Don't Panic!!

[megamuel]

If you want to give automation a go, you can get an EA programmed. You can pay someone on a site like www.elance.com or www.freelancer.com most of the programmers are from Indonesia or similar countries so they'll program it up real cheap for you. You can then run this in MetaTrader and back testing is easy. Will test your strategy over 10 years in like 2 mins. If you use freelancer.com look for a programmer called 'andukochandra', he did some work for me and is very good. You basically post your project up and the programmers will give you a bid for it. Will you be sharing details of your strategies here or will they remain secret ?!

 

[Cable Sal]

Oops, nearly forgot about the bit in the plan that says I'll write my journal every day that I've got a trade on.

So, Helical Bar is still in there (HLCL), and I'm a bit confused now about how the financials are calculated. Maybe writing it up here will help clarify things.

I bought near the top of a spike on 4th Oct, at 318.19, at 10p a point (going long). It closed at 311.40 and my running loss was -£0.68. I get that bit.

Another bit on my statement, which I think refers to the rollover, says that the opening level was 311.43, with the latest level at 310.62. Running loss of -£0.08.

I get the 8p - I think that's the rollover charge. I guess that the increase from 311.40 to 311.43 has something to do with how it's accounted for. I'm not sure what the 310.62 refers to though.

An 8p rollover charge on a 10p/point bet seems a bit steep. My normal bet size would be £10/point, so if that charge scales up to £8 per rollover, that's going to have a sizeable impact on my profitability. Time will tell, but I might have to revert to a slightly tweaked version of the methodology which didn't produce quite as good results, but didn't have so many rollovers either.

At EOD today the price has wobbled up a little to 313.10 and I'm now showing a running loss of -£0.08 again. My account balance is down by 51p. Oh, I get it - the 51p is what I might think of a running balance - what my P/L is from start to date - but what IG call my running balance is a daily running balance, which is -8p at the start of 6th Oct.

Looking forward to tomorrow: the EOD results have me entering long on Fenner (FENR) tomorrow. I'm going to try and resist the temptation to get in early tomorrow and opt to trade during my lunchtime window instead. Again, it'll be a 10p bet.

Hehehe, spreadsheets have never been so much fun!

 

[Cable Sal]

If you want to give automation a go, you can get an EA programmed. You can pay someone on a site like www.elance.com or www.freelancer.com most of the programmers are from Indonesia or similar countries so they'll program it up real cheap for you. You can then run this in MetaTrader and back testing is easy. Will test your strategy over 10 years in like 2 mins. If you use freelancer.com look for a programmer called 'andukochandra', he did some work for me and is very good. You basically post your project up and the programmers will give you a bid for it. Will you be sharing details of your strategies here or will they remain secret ?!

I'll keep a note of andukochandra in case I go down that route later.

As for sharing my strategies, I'll happily share the details here, you'll be amazed at how many decisions are made by arbitrary variables. Let's just make sure that it really does work first, I'm not too certain. I think I'm onto a winning method, but it's been finessed to work with different spread sizes and without such high rollover fees. The purpose of this phase of my trading development is to use real, live, spreadbetting data to optimise the method fully.

Cheers,

Sal

 

[megamuel]

Fair enough, if you post your ideas here though you should get some constructive criticism from some of the more knowledgeable members. As for rollover charges, its been a while since I've spread betted so I'm not quite sure, but maybe if your holding your trades open for more than a few days it might be cheaper to trade near quarter bets as opposed to daily spots. Bigger spread but no rollover charges. Unless you rollover to the next quarter I think. There should be info on the website somewhere?

 

[megamuel]

" There is also a rollover charge that reflects the cost of financing the position that you hold having only put down a fraction of the value as a deposit. The financing is charged at the risk-free (or LIBOR) rate plus 2.5% per annum."

Hmm... That's all I can find!

 

[brettus]

I'll keep a note of andukochandra in case I go down that route later.

As for sharing my strategies, I'll happily share the details here, you'll be amazed at how many decisions are made by arbitrary variables. Let's just make sure that it really does work first, I'm not too certain. I think I'm onto a winning method, but it's been finessed to work with different spread sizes and without such high rollover fees. The purpose of this phase of my trading development is to use real, live, spreadbetting data to optimise the method fully.

Cheers,

Sal

The rollover charge is the difference between what you got closed at and reopened. The charges are tiny. It really depends on how long you are holding the position for. If you are holding them for a long time, you might want to try the quarterly products. It makes it slightly harder for you to figure out your P&L on the trade if they keep rolling it. You can download the trades into excel so it's easy enough. If you work out the formula for the rollover charge it will make it easier work out your P&L or potential P&L.

 

[leonarda]

Oops, nearly forgot about the bit in the plan that says I'll write my journal every day that I've got a trade on.

So, Helical Bar is still in there (HLCL), and I'm a bit confused now about how the financials are calculated. Maybe writing it up here will help clarify things.

I bought near the top of a spike on 4th Oct, at 318.19, at 10p a point (going long). It closed at 311.40 and my running loss was -£0.68. I get that bit.

Another bit on my statement, which I think refers to the rollover, says that the opening level was 311.43, with the latest level at 310.62. Running loss of -£0.08.

I get the 8p - I think that's the rollover charge. I guess that the increase from 311.40 to 311.43 has something to do with how it's accounted for. I'm not sure what the 310.62 refers to though.

An 8p rollover charge on a 10p/point bet seems a bit steep. My normal bet size would be £10/point, so if that charge scales up to £8 per rollover, that's going to have a sizeable impact on my profitability. Time will tell, but I might have to revert to a slightly tweaked version of the methodology which didn't produce quite as good results, but didn't have so many rollovers either.

At EOD today the price has wobbled up a little to 313.10 and I'm now showing a running loss of -£0.08 again. My account balance is down by 51p. Oh, I get it - the 51p is what I might think of a running balance - what my P/L is from start to date - but what IG call my running balance is a daily running balance, which is -8p at the start of 6th Oct.

Looking forward to tomorrow: the EOD results have me entering long on Fenner (FENR) tomorrow. I'm going to try and resist the temptation to get in early tomorrow and opt to trade during my lunchtime window instead. Again, it'll be a 10p bet.

Hehehe, spreadsheets have never been so much fun!

glad to see things going well. Your IG rollover finance is calculated by the tiny difference in the closing/opening price in the accounting, which on 10p a point will be tiny!

Just a suggestion to you system that works very well for me. Have you thought about timing your entries to the medium term market trend? helps give your entries a best chance with respect to the market and also helps discipline in preventing over trading, rather than entering every day or whatever...? For example I use a slow stochastic crossover of the index to time my entries.

cheers

 

[leonarda]

I'll keep a note of andukochandra in case I go down that route later.

As for sharing my strategies, I'll happily share the details here, you'll be amazed at how many decisions are made by arbitrary variables. Let's just make sure that it really does work first, I'm not too certain. I think I'm onto a winning method, but it's been finessed to work with different spread sizes and without such high rollover fees. The purpose of this phase of my trading development is to use real, live, spreadbetting data to optimise the method fully.

Cheers,

Sal

sal, re that suggestion, here's a far better description and example of market timing for entries:
http://www.swing-trade-stocks.com/market-timing.html

 

[Cable Sal]

" There is also a rollover charge that reflects the cost of financing the position that you hold having only put down a fraction of the value as a deposit. The financing is charged at the risk-free (or LIBOR) rate plus 2.5% per annum."

Hmm... That's all I can find!

I could do with getting into the maths behind this.

I bought HLCL at 318.19, betting 10p/point. That's the equivalent of owning £31.82 of shares.

Libor is running at about 0.55% for overnight, add to that the daily equivalent of IG's 2.5% pa = 0.006765%. Total interest = 0.556765% on £31.82 = 18p. Hmmm, not 8p, so I'm not there with the maths yet.

I've got a bit more data on this. The plan said to go long on Fenner today (FENR), which I did. I bought at 248.52 - oh nuts, that reminds me, I'm supposed to go in at day end and alter the stop and limit for today's ATR. It's a tiny adjustment, but makes a huge difference to profitability.

Hang on....

Okay, job done. Stop altered to 240.5, limit altered to 259.52.

Distracted there - back to the point: Fenner's rollover charge for tonight is £0.06, Helical's is £0.08 again. Maybe with a few more data points I'll get this one figured out. 8p and 6p don't concern me, but if they scale up proportionally to £8 and £6 a night on a £10 bet, for sure the quarterly contracts will be a better option. (Many thanks for pointing out Sam that they don't have rollover charges, I've been looking at that closely today.)

 

[Cable Sal]

sal, re that suggestion, here's a far better description and example of market timing for entries:
http://www.swing-trade-stocks.com/market-timing.html

Funny enough, I'd spotted that some of the failures in the paper trades (on otherwise well-behaving stocks) had been because the share trend was fighting the market trend.

It only seems to matter if it happens in the first few days, when the price is closer to its stop than its limit. I built in an entry-veto, based on the MA(5) of the FTSE250. I tinkered around with a few other settings, but MA(5) gave me the best response. If today's FTSE250 close is higher than the MA(5) I will only act on long signals, if it's lower than the MA(5) I'll only act on short signals.

The stochastic crossover looks easy enough to build into my spreadsheet, I'll have tinker once I've got through the rollover / quarter contract comparison.

 

[Cable Sal]

And finally, a little about today's trading and tinkering...

Both Fenner and Helical Bar went north today, blown along their way by the favourable winds of the FTSE 250. I've ended the day +17p up on my account woo-hoo first profit!! :clap:

I don't count this a real profit though, my trades are still in, it's not like I've banked the cash. All the same, if it turns out that I'm in the 95% of newbie traders who fail, then this might be the only chance I get to feel smug - so I'm gonna revel in it.

Today I was a successful trader arty:

Okay, now back to reality. I finished off converting all my backtesting and paper trading to date to accommodate a wider spread and the worst case (I hope) scenario on the rollover charges at £8 per night. Bad news and good news.

Bad news: those rollover charges were putting a serious dint in my profits, which along with the wider spreads were causing me to doubt the viability of my current method. I messed around with stops and limits first to try and regain the 1.87 R ratio average that the successful trades had been showing before the wider spreads, but that impacted severely on the success ratio, knocking it down to only just above the minimum 33% needed for breakeven.

Good news: I turned my attention to the success ratio, figuring that if I could knock out some of the unsuccessful trades, I'd knock out a fair few £8 rollovers too. I experimented a bit and found that if I introduced a new rule I could get some interesting results: only enter a trade once in a price swing - no matter how tempting a trend looks. Go long once, do nothing until I can go short, then do nothing until I can go long, etc... It means I only get to enter once or maybe twice a month on any particular share, but there's plenty of shares out there - I can make a bigger basket that I move less frequently on. The success ratio went up to 76%. I need to calculate the R ratio for the new method and compare it with the wide-spread-adjusted old version to see if it's likely to scale up if I work it across a bigger basket.

I've no entry signals for tomorrow, so my main goal is to compare a backtest of the three oldest stocks in my basket with their equivalent December contract. I'll have to make assumptions about historical spreads again, but I can see how much slack I can build in before it becomes non-competitive with the £8 rollover.

Cheers,

Sal

 

[leonarda]

And finally, a little about today's trading and tinkering...

Both Fenner and Helical Bar went north today, blown along their way by the favourable winds of the FTSE 250. I've ended the day +17p up on my account woo-hoo first profit!! :clap:

I don't count this a real profit though, my trades are still in, it's not like I've banked the cash. All the same, if it turns out that I'm in the 95% of newbie traders who fail, then this might be the only chance I get to feel smug - so I'm gonna revel in it.

Today I was a successful trader arty:

Okay, now back to reality. I finished off converting all my backtesting and paper trading to date to accommodate a wider spread and the worst case (I hope) scenario on the rollover charges at £8 per night. Bad news and good news.

Bad news: those rollover charges were putting a serious dint in my profits, which along with the wider spreads were causing me to doubt the viability of my current method. I messed around with stops and limits first to try and regain the 1.87 R ratio average that the successful trades had been showing before the wider spreads, but that impacted severely on the success ratio, knocking it down to only just above the minimum 33% needed for breakeven.

Good news: I turned my attention to the success ratio, figuring that if I could knock out some of the unsuccessful trades, I'd knock out a fair few £8 rollovers too. I experimented a bit and found that if I introduced a new rule I could get some interesting results: only enter a trade once in a price swing - no matter how tempting a trend looks. Go long once, do nothing until I can go short, then do nothing until I can go long, etc... It means I only get to enter once or maybe twice a month on any particular share, but there's plenty of shares out there - I can make a bigger basket that I move less frequently on. The success ratio went up to 76%. I need to calculate the R ratio for the new method and compare it with the wide-spread-adjusted old version to see if it's likely to scale up if I work it across a bigger basket.

I've no entry signals for tomorrow, so my main goal is to compare a backtest of the three oldest stocks in my basket with their equivalent December contract. I'll have to make assumptions about historical spreads again, but I can see how much slack I can build in before it becomes non-competitive with the £8 rollover.

Cheers,

Sal

Hi Sal,
I have an IG account but haven't used it for a few months, however when I was betting £1 to £2 pounds a point my typical rollover charge was about 2 pence ! The maths are something like:
Example: £1pp for 300p share:
Equiv share price £1x300 = £300
libor of 2.5%
Interest over a year = 2.5% x £300 = £7.50
Over 1 day (ie.a daily rollover) = £7.50/365days = £0.02 (2 pence!)
Hope that helps

 

[leonarda]

And finally, a little about today's trading and tinkering...

Both Fenner and Helical Bar went north today, blown along their way by the favourable winds of the FTSE 250. I've ended the day +17p up on my account woo-hoo first profit!! :clap:

I don't count this a real profit though, my trades are still in, it's not like I've banked the cash. All the same, if it turns out that I'm in the 95% of newbie traders who fail, then this might be the only chance I get to feel smug - so I'm gonna revel in it.

Today I was a successful trader arty:

Okay, now back to reality. I finished off converting all my backtesting and paper trading to date to accommodate a wider spread and the worst case (I hope) scenario on the rollover charges at £8 per night. Bad news and good news.

Bad news: those rollover charges were putting a serious dint in my profits, which along with the wider spreads were causing me to doubt the viability of my current method. I messed around with stops and limits first to try and regain the 1.87 R ratio average that the successful trades had been showing before the wider spreads, but that impacted severely on the success ratio, knocking it down to only just above the minimum 33% needed for breakeven.

Good news: I turned my attention to the success ratio, figuring that if I could knock out some of the unsuccessful trades, I'd knock out a fair few £8 rollovers too. I experimented a bit and found that if I introduced a new rule I could get some interesting results: only enter a trade once in a price swing - no matter how tempting a trend looks. Go long once, do nothing until I can go short, then do nothing until I can go long, etc... It means I only get to enter once or maybe twice a month on any particular share, but there's plenty of shares out there - I can make a bigger basket that I move less frequently on. The success ratio went up to 76%. I need to calculate the R ratio for the new method and compare it with the wide-spread-adjusted old version to see if it's likely to scale up if I work it across a bigger basket.

I've no entry signals for tomorrow, so my main goal is to compare a backtest of the three oldest stocks in my basket with their equivalent December contract. I'll have to make assumptions about historical spreads again, but I can see how much slack I can build in before it becomes non-competitive with the £8 rollover.

Cheers,

Sal

or more precisely from IG's help system:
"For example, if you are taking a long Daily position on a UK-listed share priced in sterling, the interest adjustment is calculated by adding the latest one-month London Interbank Offered Rate (LIBOR) to a small loading adjustment, usually 2.5% per annum. So, if LIBOR is 0.5%, the total daily interest adjustment to a long position would be 0.008% (0.5% + 2.5% ÷ 365). "

So 0.008% x equivalent position, so in your case £31.82x0.008% = £0.0025 or 1/4Pence!

Would it help if you pasted the lines of your overnight IG account statement for us to help explain it?

 

[Cable Sal]

or more precisely from IG's help system:
"For example, if you are taking a long Daily position on a UK-listed share priced in sterling, the interest adjustment is calculated by adding the latest one-month London Interbank Offered Rate (LIBOR) to a small loading adjustment, usually 2.5% per annum. So, if LIBOR is 0.5%, the total daily interest adjustment to a long position would be 0.008% (0.5% + 2.5% ÷ 365). "

So 0.008% x equivalent position, so in your case £31.82x0.008% = £0.0025 or 1/4Pence!

Would it help if you pasted the lines of your overnight IG account statement for us to help explain it?

Many thanks for the offer - for some reason pasting the lines isn't working, I'll try and put it in as an attachment.

I'm starting to get to the bottom of things, I've worked out what all of the figures on the statement are referring to. Sticking with the overnight transaction of 4th Oct to 5th Oct, which is what I'll attach, here's what I've managed to figure out.

My original opening level on 4th Oct was 318.19, it was closed at 311.40 for rollover.
311.40 is exactly halfway between the EOD sell and buy spreads (which were 310.62 and 312.18). This resulted in a mid-transaction loss of -£0.68.

It reopened at 311.43, which is the 311.40 close price plus the rollover fee of 0.03p. So, I bought at 311.43, when the sell price was 310.62, a difference of £0.08, which was subtracted from my balance to make a full-transaction loss of -£0.76.

Okay, so I still can't work out the calculation that lead to the 0.03p rollover charge adjustment to the rollover opening price, but it's a lot less scary at 0.03p than 8p. Yep, the rollover charges at the moment are so tiny they're disappearing from my account.

8p for Helical Bar and 6p for Fenner appear as regular charges because that's half the price of the spread at the value I'm betting.

Thanks for all your help, it'd sure be good to have confirmation that I'm reading the figures correctly.

Sal

 

[Cable Sal]

So, a little update from today's efforts. Helical's progress continues in the right direction, closing up a penny on yesterday. Fenner had a bit of a breather after yesterday's star performance, closing with exactly 0% change on yesterday. Overall, an additional 10p on the balance, my account is now 27p in profit.

So, after yesterday's smugness at being a successful trader for one day, today I think I'll be smug about being a consistently profitable trader Way-hey, profits two days on the run!!

Statistically, if my method works in practice as it does in theory, I'd expect no worse than breakeven after one month, and consistent profitability after two months. During the first month, I expect the P/L to be all over the place.

Now, something a bit controversial. I've been agonising with myself today about going outside my plan. I've been attempting to compare daily and quarterly contracts, wider spreads versus rollover charges (albeit much smaller charges than I'd worried about). I'd really like to place simultaneous bets for the same share, one on daily and one on quarterly. My trading plan doesn't prohibit this, but I've no forward-tested quarterly data, so I should paper trade the quarterly contracts for a month to satisfy the plan's criteria for inclusion in the basket.

I have two reasons for wanting to escalate / take on greater risk than my plan allows:
1. I've got a week left on the minimum 10p, so the risk of the experiment is greatly reduced compared to in a month.
2. If I'm going to switch to trading quarterly contracts, I'd rather know now so that I can start paper trading the quarterly alternatives and optimising my methodology around a slightly wider spread, with less pressure on reducing time spent "in trade".

After much debating with myself, I decided to back-test some quarterlies for four months, instead of the usual two months back + one month forward. It's not as good, but it does help to minimise the risk a little more.

One of the contracts that I've tried has given me simultaneous long signals for tomorrow on both the daily and quarterly contracts, so I'm going to enter the trade at lunchtime tomorrow and see what I can learn from it over the next few days.

Is this a lack of discipline or is my plan wrong? I think it's the plan that's wrong. I think it's the right decision strategically, and I should have included this action under trading skills development. It's an area that was thinly described in my plan, that I need to put more effort into this weekend. I've been on a steep learning curve so far, but I'm starting to see what else I need to learn about in the short term.

The stock that I'll be entering into tomorrow is Aquarius Platinum (AQP), I'll enter the daily and the December contract simultaneously.

 

[leonarda]

Many thanks for the offer - for some reason pasting the lines isn't working, I'll try and put it in as an attachment.

I'm starting to get to the bottom of things, I've worked out what all of the figures on the statement are referring to. Sticking with the overnight transaction of 4th Oct to 5th Oct, which is what I'll attach, here's what I've managed to figure out.

My original opening level on 4th Oct was 318.19, it was closed at 311.40 for rollover.
311.40 is exactly halfway between the EOD sell and buy spreads (which were 310.62 and 312.18). This resulted in a mid-transaction loss of -£0.68.

It reopened at 311.43, which is the 311.40 close price plus the rollover fee of 0.03p. So, I bought at 311.43, when the sell price was 310.62, a difference of £0.08, which was subtracted from my balance to make a full-transaction loss of -£0.76.

Okay, so I still can't work out the calculation that lead to the 0.03p rollover charge adjustment to the rollover opening price, but it's a lot less scary at 0.03p than 8p. Yep, the rollover charges at the moment are so tiny they're disappearing from my account.

8p for Helical Bar and 6p for Fenner appear as regular charges because that's half the price of the spread at the value I'm betting.

Thanks for all your help, it'd sure be good to have confirmation that I'm reading the figures correctly.

Sal

yep you've got the values right. 0.03p is your daily rollover charge, and the 8p is the one-off charge for the spread.

 

[0007]

1. I've got a week left on the minimum 10p, so the risk of the experiment is greatly reduced compared to in a month.
2. If I'm going to switch to trading quarterly contracts, I'd rather know now so that I can start paper trading the quarterly alternatives and optimising my methodology around a slightly wider spread, with less pressure on reducing time spent "in trade".

Sal,

Good to see the progress you're making - I empathise with the "scientific" approach, I just wish I was one of those guys who can successfully trade by the seat of their pants (do they really exist?).

Re IG and paper trading: once you start staking real money > 0.1p point the psycho factor kicks in and unless you have nerves of steel and grim dedication it will almost certainly distort your trading. I always test new strategy via paper trading because i want to test the system and not my psychological state - that comes later. The big advantage of IG is that they cover so many instruments and it is dead easy to read off your "fill" values - yes I know you can get slippage in the real world but we're testing the system and not IG's brokerage.

I've found that paper trading realistic stakes (ie calculated in relation to desired risk) is remarkably realistic for me [for those who say simulator training is unrealistic, I'd like them to see the sweat and panic that aircraft simulators can induce - as well as their highly beneficial establishment of discipline and standard reaction to known emergencies eg when in trading you reach your stop] and to be invaluable in testing the system once i have established its suitability in "low stake" mode. So i wouldn't worry about the end of 0.1p trading - i think that's a come-on (albeit a helpful one) from IG - no rooky will learn to trade successfully in 6 weeks. I also tend to disregard rollover charges when paper trading - with a half decent system they are not significant.

As you favour the logical mathematician's approach, have you considered the use of Monte-Carlo simulation? I'm starting to find this quite useful as a confirmation for (a) entries (b) likely profit. Still quite a lot of development work to do on this yet but it looks promising.

 

[Cable Sal]

Sal,

Good to see the progress you're making - I empathise with the "scientific" approach, I just wish I was one of those guys who can successfully trade by the seat of their pants (do they really exist?).

Re IG and paper trading: once you start staking real money > 0.1p point the psycho factor kicks in and unless you have nerves of steel and grim dedication it will almost certainly distort your trading. I always test new strategy via paper trading because i want to test the system and not my psychological state - that comes later. The big advantage of IG is that they cover so many instruments and it is dead easy to read off your "fill" values - yes I know you can get slippage in the real world but we're testing the system and not IG's brokerage.

I've found that paper trading realistic stakes (ie calculated in relation to desired risk) is remarkably realistic for me [for those who say simulator training is unrealistic, I'd like them to see the sweat and panic that aircraft simulators can induce - as well as their highly beneficial establishment of discipline and standard reaction to known emergencies eg when in trading you reach your stop] and to be invaluable in testing the system once i have established its suitability in "low stake" mode. So i wouldn't worry about the end of 0.1p trading - i think that's a come-on (albeit a helpful one) from IG - no rooky will learn to trade successfully in 6 weeks. I also tend to disregard rollover charges when paper trading - with a half decent system they are not significant.

As you favour the logical mathematician's approach, have you considered the use of Monte-Carlo simulation? I'm starting to find this quite useful as a confirmation for (a) entries (b) likely profit. Still quite a lot of development work to do on this yet but it looks promising.

I'm really poor at seat-of-the-pants trading. Even trying to pick my entry point when I'm getting a "go long/short tomorrow" signal - I have much better results going in at a random time than I achieve when I'm trying to pick my moment. The ability to watch and understand short-term price movements is something that I have on my self-development plan, because I know I could improve my profitability by improving my point of entry. At the moment I get overwhelming urges to do exactly the wrong thing, so I've learned my lesson, and until I'm ready to tackle that issue I'm sticking with random entry.

I was thinking only yesterday that the biggest success I've achieved so far on this journey is to be able to begin trading (even though small values) with a sense of mild excitement. The ability to control my trading emotions and consequent reactions is the goal of this journal, and so far so good, I trust my methodology far more than any gut instinct. It's a very calming sensation.

I must admit, mistaking the rollover charge of 0.03p to be 8p gave me a momentary panic, but the methodology could still return a profit, I just had to be a lot more careful about which shares I put in the basket and which version of the methodology I used. Scaled up to £10/point trades, I mistook 3p per day costs to be £8 per day, which was costing me an average of about £65 per trade.

It's reminded me that the purpose of opening an account at this point is to test that my assumptions are right in the model. I put a little time today into adding a bit of extra functionality into my spreadsheet, I can now reconcile (in a bookkeeping sense) IG's statement with my calculations. It's really helped me to confidently understand how to predict my cashflow, costs and profits, at least while I'm going long, I'll need to see a short trade go through before I can be sure I've got that right.

Tonight's statement will include the duel trade on AQP spot and December contract. I can see straight away from my balance that trading quarterly contracts works differently, I should have the mechanics of that captured once I see the second statement.

I agree with you that I shouldn't concern myself with the end of minimum price trading, now I'm confident that my method is operating somewhere within the bounds of reality. IG increase the minimum price incrementally, so I think I'll use that to help with the psychological effect, I'll keep on trading the minimum to help get used to seeing the figures get bigger.

The Monte-Carlo simulation isn't something I've heard about. Where am I best looking to find out more?

Thanks for your help,

Sal

 

[Cable Sal]

Update on today's trades: Despite all my current trades being long and the FTSE heading a little south I've still come out with a higher balance at EOD today than yesterday. I'm now 51p in profit

I entered the simultaneous trades in AQP daily and quarterly contracts. I bought AQP daily at 367.82 and AQP Dec at 369.09, their respective closing prices for the day were 372.5 and 373.2. To be honest, once I'd confirmed that the £8 rollover charge panic had turned out to be false, I had second thoughts again about entering into these trades, I'd lost the sense of urgency. I decided to go ahead though, I'd put a lot of thought into whether or not to take the trades, and strategically it was probably the best thing to do. It's an experiment that I would need to carry out at some point, might as well do it while the price is low. I won't be able to model quarterly contracts properly until I see how the costs work. My model was giving simultaneous buy signals, it's just that the wider plan demands the shares get paper traded for a least a month to prove compatibility with my method.

Both are doing well, go AQP!

Fenner is dropping back quite a bit. I bought it at 248.52 and it closed down today at 246.5.

Helical Bar is powering ahead, closing up at 321.1, its first day closing above the spread cost to sell. It's still got a long way to go to reach its limit though, set at 338.54, is above the highest that it's peaked at for several months.

Meanwhile, in paper trading, a surprise stock is proving to be an unexpected star. Inchcape, which I was only following to prove that I could spot the failures (along with Easyjet and Imagination Tech) proved me wrong. It's looking likely to work very well with my method, and will join the basket of trading shares on 20th October if it keeps up this performance. Easyjet and Imagination Tech have since been binned off - along with Lamprell which was looking too flaky.

The thing I'm really waiting for now is a short signal from CSR. It's nearly there, I can feel it trying to drop again, but the FTSE has been propping it up. I'm sure as soon as the FTSE has a few consecutive days heading south, CSR will follow it nicely. Until I see that signal though, I don't do anything.

My main task for this weekend is to look again at my trading plan. I've learned a lot this week, and the plan needs a bit more work, especially in the area of trading skills development. If I get through that, or get the urge to play spreadsheets, I want to have a look at the stochastics that Leonarda provided a link to a few days ago.

Goodnight y'all

Sal

 

[leonarda]

Update on today's trades: Despite all my current trades being long and the FTSE heading a little south I've still come out with a higher balance at EOD today than yesterday. I'm now 51p in profit

I entered the simultaneous trades in AQP daily and quarterly contracts. I bought AQP daily at 367.82 and AQP Dec at 369.09, their respective closing prices for the day were 372.5 and 373.2. To be honest, once I'd confirmed that the £8 rollover charge panic had turned out to be false, I had second thoughts again about entering into these trades, I'd lost the sense of urgency. I decided to go ahead though, I'd put a lot of thought into whether or not to take the trades, and strategically it was probably the best thing to do. It's an experiment that I would need to carry out at some point, might as well do it while the price is low. I won't be able to model quarterly contracts properly until I see how the costs work. My model was giving simultaneous buy signals, it's just that the wider plan demands the shares get paper traded for a least a month to prove compatibility with my method.

Both are doing well, go AQP!

Fenner is dropping back quite a bit. I bought it at 248.52 and it closed down today at 246.5.

Helical Bar is powering ahead, closing up at 321.1, its first day closing above the spread cost to sell. It's still got a long way to go to reach its limit though, set at 338.54, is above the highest that it's peaked at for several months.

Meanwhile, in paper trading, a surprise stock is proving to be an unexpected star. Inchcape, which I was only following to prove that I could spot the failures (along with Easyjet and Imagination Tech) proved me wrong. It's looking likely to work very well with my method, and will join the basket of trading shares on 20th October if it keeps up this performance. Easyjet and Imagination Tech have since been binned off - along with Lamprell which was looking too flaky.

The thing I'm really waiting for now is a short signal from CSR. It's nearly there, I can feel it trying to drop again, but the FTSE has been propping it up. I'm sure as soon as the FTSE has a few consecutive days heading south, CSR will follow it nicely. Until I see that signal though, I don't do anything.

My main task for this weekend is to look again at my trading plan. I've learned a lot this week, and the plan needs a bit more work, especially in the area of trading skills development. If I get through that, or get the urge to play spreadsheets, I want to have a look at the stochastics that Leonarda provided a link to a few days ago.

Goodnight y'all

Sal

yep CSR certainly looking weak, possibly falling down to at least 300 likely...