Flat Market or Excuses for Lack of Trading Skills?

[TheBramble]

A relatively novice trader, I'm using EOD Metastock for TA to pick from the FTSE100 companies.

I'm not doing that well. Actually, quite badly.

Now my excuse might be that the market is flat, and that may or may not be true in relative terms. But you only have to get direction, timing or volatility wrong - any one of them will make a mess of your P/L.

So I was wondering if I should invest in Metastock RT and a live feed. And go for the intraday trades.

Also wondering if I could find more volatility in U.S. stocks - particularly NASDAQ.

And then again, I'm wondering that if my trading techniques are simply just crap using EOD data, in RT, I'll probably just lose it quicker.

Is there an advantage going intraday using EOD patterns, and going into the more volatile US markets?

 

[Car Key Boi]

well, i trade both US and UK stocks, i rarely bother with indices blah. Anyways, whatever faults yuo may have in yuor trading skills, they will only be magnified with the US stocks. As for the Nasdaq, YUO MUST USE A LEVEL 2 PLATFORM or else yuo're gonna be eaten alive. If yuo wanna learn how to trade the Nasdaq, see Naz (one of the members here, he's the TOP BOI on this subject)

personally thou, i think yuo should learn how to taxi an aircraft before attempting a takeoff. If i were yuo, i'd stick to the more sedate UK stocks and learn yuor craft on those before attempting the US stocks

just my two cents

 

[esiotrot]

Hi TB

I think it depends on what your trading strategy is. Metastock has a very powerful scanning utility built in, called Explorer.

You can look for ma crosses, new highs, candlestick patterns etc etc. you can also scan charts one after another using a template.
e.g. setup AAL with say: Bollingers, RSI and volume then scan all the stocks in your directory with one click to move to the next.

I agree with CKB - stick with UK stocks until you refine your strategy and techniques, then by all means go to the US. If you look only at FTSE350 stocks there are always trades waiting for you.

good luck - loads of help on these boards

 

[ZigZag]

The Bramble: I agree with Car Key Boi. You are at the bottom of a long learning curve. Fine tune your skills on European indices and stocks before going into U.S. high volatility indices & stocks. I had to learn the hard way. As to different time frames all are important to trady daily or intraday. Without longer time frames you will never identify true and establish trends. I start with weekly then daily then hourly. Once I can identify the corellation between the three I use lower time frames for entry and exit. To hone your skills dont buy any packages yet . Put the money saved into the markets and use free live sites e.g. Yahoo & ADVFN. The first rule is preservation of capital so bet small until you can honestly say to yourself my trading plan & money management policy has given me an edge. Good luck in your research and study.

 

[marky]

The Bramble

After several years of trading EOD and with reasonable success i then decided to go real time, and thats when it went pear shaped its was a hole new ball game and like starting all over again, dont just use things like the macd etc buy Murphy's book learn patterns, support resistance etc and only when you have mastered that, think about real time im slowly getting there but its taken a long time .
Regards mark

 

[spreadbet]

Seems to me that using EOD data your TA skills are not that bad as currently the market is flat on a daily chart. Will the market remain flat, well an EOD chart will not in my opinion yield that information at this time. Let the market decide and then go with the flow

Cheers

spreadbet

 

[Skimbleshanks]

TheBramble - nice to see someone being honest about their trading.

You say you're not doing well - but do you know why you're not doing well. If you know that, you are well on the road to being able to correct it.

Are you using proper money management, risk size, etc?

Intraday trading is far far harder then EOD trading, so as everyone above has said, get your EOD to where you are a consistent winner before looking to go intraday.

 

[Trader333]

Hi TheBramble,

I expect many people will disagree with what I am about to say but this board is about differing views and lively discussion so here goes.

There are many reasons NOT to trade UK stocks

1) Ridiculous spreads

2) Difficulty in going short

3) Lack of volatility

4) Stamp duty

People will argue that you can use CFDs which is fine for EOD trading but in my view if you want to have the possibility of making good money on an intra-day basis then trading the US is the best option. This will, of course, depend on how much money you can commit to opening an account but if you have sufficient funds it is also the cheapest place in which to learn in realtime with minimal risk.

How is this possible ? Well if you can commit $25K to an account you can trade Nasdaq stocks intra-day which have great volatility, have minimal spreads and with direct access is the fastest and cheapest way to trade.

I would also argue that it is the lowest risk way of experiencing trading because you can start trading just 100 shares at a time which means that your risk per 1c move is only $1 or around 62 pence. The costs per trade for this type of transaction with IB work out at $2 per round trip and there is simply nothing to come even close to this for real time trading costs.

I do not advocate jumping straight in to this as you would definitely need to take coaching but in my view it is the best way to get into trading. I know others are going to disagree but it has worked well for me.

Even on a day like today it was possible to make a comfortable $350 trading Nasdaq stocks by just taking 10 points here and there by jumping on momentum moves and getting out quickly. This was achieved even though there was little in the way of big range movers.

I hope this is of use

Cheers


Paul

 

[technologi]

Hi trader

Great posting, may i ask which broker are you using,

and what is the cost like?

regards

techno

 

[Skimbleshanks]

Nice post T333. If TheBramble is going to trade US, then he can do so with much less than $25k in his account as long as he doesn't qualify for a PDT (pattern day trader).

A good thing about that would be that it would perhaps make him pay more attention to the stocks he was selecting to trade, knowing that four trades in a five day period (I think) would be his limit. I'm not, of course, suggesting that he would just trade willy-nilly, but I know that if you give yourself certain limits you are more inclined to wait for the better moves. Just a thought.

 

[Trader333]

Hi Technologi,

I use IB and the costs are as follows:

1c per share up to 500 shares and 0.5c per share over 500 so if you trade just 100 shares it costs you (100 x 1c = $1) to open a position and the same to close so total costs = $2

If you trade 1000 shares which is what you would build up to for trading Nasdaq stocks it would be (1000 x 0.05c = $5) to open and the same to close so total costs = $10

In many cases if the market is in a momentum move and you have made say 30c to 50c profit or ($300 to $500 for a 1000 share trade) and the momentum slows or retraces a small amount it is common practice amongst Nasdaq traders to close half the position to lock in profits and then manage the remainder of the trade.

Cheers


Paul

 

[Trader333]

Hi Skim,

Yes I see your point although I would not recommend trading the Nasdaq without appropriate coaching.


Cheers


Paul

 

[Mr. Charts]

Trader333 is precisely correct in every word he has said.
I would add that one of the great joys in intraday US trading is your relative immunity from adverse news which could and does cause serious loss to multi-day positions. Intraday you can control your risk almost exactly. Remember it is the losses which destroy you and risk management is crucial.
Of the people that I coach some trade from 1.30pm to about 4.30pm, some throughout the US trading day, and others who are in the process of graduating from non-trading day jobs only trade in the evening from 7 till 9.
This is ideal for those steadily building on their success who aim and actually succeed in the dream of becoming professional traders from their own home.
That dream is perfectly attainable.
I know, I've done it and know many who have as well.
Most people fail because they don't know what they are doing and think they can pick it up as they go along.
That's like teaching yourself to fly a helicopter; do-able in theory, but in practice?

 

[technologi]

Trader
T
hanks for reply!

I may be interested in us market in the future!

I’ve had good year so far here in the UK, by simply following

The trend, for example RTR, LOG, SGE they all recovered nicely from their lows!

UK market is flat this summer I will not touch until AUG-SEP. then we may get

Another move to the upside, only after we visit resent lows…

Techno

 

[Trader333]

Nice Holiday Richard ?

Cheers


Paul

 

[Mr. Charts]

Yes thanks, Paul, wonderful ;-)
We're all still jet lagged.
Very nice to read your quality posts
Best wishes,
Richard

 

[bonsai]

Bramble
I would advise caution.

you say you are a relative 'novice' ?

before moving on to either the U.S or intra-day trading, I think
you should sort out WHY you have not been successful at EOD
and then try again.

A house is not a pile of bricks and you need solid foundations.
Only move on from success to success otherwise you may be
in quicksand and watch a lot of money disappear.