog but put the time in and keep risk in check, thats the best you can do
while you are learning.
I'm still learning as well so don't take anything I say as gospel :)
There is always something new you can pick up and add to the puzzle.
If its handed to you on a plate you don't get the understanding and respect for what can be a harsh game.
Stick with it.
 
I have cut my losses and have placed the following buy orders starting anew, with smaller capital.

21/03/2011
Starting capital £75.75
FTSE 100 - 0.50p - S/L - 15 points
DAX - 0.50p - S/L - 15 points
Singapore Blue Chip - 5.00 - S/L - 4 points
 
I'm not even looking at the charts, but those stops look awful tight.
Death by a thousand stop losses.
15sl may be ok for short term scalp trades (couple of mins).
TBH my best advice would be to do some serious reading on stops and risk management before you trade anymore.

Use search on this site, lots of very good threads already in existence.
Buy some books as well.
If you have trouble finding anything, post back and I'll chuck a few links up :)
 
I'm not even looking at the charts, but those stops look awful tight.
Death by a thousand stop losses.
15sl may be ok for short term scalp trades (couple of mins).
TBH my best advice would be to do some serious reading on stops and risk management before you trade anymore.

Use search on this site, lots of very good threads already in existence.
Buy some books as well.
If you have trouble finding anything, post back and I'll chuck a few links up :)

Yeah, my capital is rather small and the Market has been pretty consistent today, so am watching my stop losses, so far all are now in profit, albeit a small amount. I'll use larger stops when I'm not able to view my trades, but for this afternoon I can manage them so I don't get stopped out.

Still doing loads of reading(y)
 
Yeah, my capital is rather small and the Market has been pretty consistent today, so am watching my stop losses, so far all are now in profit, albeit a small amount. I'll use larger stops when I'm not able to view my trades, but for this afternoon I can manage them so I don't get stopped out.

Still doing loads of reading(y)

Glad to help, ultimately though, you have to help yourself and accept responsibity for all your decisions on your own, which you are doing.

Its not that people are unhelpful, more that no one wants to be too specific and end up taking the burden of of someone elses losses because of advice given.
At least thats the case with me.

Those links are a good start to get you on the right path, put together by people who know their stuff :)
 
Well so far so good, I've stuck to small trades and have chosen my position of entry very carefully and am closely watching my money management.

Closed off some profitable trades yesterday and have taken my account balance up.

Standing as of 22/03/2011
Starting capital: £75.75
Profit: £24.25
Losses: £0.00
Balance: £100.00 (nice round figure) :)

Opened trades
FTSE 100 - 0.50p
DAX - 0.50p
DAX - 0.20p
NIKKEI - 0.20p
Singapore Blue Chip - 5.00p

These are placed against June futures to further reduce my risk if the Market swings against me it should allow time to recover. I have also clearly defined my exit points for each trade.

So far all and sitting in profit and I'm in a positive P/L of around +£30.00 at the moment.
 
I have cut my losses and have placed the following buy orders starting anew, with smaller capital.

21/03/2011
Starting capital £75.75
FTSE 100 - 0.50p - S/L - 15 points
DAX - 0.50p - S/L - 15 points
Singapore Blue Chip - 5.00 - S/L - 4 points


I'm presuming you're aware that 10% of your capital at risk per trade is WAY too much...?
 
For such a small amount of capital I'm prepared to stake more, as I hopefully increase my capital I will lower my stake.
 
Very good post mate, and don't be put off... just be careful! The amount you lost in total i have seen disappear in one bad trade for the same reasons, its a learning curve... instead of doubling up and putting fortunes per point its best to choose a fixed amount.. eg 2-5% of your account, well thats my opinion anyway but i often deviate from that rule tbh
 
For such a small amount of capital I'm prepared to stake more, as I hopefully increase my capital I will lower my stake.
JRP is right.
seriously I would stop as I suggested earlier and do a lot more reading and research.
You're current method is just going to result in IG getting another £75 of your money...
 
Well, after I took my account up to £100 I withdrew £50 and started again, Thursday and Friday have been profitable for me with a 100% profit ratio, bagging me £23.48.

After doing loads of reading my risk is and money management is 100 times better, using small positions and concentrating on a small number of open trades.

I'm not being greedy in that I'm not leaving trades run in the hope of more profits, I'm realising all profits when I determine the Market has moved enough in my favour to not risk locking in that profit.

I'm also sitting on the sidelines alot more waiting for trends to establish and then following the trends, also with the smaller trades I'm making it provides a bigger buffer for when the Market swings against me.

Ended this week with a small but very decent profit in comparison to my capital so am pleased.
 
I made £22.48 today.

Its not that much, but I'm only trading with a £50.00 account so have almost doubled my account balance in the last 3 days of trading, with £46.40 made.

I intend to use compounding if I can keep this consistency going, I will also have to look at my base capital in the long term as I'm still on IG index learning programme my price per point went to a minimum of 0.50p today and will go to normal price in a few weeks, so will use that time to evaluate my progress before I inject any more cash.
 
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