Road to disaster

[Vaco]

Hehe,

ok so thats not excatly what i'm planning to do but my money management style will no doubt earn me a telling off at some point or another.

After a loooong break from trading due to work/life commitments and stint playing online poker every min of my free time I am now returning to trading and this forum.

This journal will either be the tale of me doing as it says on the tin or it will be my rags to riches story later to be published and make me another mint

I am goint to be bruttally honest in this thread and I hope anyone who joins me on this journey enjoys it.:cheesy:

I do my trading with CMC Markets:-0 doing my trading using CFDs.

The Plan

I will be using weekly pivot points along with my basic knoledge of candlesticks and elliot wave theory to trade the dow. I've checked on the cbot website and cmc's quote for the dow matches up pretty closely.

My idea of Money management is 2.5% risak per trade as cautious or 5% as aggressive.

At 1 cfd per trade that requires £2000 or £1000 respectively, however my account only has £600 in it at the moment and I will only top up if i'm forced to.

Initial stops will be no more then 100 pts possible less but not more.

Profit target is where i become indecisive as i cant decide between letting it run or taking profits at 200pts profit. when i move the stakes up i'll do half and half.

This journal was a bit of an after thought so the first tarde is well on its way but in the future i'll try and post when i place the orders.

 

[Vaco]

Trade 1

I went long on wed night/thurs morning @12727 as this is the end of the week for my cmc weekly charts and we have 2 weeks of higher highs and higher lows and i felt that the shadow on the weeks candle would be filled over the next week. On the daily chart it looks like i've caught a bottom but as i did not take profit at 12900 the trade is still live with my stoploss brought up to break even so still everything to play for.

Below are the charts

 

[Vaco]

I've placed an order to take profit and go short at 13020 this is about 30 pts below the weekly R2 no which in my experience is often not reached and then followed by a steap decline. 13000 is also a very big no psycologically so with no other resistance above where we currently are i feel this will be tempoarilly breached. sl for the short if triggered will be 13120.

 

[Vaco]

Today the dow kept a tight range, not managing to hit the daily pp or r1, this consolidation may mean a change in direction so i've moved the target to 12920. i'm confident i will achieve this whichever way the market breaks next.

 

[Vaco]

Profit target was not hit yesterday but was still a tight range so i left the orders as they were. out today at 12920 for a profit of 193 pts I was also very surprised tha the profit target I set on monday night ended up being todays daily R2.

so 1-0 to me so far
wining trade % 100%
risk reward ratio 1.93
average wining trade 193 pts.

I know the statistics are meningless at this point but i wanted to put up what I am looking at. Heres where i would like some feedback, are there any other statistics I should be tracking and does anyone have a nice excel spreadsheet I could put them in so that the calculate everything for me?

 

[Vaco]

Trade 2

Order in to go long at 12800

sl will be at 12700

 

[Vaco]

Been a complete excel dummy i paid for a ready made trade journal/spreadsheet, its called trade smart and it only cost me £7.50 so not gonna break the bank. when filling it in it had a coloumn for commision, now i dont have to pay commisions however cmc do charge me for margin financing and on the first trade this cost me $11.28 or roughly £5.70. When i include this in the calsulation it reduces my risk/reward ratio to 1.62. This is something that I have previously overlooked when calculating risk/reward however i think it is important to include as the cost will be incurred on every long trade held over night. On shorts there will be no charge as cmc will pay me interest on these trades.

 

[Vaco]

I've moved my order entry up to 12820 as there was no downward drift overnight and i am not confident that we will hit 12800 today, more likely to go back up and i would hate to not get in for the sake of 20 pts. This may sound like a lot but when you consider my profit target is 13000 or just under it does justify missing the boat.

 

[Vaco]

Well I was wrong about us not hitting 12800 but none the less i'm in at 12820 and its gone my way, i'm looking to get out and go short at 12970

 

[Vaco]

out at 12975 for a profit of 155
have gone short at this point as well stop loss 13075 this trade will probably last into next week.

 

[Devilicus]

Good stuff so far, my man.

 

[Vaco]

Well that short brought me my first loss and its probably no coincidence that is is the first trade i placed during trading hours.

I've now placed an impulse trade long at 13029 stop at 12970 price objective 13100

after this one i will only place trades after hours i make better decisions this way.

 

[black bear]

Really Good thread , good luck with it

Hi Elefteros

Really Good thread , good luck with it :clover:

"I've now placed an impulse trade long at 13029 stop at 12970 price objective 13100"


IMPULSE :-(

I thought the last trade was a little impulse entry to if you do not mind me saying, just thought to myself the lads a little early when I passed the thread last night with jobs news being out to day and all, a little unlucky to get that high on out of hours spike perhaps pre-market.

Just an observation not a timeframe I trade in and do not no your plan etc so not having a go or being critical at all Just thought it was a quick reverse thats all.

Noticed you use Pivots to. I think they are the pre-packet ones that work levels out for you:?:

Always found using the official figs High Low Close work best, those from Cmc and IG are out quite a bit some days, if they are day ones that is :?: Find the R2 S2 ones are the best and to be honest I only use them to spot potential extremes where price might get to past own determined R & S when diverged from the norm at speed

R2 = P + (H - L) = P + (R1 - S1)
R1 = (P x 2) - L
P = (H + L + C) / 3
S1 = (P x 2) - H
S2 = P - (H - L) = P - (R1 - S1)

Hope you do not mind the observation and comments coming from errrrr wee timeframe move trader

100 pt stop me and Split would have collapsed with an attack of high blood pressure or something

All the very best with it and have a good weekend

Latter

 

[Vaco]

Black Bear,

Your comments are most welcome. you are right both trades were on impulse,this is a problem that i suffer from when I get in front of the screen during market hours, although both were impulse trades the psycology bedind each trade was different.

the first was 'i'm invincible i now what will happen next take profits from long and get greedy and go short'

the second was ' oh my god i've been stopped out and i'm missing out on the action'

Your also right that cmc pivot points are out but then so is the price they quote:-0

The strategy is to look at the market every thursday morning which is the start of the weekly chart on cmc. Evaluate the most likely direction for the following week using the 3 and 5 day wave rule from elliot wave shape of some basic candlestick reading.

I then buy or short.

The 100 point stop is to prevent wipsaw, the average daily bar is 100-150 pts and the average weekly bar is 300-400 My intention is to get a large slice of the bigger move. When I move up to 2 contracts i'll take take half my profits at or around r1/s1and move my stop to be on the rest, looking to take profits around r2/s2. I will then be able to re-enter if opportunities present themselves on retracements.

I used to trade the reversals at the various pp but this is like trying to catch falling daggers when you are placing the orders in advance so did not work out for me.

The intenion is to always go with the momentum and i should only be trading 1 direction each week unless price crosses through the open (on the weekly) to signal a change in direction.

I am tracking the drawdown on my profitable trades, hopefully a pattern will form that will allow me to reduce the stop loss. Better entries will help (should have stuck with the 13000 order rather then move up to 13025) but my fear of missing the move by trying to catch the perfect entry means that my orders a not placed too close to to support/ressistance (the strongest moves tend not to reach them)and so the stop ends up wider.

Again all views and comments are appreciated and encouraged, and the fact that you trade a different timeframe means that you are looking at things from a different perspective that i may have not cosidered.

Have a relaxing weekend all and look forward to Monday.

 

[top trader]

ELEF-

First of all good luck in your trading.
Two questions.

1) I trade UK shares and DOW/FT index. Do you intend to trade DOW only?
2) I spreadbet both. 2 points spread in DOW futures, 1 point in DAX/FT. Any reasons for CFD?

 

[Vaco]

ELEF-

First of all good luck in your trading.
Two questions.

1) I trade UK shares and DOW/FT index. Do you intend to trade DOW only?
2) I spreadbet both. 2 points spread in DOW futures, 1 point in DAX/FT. Any reasons for CFD?

top trader,

thanks for droping by, to answer your questions,

1) i only intend to trade the dow(better the devil you know then the on you dont) us trading times fit well with my work schedule as well.

2)many moons ago when i opened my cmc/deal4free account this was all that was on offer, i've since also opened up a spreadbet account with cmc but when i had both programs running at the same time i noticed that the price for the dow on the spreadbet client drifted away from the price on the cfd client. When i called the helpdesk about this they said that both clients get the same data feed and this should/could not happen and must be a glitch. I dont like glitches so i'll stick to cfds, they are regulated by the fsa and i can control my risk better and move up in smaller increments( 1 cfd = $1 per point) spreadbets is £1 per point.

 

[Vaco]

Old Rules...but Very Good Rules

Black Bear,

What happened to this post

thought it was a gooden

 

[top trader]

top trader,

thanks for droping by, to answer your questions,

1) i only intend to trade the dow(better the devil you know then the on you dont) us trading times fit well with my work schedule as well.

2)many moons ago when i opened my cmc/deal4free account this was all that was on offer, i've since also opened up a spreadbet account with cmc but when i had both programs running at the same time i noticed that the price for the dow on the spreadbet client drifted away from the price on the cfd client. When i called the helpdesk about this they said that both clients get the same data feed and this should/could not happen and must be a glitch. I dont like glitches so i'll stick to cfds, they are regulated by the fsa and i can control my risk better and move up in smaller increments( 1 cfd = $1 per point) spreadbets is £1 per point.

Thanks for the reply.

I get better return from shares than indices.
Last week I was trading WOS, HBOS,PSN and BAY.

 

[Vaco]

Thanks for the reply.

I get better return from shares than indices.
Last week I was trading WOS, HBOS,PSN and BAY.

I take what i can get,

for me the downside to shares is

a. larger margin requirement 5% vs 1% for indicies and

b. Holding them overnight is a much more risky proposition as they are more prone to gaps which could miss your stops.

 

[Vaco]

orders are in to get me out at 13120 which would give me 91 pts points for this trade stop is still at 12970, very poor risk/reward trade at 1.54 before finnancing costs.

Everyone out there not working today enjot the bank holiday