Day trading the DOW 24/03/03

chrisgee51

Newbie
4 0
Hi,

Thanks for all the commentary - its very helpful. I think I have just about got the entry signals sorted. I got the long at 15:49 and then the short at 16:52. However, my problem is that I panic once in a position and can't get the close right and often end up losing because I close the position on a minor reversal. For example, I closed the 15:49 at 16:05 and the 16:52 at 18:23. Very frustrating after spotting the entry!

Any advice or help on how to avoid falling into this trap of closing in minor reversals much appreciated.

Also, I am finding that the D4F prices are often considerably off the actual DJI and so makes it even harder to make money. At one point it was boucing +-20 points while DJI wasn't moving. I also have an account with Finspreads but tend not to use it because I prefer the D4F software - are Finspreads better or worse for the bias?

Thanks,
Chris
 

Bigbusiness

Experienced member
1,408 23
Hi Chris,

I have the same problem with Deal4free. Chartman did say earlier to ignore the spreadbet quotes and just concentrate on the index chart. Easier said than done but it should help.

Finspreads have a slightly higher spread than Deal4free and when you press the deal button, the qoute is usually quite close to the Deal4free quote. I sometimes have both accounts open to compare the quotes.

Deal4free base their quotes on the futures price and on Friday it was darting around on low volume, war news and rumors. I also noticed this pattern on the 15min chart that seemed to be causing a bit of volatility.
 

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ChartMan

Legendary member
5,580 46
ChrisGee - I can make a suggestion here- it may not be the final answer, but it should help.... I don't know what your stake size is , but try halving it and set your mental stop to twice the size.... Same net loss. This may help you relax a bit more when the situation looks like terminally going in the other direction. It takes a lot of faith trying to trade someone elses system and continually worrying about if it's going to work out..... It helps as well if you're not doing this for a living.....
Reducing my stake size made a huge difference to my trading. I was basically risking far too high a percentage of my capital and was doing just what you did- exiting on fear or uncertainty.
As time passes , you will all develop the required skills to enter and exit trades at far better positions whilst still retaining the basic strategies shown here to manage your trades to the optimum. Remeber, you won't always be right, but being more right than wrong will bring handsome profits by way of enhanced Reward/Risk ratios.
 

chrisgee51

Newbie
4 0
Hi,

Thanks for the responses. I am only doing £1 a point at the moment to practice and develop a feel for various approaches and try and gain the confidence! But I am trying to imagine what I would do if I had a bigger stake. There is a huge amount of psychology you need to get to grips with as well as the TA!

Specifically on the two trades I made on Friday was there anything obvious that I was missing that would indicate the gain would run till 16:30 and then the fall would run till 19:30.

What stops do people normally work with?

Thanks,
Chris
 

ChartMan

Legendary member
5,580 46
ChrisGee and others.
Yes there was , but in a negative sense. I have found that (mostly) a bottom and a top has a clearly defined TA form, either by way of Positive or Negative divergence across 3 troughs/peaks or an H&S ( or Inv.). Another bottom formation is te "W" , an example at 19:25 to 19:53 on Friday. In my experience, and worth noting, is that real tops and bottoms, as opposed to pauses etc., tend to take at least 30 mins to develop.
So a double bottom across 15 mins would tend to be a local pause as opposed to the bottom of the trend.
It is an important part of DOW TA to recognise these timescales. please be aware, as I've said before, nothing in TA is cast in stone, but you do have finite rules on which to base decisions to improve your position, be it a close or a continuation.
I still say try reducing your stake, maybe 50p, whilst you gain confidence in the strategy and analysis. Once you have the confidence in determining the likely outcome of any TA, you will find that the £££ attached to the trade will ( hopefully) be insignificant and NOT affect your TA decision making. Your trading will be purely based on TA and NOT by the fear of losing money.
 

Dino

Junior member
15 0
A couple of people on this thread have compared Finspread and D4F. I too prefer the D4F software. I use D4F for trading UK stocks but are using FINS to trade the DOW as I can't find the DOW on the D4F instrument tree, only the NASDAQ & the S&P - am I being a complete dumbo ?

Dino
 

Dino

Junior member
15 0
Thanks guys.

I was searching for the word DOW and I also had a mental aberration that the DOW contained 100 stocks not 30, so thought the US 30 was a different instrument - doh.

I feel ever so humbled - I guess we can all have a bad hair day.

Dino.
 

Skimbleshanks

1
2,325 16
On some feeds you'll see the Dow also referred to as INDU (short for Industrials) and/or DJI (short for Dow Jones Industrials).

So it is not always straightforward in finding 'the Dow' on feeds. :(
 
 
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