Day Trading & Forex Forum

rsd886647

I've jumped in head first as is my way, learning through experience as I go. I've got 3000pounds bankroll, and I am trading CFD's via IGmarkets platform (limited risk).

April 30th

Been trading 2 weeks now and until today managed to break even despite losing 500 pounds one day. Alas, today I lost 1000 pounds, so I have 2000 left. I am not too despondent, as I have bought into Royal Bank of Scotland with 10,000 shares at 43 pence. They should hit 50 in the next week or so, which will net me about 700 pounds.

I have suffered mostly from a lack of patience and a desire to buy at the opening bell. All too often, I have bought long at the highest point of the day, and short sold at the lowest point as a result.

My first deal was buying Anglo American and Xtrata just about three minutes before George Soros stated that the banks were insolvent, which sent the market crashing. I refused to take a loss of about 300 pounds, so instead watched the losses build up to 1500 pounds. I waited for the market to turn, which it did when the the US treasurer (Greitner) stated that the banks had adequate capital.

I was tempted to buy GlaxoSmithkline on tuesday as the swine flu was moving the share price up. I admit, I did feel troubled by benefitting from such circumstances. I ended up buying long just before the share price started to fall. I lost a couple of hundred. I decided to let it go when I found myself wishing for bad news. I have decided not to buy into such quandaries again.

I made money on Barclays, Anglo American, Xtrata, Kazarkhyms and Antofagasta. I like the miners because they tend to have consistent patterns; Anglo American often follows the ftse index.

I have suffered by having expectations of how Wall St will perform, largely dictated by futures activity, which proved not to be the case, at least in the trading until the LSE closed.

I am excited by the promise of profits, which I can see, but have yet to attain largely because of all my novice mistakes and impetuosness.

I have decided to wait until 10-10.30 am to monitor more properly how the stock is performing and will likely perform that day, and look for a suitable entry point. I also am studying the trading patterns as I go. I am looking forward to one of those massive profit-taking days, where you can't really screw up.

Anyway, any advice is much appreciated. Will keep you posted every now and then.

Rob

rsd886647

May 8th

If the goal was buying at the high point and selling at the low point, I would probably be halfway to millionairedom by now. I made some profits from rbs, but instead of selling at 50p, I got greedy and put my whole bankroll in at 51p. The sp subsequently fell to 42.7p, at which point I panicked and sold, losing much of my roll. I had opened more than one contract in order to acquire more shares, and had to stagger my stop points, so I didn't have any flexibility with moving one of them down a few points if I wanted to hold anyway. Once the first stop got hit and I lost 600 pounds, closing the positions on the others was just a matter of time. Of course, the sp started going up just after I closed my positions, and annoyed by this, I bought in again with the rest of my roll to try to make back some of the losses.

The lessons I learned are to only open one contract per issue at a time. To hold back from buying when it seems like the upward movement will never abate. Instead I will wait for the correction, then buy in at what appears to be a low point. In this case, it was less of a corrections, but more just bad news. Still, I think there is more upside to rbs so I should have held and not let my emotions take control. Another lesson in patience.

I have also decided to concentrate on just four mining stocks that I know well. I am monitoring their accumulation and distribution and feel confident at identifying low points. I will no longer short sell shares, but instead just focus on buying at the low point for a while.

I am also giving up short term trading, i.e. over a day or two, but instead work on trading from low to high point, which tends to be a week at least for the mining stocks at the moment. I am also gathering data to compile a trading index to identify when the market is overbought or oversold, and will attempt to buy in when the market is oversold.

Wall street continues to defy what the futures indicate and I continue to suffer from misplaced expectations, so by not day trading, I alleviate this problem.

I've made some bad mistakes and ignored the advice I had acquired before I started. Now I'm down to the last thousand, I've got to make better decisions from now on.

Pound foolish

Are you cleaned out yet?

"make back some of my losses no wonder they call it spread BETTING"

rsd886647

Yeh I got cleaned out. I shorted rio tinto, which was what my distribution chart was telling me, but the market started the day on a strong upward trend, which wiped my positions out just before the market continued on the downward trend.

I've realised that a big problem has been a lack of capital to ensure that the stop losses allow enough room for normal volatility. I lost 1500 pounds today when the low dipped 1 point below my stop loss before recovering, - unlucky.

So I feel that with CFD's, if you want to bet (yes, bet) on a period of about a week, and you don't have a huge amount of capital, it's best to forget about stop losses and go with your convictions, backed up by charts/research.

I'm looking at seven thousand pounds loss in just a few weeks. It's serious. But I know I have learned a lot.

Forget about very short term swings. Wait for the market conditions to be right. Focus on buying long while learning.

I've taken a loan from my online bank account, and have put the last 1500 pounds I have on Kazarkhyms, buying long at 595 without a stop loss.

It should hit 900 at best (or thereabouts) within the week. Else I may be getting a divorce.

After this comes off, I will play it safe.

Klasse

A bank loan to fund trading???

You're kidding right?

rsd886647

I wasn't kidding. I think I lost my head. I lost my savings of 7000 and am in debt 2000 now. A bad start.

I've made a tonne of mistakes, but I have learned something from each of them. I just wish I hadn't started with such big amounts, but had just done a few small time deals instead.

One positive thing is that I know the charts I am using have some foundation to them. I also know that the simple way is bound to be much more effective for me.

Mistakes I made:

I would buy when the sp was near its low point, but then as the sp moved up and the profits grew, my margin would increase beyond the funds I had in my account. So then I would need to move my stop loss to reduce the margin. Sometimes the stop would get hit as a result. Basically, I was using too big a percentage of my available capital and not setting my stop loss far enough away.

Also, I was dealing in amounts bigger than I was comfortable with when the market turned against me and losses started accumulating. For instance, I would buy at 595. When the sp moved up to 620, I would sell, then buy in again for the full amount at 620. But when the market turned, the losses got big, so I would panic and sell at a loss. If I had just left the original deal alone, I would have been far better off.

I realise that I was gambling too much, trying to predict which way the market would turn ahead of the fact, rather than just going with the market's movements after the fact and the charts. There are no extra points for making the right call ahead of the fact.

So the simple way is to buy just a small number of shares at the lowest point I can, set a stop loss a reasonable distance away, make sure I have extra capital to cover increasing margin (which might be difficult now), and leave the deal untouched until I sell at a higher sp. That way I can absorb corrections with much less stress, and not sell and take losses to boot.

I have about 200 pounds to start with now. It's back to the drawing board. The excitement is over and the hangover is just wearing off.

The good news is that I have identified at least three instances where the distribution charts I have been working with have given me advance warning of a stock price's movement, so I am confident that in the long run, I will make money. It's going to be a long road back from here, but I have confidence and determination.

I am keeping this account for my own benefit, in that I'm trying to remember my mistakes. Reading my past entries, I can already see how I conveniently forget other lessons I have learned when a particular trade appeals to me. I have no choice but to play the safest game I can now.

Oh yeh, any advice would again be much appreciated.

montmorencyt2w

Borrowing in order to trade may be acceptable in certain circumstances: where you have a known edge and a proven track record, but not quite enough capital, for example. However, I think I would prefer to borrow from a trusted friend or family member (who can afford to lose it and not care), than a bank.

If you were in the UK I think I would recommend learning your trade with spread betting, especially one of the firms that allows you to trade for pennies per pip for a limited period. I have no idea what other options are available to you where you are, but while you are still learning, you have to find a way of trading in very small amounts at a time. A demo account might be one way to go, but real money is better. However, it has to be money you can afford to lose.

__________________
Regards,
Mike
--
Still learning my trade.

"Trade what you see", but make sure you are looking from the right viewpoint.

lancehibner

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