Still confident but slight doubt creeping in!

[kimo'sabby]

The spread I have at present, which may be better when the exchange is open, is 1.22 pence. My limited knowledge suggests that that is fine. What about that takeover it's just done? Will that affect profits in the near term? In any case, I'm leaving share selection to you guys! Lately, I've been on indices so as to avoid all that and just watch a few favourites. Nothing wrong with it, just my age and inclinations!

He's 20 pence to the long side at the mo, i do not know the average price he is in at.

Why is he short and long in one market?

 

[bigal60]

He's 20 pence to the long side at the mo, i do not know the average price he is in at.

Why is he short and long in one market?

Hi

the honest answer to that is I'm not sure; perhaps this is not one of my brightest plans?
Anyway the two sells I'm currently trading are short term trending down - but then again what isn't at the moment? If this is not a good thing to do then I guess I've learnt another lesson! Big Al

 

[kimo'sabby]

Hi

the honest answer to that is I'm not sure; perhaps this is not one of my brightest plans?
Anyway the two sells I'm currently trading are short term trending down - but then again what isn't at the moment? If this is not a good thing to do then I guess I've learnt another lesson! Big Al

Al,

You do what you want to mate. If you have a conviction to the upside, then size that way.

If you want to take smaller shots to the downside then so be it.

Just don't dilute your original position.



Kim.

 

[shadowninja]

here's a trade I'm thinking about next week so please tell me what you think; is it reasonable, plain stupid or genius (the latter being very unlikely!)

BUY BRITVIC WHEN PRICE REACHES 480 (CURRENT PRICE 460) @ 0.20p GUARANTEED STOP LOSS 40

I've done some research, checked the 200/400 SMAs, etc., etc.

What is your reason for being in at 480? If we're looking at price levels, then I'd say 450 is a previous resistance so should be a good place to go long with a stop size of 40. Personally, I wouldn't bother about GSL but I don't trade equities so don't know if it's more useful for holding overnight. That said, looking at IG's quotes right now, it's only an extra 1 point on the spread so not really a problem.

 

[Shanghai]

If you have been trading for 5 weeks then you have been trading in a really volatile market with large percentage moves in both directions on an almost daily basis, at least for the past couple of weeks. Hence due to the market conditions you will very likely get stopped out as you have found. This doesn't mean that your trades have been poorly thought out, just that you are probably trading under market conditions that don't suit your trading style. The past two weeks at least have only been day trading markets in my opinion. I know of several serious well capitalised traders that have been sitting on the sidelines recently because of this.

Therefore if I was you I would spend a couple of weeks researching and backtesting under a range of market conditions and waiting for the current market to calm down a little. Otherwise you could find that you continue to be whipsawed out of both your long and short trades.

 

[bigal60]

If you have been trading for 5 weeks then you have been trading in a really volatile market...

There's no doubt that this has contributed to my recent run of losses in very large part; also having done some checking I now realise that I have been using very tight stops in the market conditions you describe. Somehow I've picked up on the idea that you should ALWAYS use tight stops to minimize losses and to allow you to use a 3:1 risk reward ratio (hope that makes sense?)..

Many thanks for advice/suggestions from contributors who've taken the time to help a beginner in SB, Big Al

 

[Shanghai]

There's no doubt that this has contributed to my recent run of losses in very large part; also having done some checking I now realise that I have been using very tight stops in the market conditions you describe. Somehow I've picked up on the idea that you should ALWAYS use tight stops to minimize losses and to allow you to use a 3:1 risk reward ratio (hope that makes sense?).

I tend to use stops that are based on daily average true range. So if the markets are becoming a bit lively then my stops will automatically become a little wider. Works for me.

 

[Black Swan]

There is another issue in relation to how and what you're trading, it's why I gave up trading the indices and or equities very early on. I can illustrate it with BP. Now the price has fallen some 14% this morning, and has fallen approx. 28% since the disaster began. But why the dramatic fall this morning when it was obvious to even the most naive punter that the company is in a lot of trouble. Not nec. financial trouble but from a far worse political headache that could cripple it for a long time? The news suggests the fall today is due to the potential clean up costs being an exceptional $700ml, bull5hit, I'll bet there's some cute short sellers who have patiently sat on their shorts for the past 6 weeks knowing there's only one way for that stock...down.

My point is that you have to wade through a lot of press, public relations, and fundamental issues (way way off the charts) and general sculduggery (that hasn't changed since Jesse Livermore's day) to arrive at a judgement with a company such as BP in order to decide whether or not to take a punt..Similarly if a retailer's figures come out; take M&S. You get told the figures will be good etc., etc., by the time you get to the fine points you see all sorts of issues, shares go up, then go down...sideways...

Overall point I'm making is that trading shares is IMHO far more difficult than most folk realise, it generally represents the first place new traders start 'cos they think they understand it and recognise a few names. But it requires levels of skills that have nothing to do with S&R, pivots, and any other indicators you may prefer to use and the best fundamental analysis underpinning the TA can still leave you scratching your head as to why x didn't do y..

There are a few guys on 'ere who trade shares very well, hats off to them, huge skill set needed to do it successfully which is why us lazier fookers chose forex...

 

[Shanghai]

There is another issue in relation to how and what you're trading, it's why I gave up trading the indices and or equities very early on. I can illustrate it with BP. Now the price has fallen some 14% this morning, and has fallen approx. 28% since the disaster began. But why the dramatic fall this morning when it was obvious to even the most naive punter that the company is in a lot of trouble. Not nec. financial trouble but from a far worse political headache that could cripple it for a long time? The news suggests the fall today is due to the potential clean up costs being an exceptional $700ml, bull5hit, I'll bet there's some cute short sellers who have patiently sat on their shorts for the past 6 weeks knowing there's only one way for that stock...down.

My point is that you have to wade through a lot of press, public relations, and fundamental issues (way way off the charts) and general sculduggery (that hasn't changed since Jesse Livermore's day) to arrive at a judgement with a company such as BP in order to decide whether or not to take a punt..Similarly if a retailer's figures come out; take M&S. You get told the figures will be good etc., etc., by the time you get to the fine points you see all sorts of issues, shares go up, then go down...sideways...

Overall point I'm making is that trading shares is IMHO far more difficult than most folk realise, it generally represents the first place new traders start 'cos they think they understand it and recognise a few names. But it requires levels of skills that have nothing to do with S&R, pivots, and any other indicators you may prefer to use and the best fundamental analysis underpinning the TA can still leave you scratching your head as to why x didn't do y..

There are a few guys on 'ere who trade shares very well, hats off to them, huge skill set needed to do it successfully which is why us lazier fookers chose forex...

I take your point about shares but I like trading them for precisely the same reason that you don't, ie that they are frequently manipulated by various parties who of course are only out for their own gain. Of course there are frequent surprises that you have to deal with but after a while you can see what is being plotted, eg washouts to take out the stops of weaker holders and then you can jump on the side of the smart / institutional money.

I don't take much notice of the fundamentals any more though. I find that if I am using technical strategies that the fundamentals usually end up just muddying the picture.

Its good that we don't all like trading the same thing of course!

 

[tennisball]

Hi

I'm about 5 weeks into trading as a novice but obviously still early days. So far, and as far as I can tell, I've been patient and disciplined and followed my self-imposed rules to the letter. I only trade 1-2% of my account (starting funds £500), I always use a guaranteed SL and I NEVER move it to protect a trade; there are others but I think you get the drift. At the moment I only trade shares.

On the negative side I am down £55 at the moment and I have 5 trades running (2 sells and 3 buys). I have lost 9 trades in a row - about £6/trade. Without a doubt I have entered the market at a very volatile time and perhaps I am guilty of over trading - all things considered.

On the positive side I am only down just over 10% of starting funds due to small trades and using a SL. Also I am now used to losing and maybe that's not a bad thing as a novice trader (!); however I am reaching a point where a small win/profit on just one trade would be a definite pyschological boost!

Anyway I remain confident and fairly unemotional about where I am at the moment. Does this sound like a familar story so far, or should I be concerned that I've still not hit that elusive first winner?

Regards, Big Al

All sounds good so far. I lost for month after month after month. Found out where the trades were eventually.

 

[Splitlink]

I take your point about shares but I like trading them for precisely the same reason that you don't, ie that they are frequently manipulated by various parties who of course are only out for their own gain. Of course there are frequent surprises that you have to deal with but after a while you can see what is being plotted, eg washouts to take out the stops of weaker holders and then you can jump on the side of the smart / institutional money.

I don't take much notice of the fundamentals any more though. I find that if I am using technical strategies that the fundamentals usually end up just muddying the picture.

Its good that we don't all like trading the same thing of course!

I have to disagree with you about fundamentals, with regard to shares. My best successes have been oversold shares. Some have gone up on their own and others have been taken over.

TA trading, to me, is a hobby. I like it and enjoy talking to you guys. My success rate is ok, but nothing to shout about compared to what I have done with share investment over my lifetime. That said, once I have decided on a share because of its FA, I look to TA to get me in.