Let's hear from the small guy

[Mr. Charts]

"The only thing risky about investment is the investor himself."

If by investor you mean a long term buyer of stocks, then there is considerable risk involved in a bear market, imo.
Many factors are needed to minimise that risk, including sufficient diversification and hedging with long puts as an insurance against major falls.
Re-mortaging is raising your risk profile if you trade/invest for a living as I do. In an increasing interest rate environment you must be confident and experienced enough to be sure of generating sufficient income to service the debt.
Those of us who trade the US intraday constantly use leverage.

 

[techst]

Many thanks for elaborating on my eduation statement. And like you say, many factors are needed to minimise risk. But you have to learn about diversification and hedging before your able to use them. And of course there's risk involved in a bear market, just as much risk in a bull market if your playing both sides.

 

[Grey1]

Tech

Quote " An education will minimise the risk no matter how big it may seem at first. "

Well said, Our traders should give priority to risk analysis before any other kind of analysis to survive this shark infested market..

The time frame is irrelevant to risk analysis.. hence suitable for all traders..

The Chart of DISH shows an example of how traders of all time frames should be looking into before taking a trade.. The risk is dynamically adjusted and calculated bar by bar to give an over view of traders risk level...


MR CHART Quote " Many factors are needed to minimise that risk, including sufficient diversification "

So how would you diversify to reduce risk ?

 

[GETrading]

I started age 17 in the back office for Baring Securities (of the Nick Leeson fame). After one year i was made a traders assistant and then six months later given my own book to run. I traded at Baring Securities for a further 5 years when i quit to trade my own money.

I lost a small amount of money every month for 12 months until i realised that i had to pretty much forget what i had learnt at Barings and start from scratch. Trading a small book with no support required a different approach than a large book with large support!

I have now been trading my own account for 11 years on a full time basis.

A few years back speaking to my friends still in the employ of the banks, they told me that most banks require a graduate status just to get through the door and only rarely are non grads moved from the back office to the trading floor as i did. I personally felt this was wrong so i financed and trained a non graduate and am pleased to say that he is still trading today on a full time basis. I have found that with the correct support and finance most people make a resonable living in year two some quicker.... but, logically, without any support it is a MUCH harder task. (by reasonable i mean same or more than they could earn doing another job in the same location)

With most products available for cheap self execution, (the US Futures Exchanges won't be long!...i hope) i set up an office and have started financing and training non grads (and grads!). Most of them have the facility to work from home and some work abroad for part of the year. We also have self financed experienced traders who, looking for a home and some like minded company, decided to join our group.

 

[Lambchops]

GETrading - Can you enlighten me on the Curve Arbitrage that is in your profile?

 

[dmford]

Just Starting Full time

Maybee I'm being unrealistic...

Been trading part time - Read & digested The Master Swing Trader by Alan Farley (what a book!). Initially lost some cash, but have started to see things turn around, & almost recouped my losses.

Got 5K in CFD account - just finished job (IT Contractor) - planning to try & trade for a living in Jan. If it works, carry on into Feb.

With wife & 4 kids I need £2.5K p/m. Which means with 10% margin, I need net 5% movement in my favour every month. (1.25% per week)

This seems achieveable to me - anyone disagree? (cloudbase & Finlayson)

 

[Simon]

Presumably the £2.5k is inclusive of CGT, trading costs, etc.?

 

[CityTrader]

dmford- I wish you all the luck in the world, i really do, BUt aren't you perhaps putting yourself under a little too much pressure financially and time wise? What happens if your first few trades go wrong?
I trust you have enough money elsewhere to fund your cost of living ( 2.5k/month) for a few months? if not, I'd say, save up a little more till you have then try. Just my opinion.. good luck

 

[china white]

GE Trading

was very interesting to read yr post from back in November. we've got stories that r somewhat similar but still quite different.

i started trading professionally for a big german bank back in 1999, first as a juniour trader on the CFDs desk swiftly moving over to OTC options trading desk.The transition was very quick indeed since in the eyes of my new options' guvs i had a brilliant technical background and an MBA under the belt - the latter being quite useless on a trading floor unless u go with the option trading posse.

as u perhaps recall from yr time on the floor, the options crowd is mostly french speaking with a parisienne accent whilst the cash lads r mostly from let's say east of trafalgar square the options market was not that incredibly juicy in 2000 and 2001 so to make p&l i had to trade loads of cash - being formally on the options desk. which was not easy but taught me how to trade cash and futures without too much support from your immediate guvs.

i left that institution in 2002 after i was headhunted by a big emerging mrkt oil trading firm to create OTC options market in that particular emerging mrkt. spent a yr with them - just to realise that i am becoming a sort of constantly p1ssed-up sales running after local big wigs trying to pursuade them to enter into options contracts - which they were still too scared to do. loads of recognition (locally) but definitely not what i wanted to do which is trading.

left in the spring and since then trade S&P futs and options on my accounts. luv it. hvnt yet supported any newbies tho - yet

i am keenly interested in the group of traders u mentioned. wud be quite interesting to get in closer touch with u lot, unless of coz it's a closed masonic lounge

merry Xmas all

 

[dmford]

Cheers CityTrader...

I'm already good at cutting my losses quickly, & have recouped 1/2 of my beginners drawdown. Also, as an IT contractor, I've always had to have 3 mnths cash for emergencies stashed away. No real pressure, I have plenty of other skills should I need work quickly elsewhere.

Way I see it, having mastered & got bored of 2 other careers, trading seems like the ultimate in Performance Related Pay!

 

[china white]

dmford - best of luck mate! since trading is what u really believe u can do well - boldly go for it!"he who dares wins" as delboy trotter wud say - which is the most important thing in trading imo. I'd just keep in mind what CityTrader said and be extra vigilant on yr first 3-4 trades - just 2 ensure u r out of the woods b4 the mrkt (who is a b*tch) will hv a chance to wash u out.

good lk and merry xmas all

 

[dmford]

Thanx for the boost China. I've spent ages avoiding the markets cos "Everyone" says you shouldn't do it, trading is just gambling etc etc.

Well I've decided that with the proper training, effort & attitude, the rewards are there. I'm aware that it is a shark-pool, and painfully aware that "Prices can go down as well as up", but the overcautious advice trotted out by the majority is aimed at Joe Public. Even your above average intelligent guy with the wrong attitude can get wiped out.

As they say, you've got to be in it, to win it!

 

[MCGF]

Precisely!

 

[nobrainer]

Dmford, So with a 5k trading account, u intend making 600 quid per week spreadbetting??Personally, I think you will lose the lot very quickly.5k is peanuts for such a big target for a newbie,which I presume you are.Added to the fact that you need to withdraw that money just to pay your bills makes it even less likely.
Your 1 hope will be that we get a 1 directional market , then any fool ought to make money.A sensible sum to make that kind of target would be 20k imo and even then I think you'd need to have good trading instruments, platforms and quite a bit of experience.

Sorry for being harsh but I don't think I could do what you trying to achieve with 5k esp. as you will be drawing money to pay your bills.And if I can't do it, I doubt anyone can!!

Wish you the best of luck....only thing to remember is don't run any losing trades .Cut your losses and move on.Also best start praying for a massive bull run or a huge bear market.

 

[china white]

dmford

i tend to agree with nobrainer that with SB it is harder. I wud suggest u open a direct access account with IB where 5K quid = 8.5K bucks will let u run 5-6 e mini futures intraday, or IF u r absolutely sure your system is an earner (which u shud be if u go for trading), with www.TradePortal.com where the intraday margin requirement is 500 bucks - so u can take 10+ futures positions intraday.

just be very very much on your toes mate. I'll tell u what - TradePortal has only recently teamed up with J-Trader to offer trading futures on minimal intraday requirements (1 week ago) and I first transferred 10K bucks there with 10+ e minis limit just to c how it works (most of my funds r still with IB). I doubled that money on TradePortal within last week - BUT I am a rather experienced trader with a PROVEN trading system WHICH I AM CONFIDENT IN. Running 10+ e minis exposure on 500 bucks intraday margin requirement WILL WIPE U OUT IN NO TIME IF U COCK-UP!!!! just keep that in mind mate

also I wud recommend u read one of my posts called "Which pond r u in?" with a brilliant extract from across the pond - u REALLY need to know which pond ur in!

and best of lk mate!

 

[dmford]

Thanks for the warning nobrainer, but i'll stick to CFD equities(havn't looked at spreads at all) - this gives me a 50K account with 5K on 10% margin.

Lost 1K in 1st dozen trades, recouped half of it back in the next few - I was far more aware of what was going on.

To quote Farley "Attention to loss is a sign of trading experience. Attention to gain is a sign of trading immaturity"

I quickly learnt to cut positions fast before they run away from you, & move on to the next one. You can feel it happen when hope starts to replace better judgement!

Thanx for links China, but am sticking to 2-3 day swing trading for starters, with probably only a couple of open positions to manage at a time.

Thanks for everyone's response, I wanted to know if I'm being unrealistic, & it seems that I may be (to a greater or lesser extent), so I'll proceed with caution , but no-one will put me off and I will proceed.

 

[CityTrader]

dmford- confidence and belief in your own abilities are very important assets to successful trading.

 

[nobrainer]

Glad to hear that you are trading equity cfd's as your mode of trading.Still think that you ought to be daytrading rather than swing trade based on your capital/profit ratio.Anyhow, def. go for CMC cfd's as they will give you instants until you start making proper dough from them.Instants mean easy money for any good trader imo.
I don't spreadbet btw....I'd rather pay the tax , even at 40%, cos it affords me greater trading opportunities without doubt as a daytrader.
Anyhow, good luck and keep us informed if it works out!!

 

[kevin546]

I trade with D4F SB and have found how they can make life more difficult when daytrading. For example you already have a wider spread but when I increase my deal size above £25 for the FTSE the instant fills disappear and the re-quotes come into play. Regardless of what the market is doing these re-quotes are always negative. If the price moves against me while I am waiting for the deal to go through then you can expect to get the price you requested; but should the price move in my favour then I get the new price 2 to 3 points away from the price I requested. It would seem that D4F want it both ways.

Now I know for longer term holders a couple of points either side is not going to make much difference to your position, however at £100 or above this is working out a bit costly as you are effectively being changed (at £100 a throw) about £400 - £600 for the privilege of taking this deal with them. Over the year even positional selective traders will loose a lot on this basis.

I have no problem with the service they provide when dealing at £25 or under, the deals are responded to instantly.

I was under the impression that if you want more from your trading then you look to more conventional traders such as direct access brokers, (certainly for daytraders mind you there is the issue of tax).

I was surprised that you suggested D4F for CFD's, what benefit do D4F provide over SB and are they better value with regard to CFD's than the likes of mybroker. I have an IB account for futures trading so have experienced the better spreads and better fills for larger orders. I have not dealt in CFD's but it strikes me that the likes of SB firms and or those providing CFD's as well such as D4F have certain rules to suit themselves when they apply your trades. A friend was using them for CFD's but complained how slow they were at filling orders. He did trade in large amounts but it has a particular ring to it.

 

[CityTrader]

Kevin546 - sorry mate, but the name , Deal for FREE says it all. Remember there's no such thing as a free lunch, and if you pay peanuts, you get monkeys. Try another firm, pay the spread/comm that you feel your trade deserves. If you're happy with the Trabant equivalent when you really want a VW, fine, just don't expect VW reliability....