Introducing myself

[megamuel]

Hello all,

Been lurking around here for a while so thought I'd finally make a post and introduce myself! My name is Sam and I've been trading (with limited success!) for a few months now. My reason for getting into trading is quite a sad one! Unfortunately since the age of 16 (I'm now 23) I've suffered from panic attacks. These have affected many aspects of my life, but mainly my work. They first took hold of me in high school causing me to actually leave before my GCSE's... With a lot of support I managed to get back in to do my GCSE's and I returned to sixth form and went on to uni but thats when the panic attacks got the better of me and I had to quit uni and come home. Since then I've had a few unskilled jobs and I now find myself working behind the bar of my local pub much to my frustration! No offence to anyone who works behind a bar, its a difficult job to run a busy bar successfully and efficiently but I do not feel the job is proportional to my intelligence and it is definately not for me. Unfortunately I have no confidence left to try anything else and the thought of job hunting and interviews terrifies me! I then pursued the idea of working from home.

Earlier this year I developed the illusion that buying and selling shares would be a relatively easy way to make some money, so I read a few articles, opened a share trading account and went ahead and bought some shares with my embarassingly small amount of capital! I soon realised that even if I'd have picked good trades, after the commissions it was going to take years to make any money on them! Anyway, I convinced myself that these were long term investments and went ahead and bought more, with little technical and fundamental analysis! All of which I now still own and have fallen in value significantly! If I'd have had the slightest idea about the financial mayhem to follow I'd certainly have refrained from purchasing any shares! Luckily the money was money I could afford to loose and I still hold the shares in the hope that one day they might be worth something!

I'm glad to say since then I've made the effort to learn some more. I've read a few books and buy Investor Chronicle every week. I've also begun spread betting. At first I was pretty much gambling - trying to guess if the price would go up or down then betting on it, and taking lots of small profits. "EASY!" I thought... Well, it is easy to make money, unfortunately its even easier to loose money! I made a few bets that went the wrong way, didn't use stop losses, convinced myself that "It would come back!" and made a few big losses!!! Again, I at least followed one very important rule - don't trade with money you can't afford to loose!!! Now I've learnt a lot more about spread betting and I've been experimenting with a few techniques. I tried following trends without much success, I found that if the trades went against me for the first couple of days I'd panic and sell, only to find that they'd rallied in the other direction later on in the week! I've also tried betting as company results come out, I had consistent profits for the first week and thought I was on to a winner, only to have consistent losses the next week following exactly the same principal! However, I understand that the current volatility in the markets makes for very difficult trading for many strategies. I'm currently trading the FTSE 100 trying to get to grips with some of the indicators and I'm pleased to say I've recovered back my initial losses and more.

I guess I'm just trying to find my feet and find a technique/strategy that suits me and enables me to make some regular profits. I know it won't be easy... If it was everyone would be doing it. But I'm determined to succeed and prove to myself that I'm not completely useless, and give myself some confidence back. Sorry for the long boring story but I just wanted to introduce myself and give you all some info on where I am as I hope to become and active member of your trading community! Hopefully some of you guys will be able to empathise with my situation. I'd also like to ask for any key advice for a newbie, any recommendations on books to read (I've read 'Trading for Dummies', 'The Naked Trader', and 'The Financial Spread Betting Handbook') but I'd like to learn a bit more about candlestick patterns and specific strategies, and I'd also like to know if there are any relativley easy strategies that anyone could recommend for me.

One more thing, a few nights back I had a sleepless night and I thought up in my head a strategy that was sure to work, I researched my idea and discovered it was already a know strategy called the martingale strategy, in which your stake is doubled each time you loose... I understand that the pitfall of this idea is that you need to have really deep pockets if you get a few consecutive losses, but realistically, say your betting on 8 hour bars, 50p per point either side with stoploss and limit 100 points either side, win make £50 loose and your down £50, and you put a new bet on at the start of every 8 hour bar providing that your previous bet hit either stoploss or limit. The odds of getting it right per bar are technically 1/2 but with technical analysis, realistically how many times could you get it wrong in a row? For example if an index is laregely oversold, there may only be a certain amount of negative bars before there is a move upwards of 100 points. Does anyone use such a strategy? Sorry if that doesn't make sense but I'm a bit tired now. I'll get some sleep and read over it tomorrow! Thank you anyone who has taken the time to read all of this! May this be the first post of many!

Sam.

 

[jondowns1259]

Gambling

Hi there Sam, welcome to T2W!

I just want to make a quick comment on the Martingale system. Its broken so many gamblers, in my opinion it is not even worth contemplating. There are two problems with your theory:

1. You assume that when you place the bet that you have 50/50 chance; however, this is not the case. If the market was completely even it would be 50/50, but it is not even. If the market is trending why would you assume it had an equal chance of going one way or another?

2. If we flip a coin and it lands on heads a couple of times in a row we may assume that it will land on tails in the near future. This is a fallacy. Every flip of the coin is independent of the last flip -- this is where the system really falls down -- so technically, you could have infinite losses. Though this is unlikely, it is possible.

Sam, T2W is a great resource: use it. Ask questions and real all the posts. You will find it’s a long road, but you will learn. T2W is about learning NOT to gamble with your money, but to use it in ways that increase our chances of a return. This is achieved through knowledge of the markets. There is no easy way, however, you are already showing a commitment to your goals . . . So get learning!

Regards,
Jonathan.

 

[megamuel]

Hi Jonathan,

Thanks for the reply. First of all I just want to say that I'm not using the martingale strategy nor do I intend to, I'm just investigating it! I didn't explain myself very well in the previous post. What I meant was, although there are 2 outcomes - win or loose, I do not believe the chances to be 50/50. Beacuse as you say, the market may be trending. But surely that would work to your advantage... For example the markets are trending upwards that would give you more chance of gaining 100 points than loosing 100 points. Or for example, the last three 8 hour bars are red and your stochastic indicates laregely oversold and the red bars are decreasing in size suggesting selling is decreasing. You place an up bet 50p per point, with stoploss and limit 100 points either side, lets say it goes down and hits your stop loss and your £50 down, you then double your stake to £1, and place a bet in the same direction, surely the more the stock/index is oversold the greater the chances of a move upwards of 100 points? Anyway, just writing my thoughts down. Can anyone suggest a suitable strategy to research for a beginner?

Thanks,

Sam.

 

[£10kLoser]

Not trading related but I used to be a psychoanalyst and know of literally hundreds of people who have been totally cured (yes, cured not just the symptoms masked) of panic atacks through this method: Hypnotherapy Hypnosis Training Courses, List of Hypnotherapists Register - Successful Hypnotherapy and pure hypnoanalysis training I also went through their training system and this is not like the usual quack therapy where people go with claustrophobia and come out cured - only to find they have agoraphobia a week later!

Find a local practitioner from their website...

 

[megamuel]

Cheers £10kloser I'll look into that! Thank you,

Sam.

 

[chesterlady]

Hi Sam,
I enjoyed reading your thread I have a similar story to becoming a trader, I have a daughter now 8 who requires extra surport and for most of her life has had hospital visits about every three weeks which ment I have found it very difficult getting a job that allows so much time off.
I did a good course in london it was only two days but gave me a very good founation and a set of rules to follow ie only trade with 1% of your capital on each trade, also have a risk reward ratio of 1 to 3, and never have more than 3 trades on in one sector.
I use support and resistance, trends, moving averages, and some indictors.
I use sharescope which is very good and also produce so useful training dvds
I could recommend high probability trading by marcel link as a good reference book
My only advise would be take your time and enjoy your trading (protect your capital)
lynda

 

[megamuel]

Hey Lynda!

Thanks for the advice! Its great that your going for it and giving it a shot at trading full time. I really really want to be able to do that one day, so best of luck to you also! I read a book called 'The Financial Spread Betting Handbook' and it had all those rules and more! Now the long quest to find a strategy thats effective and suits me.... Well if it was easy everyone would be doing it! What sort of indicators do you like to use? And if you don't mind me asking are you making consistent profits now or still finding your way? Thanks for the book recommendation, I'll look into that. Oh and don't worry I'm enjoying learning how to trade! All the best,

Sam.