Maybe just lucky?

[Lilley]

Hi all. I'm new to this forum and also trading. I've started trading in commodities and I'm not sure how really but I only started beginning of August and I've made a profit of 3200. Ihave a feeling I may have just had been a bit lucky as picked oil which has gone up. I'll be upset if I start to do crap as I started doing it from desperation as don't want to return to my job.
I only invested 800 quid though so I'm real pleased. I have read a couple of books since I started...shares made simple.

 

[tomorton]

Hi Lilley - Great story. well done on a successful first attempt.

Although it does sound as if you were lucky - you bought oil when it was low and it then turned around and went steeply up - the grain of a strategy is contained in what happened. Assuming you didn't know oil was going to go up, you could have waited for it to show it was going up and then bought in. Lower total return but much lower risk and very low effort. This is called trend-following, its a legitimate and consistent (but undramatic) way to make money.

The other "gem" I would offer up is don't get carried away with a big £ win. Remember the story that if you give a man a fish he 's got lunch but if you teach him to fish he can feed himself for ever. Well, what you've just done is caught a massive great fish, but do you know how to be a fisherman? In some sense, the measure of successful trading isn't £ back from the trade, its how closely you followed your plan: one big trade buys you a new kitchen appliance, good trading will buy you a house.

 

[Lilley]

Great reply tomorton. I appreciate your response. Wise words indeed
I think I must have a knack of this trading malark as I've made another 2 k today. Can't believe it. Don't want to get carried away but I'm doubling my money every week. Do you make a living from trading full time Then? I am using this site called plus 500. I can't face going back into being a social worker right now so I have to keep trying. I'm using stop losses as much as I can. How long have you been trading for

 

[timsk]

. . . I think I must have a knack of this trading malark as I've made another 2 k today. Can't believe it. Don't want to get carried away but I'm doubling my money every week . . .

Hi Lilley,
Welcome to T2W.

If you're making returns this big, then you're setting yourself up for a catastrophic blow up. That's trader's jargon for losing all your money. In your case, you could end up losing not just your profits, not just your initial balance, but money you don't have. If you're with Plus500, I assume you're either spread betting or trading CFDs. Either way, almost certainly you are massively over leveraged and, if you're not very careful, you could end up losing more than just your initial deposit.

Assuming you're trading real money, the best advice anyone (and everyone) will give you is to treat it as a lucky windfall - like winning the lottery - and withdraw all your profits now. Then go back to demo trading paper money having instigated a sound risk and money management strategy. For an insight into how to set about doing that, read this sticky: Essentials Of 'Risk & Money Management'. At the moment, you haven't got one so, in effect, you're gambling pure and simple. In the medium to long term that never, ever, ends well. So, as you suspect, your success is down to beginners luck which won't last indefinitely.

Sorry to be the bearer of bad news, but the market simply doesn't allow traders to trade the way you're trading for very long. I wish you well and hope you manage to survive without losing your shirt.
Tim.

 

[Lilley]

yes i am trading CFD's on this site called Plus 500. I started with 800 and have collected £70 in bonuses from them as they give you a £20 bonus when you join and deposit one hundred and then i added a further 600 pounds to my initial 200 deposit and they give you £50 bonus then. I honestly think money can be made from it so long as you're sensible. I will definitely read what you have sent me thank you. I only buy what i see to be growing and then add a stop loss to the value of my initial level that I bought at (if it lets me). Some of the commodities are so volatile though that it is difficult. As you get more money in your account, the site naturally increases your order of units when you click buy but I adjust this to a lower amount. Today i did so well as obviously i have more money in there now and i raised my stop loss up as the commodity grew and then as soon as it started to fall again, i took a profit of £2098. How would you end up losing money that you don't even have though. I don't get that part of what you've put. If i was say to fall to zero then the position just closes so how can they touch your assets? I will let you all know how i continue to get on. I am new to all this but have read a few books to seek to educate myself.

Yeah i am trading real money. Ive got a serious lot of money in my demo account but its partly as i placed several orders and then did not go back and check it for a few days and what with oil growing, the fake money has grown from 20 to a quarter of a million haha

 

[Dowser]

I only buy what i see to be growing and then add a stop loss to the value of my initial level that I bought at (if it lets me).

What happens if it doesn't let you? What if you buy something and then it falls 1000 points?

 

[tomorton]

Lilley, tim is right you're making money as if it grows on trees. Except it doesn't and it isn't you that's making these exceptional gains, its your good luck.

If you were a consistently winning trader who hits a run of bad luck, the answer is to keep trading, probability will carry you through the damp patch. But if you're not a consistent trader (and you can't be as you've only just started) and you hit a lucky run of trades, the answer here is to stop trading and work on consistency - otherwise, probability will just kill your account.

 

[NVP]

Lilley,,,,,,welcome to trading

We can all give you our thoughts here but the only one you will learn from is mr market

At least you have accepted you are lucky so far.......so respect

Continue to hone the edge you are using,,,,,,and limit stakes to protect the wins you have......also don't leave to much in any 1 brokers account......you may not see it again if they fold.....

Good luck
N

 

[timsk]

. . . How would you end up losing money that you don't even have though. I don't get that part of what you've put. If i was say to fall to zero then the position just closes so how can they touch your assets? . . .

Hi Lilley,
I've had a look at Plus500's Risk Disclosure Notice (RDN) and you're quite correct in thinking that you can't lose more than you have on deposit in your account. Apologies for misleading you on that point. It's quite unusual for Spread Betting and CFD firms to offer this facility, and those that do only introduced it quite recently in light of the SNB fiasco in January 2015. So, if you ever switch to another broker, don't just assume they'll offer the same terms and conditions.

Having said the above, it is still possible for you to blow up your account even if you have stop losses in place. In a fast moving market these may not trigger. The only way to safeguard against this is to use guaranteed stops - which Pluss500 do offer on some instruments. From their RDN:
"7.5. Unless you have taken steps to place an absolute limit on your losses by setting a Guaranteed Stop, it is possible for adverse market movements to result in the loss of the entire balance of your Trading Account. Guaranteed Stops are not offered on all instruments, but there are other risk management tools available e.g. by placing Close at Loss or Close at Profit orders on your account that will help you mitigate your losses. However, please note these are not guaranteed if the rate changes by more than a single pip."

So, some good news there, but the general points made in my previous post still apply I'm afraid. Doing what you're doing currently isn't a long term solution to your employment issues. If you are to survive as a trader - let alone prosper - you'll need to approach it in a very different way.
Tim.

 

[DrSafari]

I am also trading on plus500, well was, I withdrew most of my money. Anyway, commodities there are massively leveraged. I believe it was something like 1:159 (I cannot check anymore cause due to some law change there is no leverage allowed anymore for Belgian users as of yesterday) . Under no circumstances should you hold a position overnight or over the weekend because prices can gap beyond your stop loss and you could lose everything.

 

[Lilley]

thank you all. yes they are leveraged i believe. i think i may be a bit screwed already...bought some sugar thinking it was at its base and it bleeding well dropped a bit more. i will have to keep the positions open you see now in the hope it rises back up on monday. I'm sure it will hit 20 again at some point but i guess you never know. you can keep the positions open but they charge you a premium for the privilege. i think what is best is if i withdraw my profits and just keep 1K in there as i have definitely had some flukey luck what with picking oil. i had heard that oil was at a low of 39 dollars so thoughts it might be fairly safe bet and could rise but that was as far as my knowledge goes. I spoke to someone called IG today who said that some people do what is called spread betting which is not taxable..unsure if this uses this leverage thing. he said that they make a profit from people who do have success as they are taking a percentage in the spread?
have a good weekend. ill be worrying about the old sweet stuff now.

 

[tomorton]

Oh Lilley - after everything we said!

 

[Lilley]

Yes i know tomorton teehee but i got tempted to buy some sugar and it dropped so suddenly before i had chance to put a stop loss. Im pretty confident it will hit 20 points at some point next week and my profits will be safe again. It has been hitting 20 very regularly but it closed today at about 19.76 i think.. The mistake i made today was buying at 20 before waiting to see if it had bottomed out which it had not. I've been thinking today i will withdraw my 4K and see how i go with starting from scratch. i have already withdrawn 1072 in profit so have lost nothing really. even if i can make 5K a month that is a 60K salary per year which is far more i got from working as a social worker. goodbye all. I will keep you posted with my profits info (or not as case may be) haha
love to all

 

[timsk]

Hi Lilley,

. . . i will have to keep the positions open you see now in the hope it rises back up on monday. I'm sure it will hit 20 again at some point but i guess you never know. you can keep the positions open but they charge you a premium for the privilege.

Like any specialist subject, trading has it's own jargon. This includes it's own set of expletives. To the outside world, they aren't really offensive but, to traders, they are very rude indeed. One common denominator between standard expletives and traders' expletives is that they tend to contain four letters. The one I've highlighted in red is probably the worst of the lot. The minute you start doing what you're doing here (sorry, I can't say the word), you're as good as doomed.

think what is best is if i withdraw my profits and just keep 1K in there as i have definitely had some flukey luck what with picking oil. i had heard that oil was at a low of 39 dollars so thoughts it might be fairly safe bet and could rise but that was as far as my knowledge goes.

Very wise. And yes, you've enjoyed some 'flukey luck'. As you imply, at the moment, you are just gambling. Nothing wrong with that so long as you understand and accept that your run of good fortune won't last indefinitely and certainly won't allow you to make consistent month on month returns in lieu of a salaried job.

I spoke to someone called IG today who said that some people do what is called spread betting which is not taxable..unsure if this uses this leverage thing. he said that they make a profit from people who do have success as they are taking a percentage in the spread?

IG is the largest and probably best known of all spread betting firms. It was started by Stuart Wheeler who is credited with coming up with the original concept to enable people to speculate on the price of gold without having to buy the actual physical commodity itself. If you want to learn more about the relative pros and cons of spread betting and CFDs, check out this FAQ: What are the Pros and Cons of Spread Betting Vs CFDs?

Yes i know tomorton teehee but i got tempted to buy some sugar and it dropped so suddenly before i had chance to put a stop loss. Im pretty confident it will hit 20 points at some point next week and my profits will be safe again. It has been hitting 20 very regularly but it closed today at about 19.76 i think.. The mistake i made today was buying at 20 before waiting to see if it had bottomed out which it had not.

Understanding where price has been and what buyers and sellers did at various levels and formulating a view about what they might do in future - is a reasonable starting point. However, you can't know for sure what will happen in the future and it's absolutely imperative that you protect yourself in case your assessment is wrong. Failure to do that will, definitely, result in (financial) pain, tears and regret.

I've been thinking today i will withdraw my 4K and see how i go with starting from scratch. i have already withdrawn 1072 in profit so have lost nothing really.

Your best idea so far Lilley. Do it!

even if i can make 5K a month that is a 60K salary per year which is far more i got from working as a social worker. goodbye all. I will keep you posted with my profits info (or not as case may be)

Unfortunately - and unlike us lot here on T2W - the market couldn't give a toss about what you want. (Hint: how many letters has that word got!) If you have a robust trading strategy and if it is supported by a robust risk and money management strategy and if it has been demo traded successfully and if it has been traded successfully using small amounts of real money - then it may work. Currently, you don't appear to have any of the above in place, so I am completely confident in saying that everyone on T2W with any trading knowledge or experience will tell you that you've got a snowball's chance in hell or realising your goal. Even if the ifs are all lined up, realising your goal will be determined by many other factors, some of which are addressed in these two FAQs:
How Much Money Does a Trader Need To Start Trading?
Realistically, How much Money can I Expect to Make?

Many congratulations on your success to date Lilley, but please take on board that it's just luck that won't last if you continue to trade in the way you've been doing.
Tim.

 

[sminicooper]

Originally Posted by Lilley
. . . i will have to keep the positions open you see now in the hope it rises back up on monday. I'm sure it will hit 20 again at some point but i guess you never know. you can keep the positions open but they charge you a premium for the privilege.

Hi Lilley,

Like any specialist subject, trading has it's own jargon. This includes it's own set of expletives. To the outside world, they aren't really offensive but, to traders, they are very rude indeed. One common denominator between standard expletives and traders' expletives is that they tend to contain four letters. The one I've highlighted in red is probably the worst of the lot. The minute you start doing what you're doing here (sorry, I can't say the word), you're as good as doomed.

One of the best pieces of advice a trader can heed. If it hasn't been seared into your brain through experience already, then take the easy way out and listen to Timsk.

 

[tar]

Didnt read any post here but from the title i can tell , yes it is pure luck , it happens all the time anyone can turn 1000 to 5000 in one month - i have made much more than that in my earlier years - .

However it may not happen from the first attempt , some get lucky and make it from the first attempt , keep doing the same and you will give everything back plus some , and thats applicable to all traders not just the op .

It is just a numbers game !

 

[NVP]

Most people,in trading competitions have to trade big and bold........otherwise you won't get near the prize money ........

It's not the real,world......just tournament nonsense

N

 

[Kira12]

Anybody already tried to use social trading platform from liteforex?

 

[tar]

Most people,in trading competitions have to trade big and bold........otherwise you won't get near the prize money ........

It's not the real,world......just tournament nonsense

N

Thats fxcm's live accounts monthly contest

 

[Lilley]

yes they are leveraged still to that level, and sadly everything i touch is not working at the moment. I think its going to rise, it falls, i then sell and it goes back up and vice versa. i have closing my account for now...well at least taking out all the money as its getting me a bit down today. My account says profit stands at around 3700 this month which is good so i cannot complain. i just picked the right market at the exact right time it seems...OIL! I am interested in looking at USA wheat as it seems quite low and i may put some of my profit into some long term shares.