My trading experience so far + advice sought

[trillionaire]

All,

I've traded UK stocks since the end of last year, making all the classic mistakes (lack of stop losses/money management, BB tips,spreads on AIM stocks ) with a portfolio going up by 14K from 20K base , and now losing it all plus another 7K .

I've read the posts here, which are better than III and ADVFN in IMHO for genuine advice and realized you have to get to know whatever you are trading with money management.

Trade2Win is primarily focused toward Forex and I have studied the cable and Euro/USD, but couldn't get into it. I am now looking at commodities and specifically just trading Gold.
Why you may ask? well everyone is doing stocks and next everyone is Forex. Though Gold is the most popular traded commodity, it still lags behind the other two by a large degree.

Rather than CFD's, a quarterly spread bet (same prices on their platform for both)for Gold is possibly my next step and nothing else provided it is liquid enough.

Any opinions of any slant would be appreciated?

 

[kwickwool]

crude oil is the most popular traded commodity by a mile....sorry to nit pick.

 

[Mathemagician]

My 2 cents: It sounds like your trading is way, way too aggressive. Even with a winning methodology, overleverage can cause you to guarantee a loss over time. Keep in mind that a 20%+ return with a 25% maximum peak to valley drawdown over a trading career are hall of fame numbers and maybe tone down the leverage a bit. Good luck!

 

[trillionaire]

Mathemagician thanks and I accept that totally.
I've over exposed my capital over two shares primarily, after getting an "invincible feeling" after making a killing on a few shares, whereby I got sucked in via BB "pumping and dumping" - not realizing Market Makers read the same stuff and got taken down heavily (learnt my lesson, so much so I'll never forget it -nor tell the wife).

Anyway, anyone trading in the second most traded commodity?

 

[tomorton]

Hi trillionaire - A personally familiar story of your earliest experiences in trading. The worst thing that could have happened to me was when my 3rd or 4th share purchase trebled. Made me believe I was the newest market genius and everything I touched would turn to gold. it didn't.

If you want to take this game seriously, there are 3 basic themes I would suggest as essential -

1. you must have an edge: this could be TA, just something to get you in at the right time in the right direction regardless of what you hear on Bloomberg: instinct, emotion, gut feeling, tips, journalists - are all bad reasons to enter a trade

2. focus on what you could lose, not how much you might win: if you only ever lose smalll you will be able to stay alive long enough to figure out how to win consistently, after that you will win big

3. you must be able to go short as well as long: then any market is a money production line for your business

Good luck.

 

[tenbobtrader]

"Rather than CFD's, a quarterly spread bet (same prices on their platform for both)for Gold is possibly my next step and nothing else provided it is liquid enough.

Any opinions of any slant would be appreciated? "



what makes you think you will do any better this time around ?

can"t get into it, get into what exactly ?

its a market, they are all markets

if you have that much money to burn while learning, pm me quick before the authorities boot me for vending or something

serious

Stop trading

get your method sorted out, start again at the beginning would be my advice

and think yourself very lucky that you still have enough cash available for the do-over

Andy

 

[Black Swan]

All,

I've traded UK stocks since the end of last year, making all the classic mistakes (lack of stop losses/money management, BB tips,spreads on AIM stocks ) /QUOTE]

Have you now stopped these "mistakes"? Your first aim should be to select the correct entries based on sound analysis and your personally defined/enhanced edge, limiting risk by way of sound MM and utilising stops effectively. Once you've managed to get this first step corrected you have a chance to deal with the emotions whilst in the trade and therefore time your exit. Until such time you have defined the reasons why you enter a trade and developed and edge to support the decision you are nowhere.
Demo account/paper trade for a while, then come back and ask a few questions.

 

[shadowninja]

Why you may ask? well everyone is doing stocks and next everyone is Forex. Though Gold is the most popular traded commodity, it still lags behind the other two by a large degree.

So what?

If the only reason you want to trade gold is because it's popular but not that popular, then what happens if you develop a system based on the current volatility and it changes? Besides, 3 years ago, gold wasn't very popular/volatile...

Just stick to one instrument and learn everything about it. Watch the chart, see how it moves, get a really good feel for it. All the technical theory is the same. Support and resistance, channels, trend lines, MAs... it's just the way it moves and interacts with the "landscape" that may be different.

As for liquidity/volatility, newbies always get sucked in by that. They see the crazy movement as opportunities to make millions... I see it as opportunities to hand over your savings.

 

[Black Swan]

So what?

If the only reason you want to trade gold is because it's popular but not that popular, then what happens if you develop a system based on the current volatility and it changes? Besides, 3 years ago, gold wasn't very popular/volatile...

Just stick to one instrument and learn everything about it. Watch the chart, see how it moves, get a really good feel for it. All the technical theory is the same. Support and resistance, channels, trend lines, MAs... it's just the way it moves and interacts with the "landscape" that may be different.

As for liquidity/volatility, newbies always get sucked in by that. They see the crazy movement as opportunities to make millions... I see it as opportunities to hand over your savings.

This is great advice, ignore it at your peril.

 

[trillionaire]

BlackSwan & Shadowninja....sincere thanks.

I'm no longer trading on BB tips nor am I trying to beat a Market Maker on a RNS release. The funds are all tied up in short term stocks that have become long term stocks...

Yes I am going back to the drawing board and starting it all again on from square one. I'm not an avid fundamental or TA follower but believe a bit of both for the end result - profit.
I am also testing stop losses and trailing ones, easier with CFD/spreadbet accounts doing it for you.

Yes I take risks, too much for my own good now. However I also recognize from many of the excellent posts on this forum that you have to you have to follow "your system" without emotion in entry/exit and money management and accept it's not 100%, you just cut your losses quickly and let your profits run.

Also regarding Gold, yes I'm looking into it because others are less so to speak. Though also because with shares and Forex pairs there is so many, though people stick to a few they get to know well. So If I am going to get to know it well , I was thinking I might as well concentrate on single commodity to practice with small real cash....

 

[shadowninja]

Glad you're not taking tips any more. Wisest decision you could have made.

As for gold, I started in stocks, then moved to gold and now trade eur/usd. About 2 years ago, I think the daily range was around 3-5 points. I stopped trading it when the daily range was about 10-15 points ie 3 times the original volatility. Eur/usd was once trading in a 600 pip range; now it's around 200. The point? There is volatility everywhere but it's all relative.

 

[Black Swan]

Yes I am going back to the drawing board and starting it all again on from square one. I'm not an avid fundamental or TA follower but believe a bit of both for the end result - profit.

..

At your stage of development you are (IMHO) some time away from being a discretionary/price action trader. Therefore analysis is/should be your bible. Devise a system based on TA first; underpinned by discipline - rigid rules and flexible trades.

Then bit by bit, piece by piece you'll probably strip it back down to the bone as you see the action/trade immediately and without hesitation with the signals/indicators supporting your decision. However, your learning curve (up and back down) will have provided you with a trading 'life' lesson that should last a lifetime...or for as long as you trade.