So, I'm making a little, but not a lot...

[rnicoll]

Mostly making money now, although I have the occaisional dumb day (today) where I trade rather because I want to, than because I see good opportunities, and the market neatly swallows my profits from the day before.

So... any advice on second steps? More technical analysis? Focus on the psychology stuff and not trading when I know I shouldn't? Get more sleep?

 

[Technically Fundamental]

I've done exactly the same thing. From the outside the answer is easy. Stick to your trading plan properly, get more sleep and don't be greedy.

 

[rnicoll]

Good to know I'm on the right plan

Thinking I'm going to write down my trading plan as a checklist, and print a few dozen copies off so I have to sit there and check it all off before I trade...

 

[86834H]

What markets are you trading?

I've written a lot before about knowing when to trade and when not to trade. A lot of the new guys fall around here because they get caught up in the general chop of price action and fail to see the bigger picture.

If it's just a case of you're trading when you KNOW you shouldn't be, then that's just down to personal discipline that you have to teach yourself.

 

[rnicoll]

What markets are you trading?

I've written a lot before about knowing when to trade and when not to trade. A lot of the new guys fall around here because they get caught up in the general chop of price action and fail to see the bigger picture.

If it's just a case of you're trading when you KNOW you shouldn't be, then that's just down to personal discipline that you have to teach yourself.

I'm on index futures primarily. I was doing currency trading for a bit, because I was trading out of normal hours and it was therefore useful to have a 24/7 market, but mostly index futures. FTSE 100, DJ, S&P.

Did better today. Missed about £200 in profit by being a little too cautious, but better too cautious than too risky

 

[new_trader]

Mostly making money now, although I have the occaisional dumb day (today) where I trade rather because I want to, than because I see good opportunities, and the market neatly swallows my profits from the day before.

So... any advice on second steps? More technical analysis? Focus on the psychology stuff and not trading when I know I shouldn't? Get more sleep?

Mastering yourself is a difficult aspect of trading and I sometimes break my own rules. Trader boredom and feeling the need to make a trade to justify your time at the screen is a common problem. When you've been sat for hours and the market is near closing and you haven't made a trade you begin to think that you've missed something or that you are doing something wrong when the reality is you should be abstaining until your indications to trade are clear. Another problem is when you miss an opportunity and then attempt to make up for it. This is bad. Don't do it. You should only enter a trade because it is the right thing to do and not because you want to make money.

 

[0007]

Mastering yourself is a difficult aspect of trading and I sometimes break my own rules. Trader boredom and feeling the need to make a trade to justify your time at the screen is a common problem. When you've been sat for hours and the market is near closing and you haven't made a trade you begin to think that you've missed something or that you are doing something wrong when the reality is you should be abstaining until your indications to trade are clear. Another problem is when you miss an opportunity and then attempt to make up for it. This is bad. Don't do it. You should only enter a trade because it is the right thing to do and not because you want to make money.

After you've got yourself some kind of reasonable system this is what it's all about. I strongly agree with above based on my own experience. Ignore at your peril (and wallet) IMHO.

 

[candles]

After you've got yourself some kind of reasonable system this is what it's all about. I strongly agree with above based on my own experience. Ignore at your peril (and wallet) IMHO.

what about automating your trading? That's something that ive thought about alot recently...

 

[0007]

what about automating your trading? That's something that ive thought about alot recently...

If you can design the perfect algorithm then this takes the human element out of it. As for the perfect algo........ they're still trying aren't they? (Done it for aircraft where the computer flies better than the pilot in certain situations - not much good for Hudson River though!)

It does raise the point that if you have a good system with good rules that you religiously obey (because you are a disciplned trader) then it should be ok in automated form. But computers aren't perfect and neither are rules so there will always be the situation where human common sense is required amd you need to over-ride your rules. A situation which often happens to me is that I set a stop (according to carefully considered analysis etc etc blah blah) but when I see the trade going wrong I get out early - that's judgement based on visual analysis of real-time chart: something the human eyeball / brain combo is very good at and the computer isn't. Very difficult to program that - they haven't got facial recognition perfected yet; as for trading charts???

The big thing with doing it yourself is that you don't have to look too far for the reason of failure.

I think you have a point - what do those who have tried (on a personal level) think?

 

[ellieCAPRI]

Good to know I'm on the right plan

Thinking I'm going to write down my trading plan as a checklist, and print a few dozen copies off so I have to sit there and check it all off before I trade...

Care to share yout ftse strategy?

 

[rnicoll]

Care to share yout ftse strategy?

*laughs* Sure, but don't blame me if you shoot your own foot off with it (I'm basically back where I started, so while I may have made enough to cover commission it's not exactly fantastic).

So, this is a trend-reversal system. The idea is to look for signs the market is overheating/overcooling, and then look for a signal of it changing, and hold on through to it hitting the SMA again.

1. Open up a 4 hour chart, minute bars.
2. Add Bollinger Bands, sample size one minute, 120 samples (yes, 120), 3 standard deviations from mean.
3. You're looking for the market hitting the top or bottom band. That's your first signal.
4. Once it starts getting close to hitting either band, you want to put your orders in. I do this as a triple of limit, and attached limit/stop order.

The first limit order goes somewhere near the band. Push it out a little further if you think the market will overshoot (moving fast), a little inside band if you think it won't go far. The close limit order goes just on the near side of the 120 minute SMA. Lastly, the stop order goes about 10 points further out than the entry order.

Check list:

1. Is there reason to think the market is breaking out of a trend, instead of reversing? If so, abort.
2. Is the distance from the band to the SMA too small to make enough profit for it to be worth the risk?
3. You have three turn-arounds a day. Is this trade worth being one of them? If not, abort.

and that's fairly much it. Do tell me if it works for you or not.

 

[rnicoll]

what about automating your trading? That's something that ive thought about alot recently...

Did about 6 months work on an auto-trader (coming from a computer science/statistics background). So far, I've basically come to the conclusion that it's not worth the effort; the time spent to write an auto-trader as an individual is likely to exceed the effort to just do the trading yourself, for an equivalent reward. When I have more time I may well come back to looking both at learning auto-traders and looking at frameworks for faster trader development, but right now not entirely convinced by full auto-trading.

I _am_ looking at an assisted trader (trade by wire). Thinking something that says "Okay, I've been scanning the market, and these dozen stocks/futures/whatever look like they're going to be trade-worthy soon.", you select one and it shows you the price, the analysis, its entry/exit prices. You then tweak values to taste (or reject outright if you think it's missing something from the fundamental analysis), and hit go.
I reckon it can reduce my time per trade to about 2-3 seconds (which means I miss less opportunities) and increase my accuracy.

 

[ellieCAPRI]

*laughs* Sure, but don't blame me if you shoot your own foot off with it (I'm basically back where I started, so while I may have made enough to cover commission it's not exactly fantastic).

So, this is a trend-reversal system. The idea is to look for signs the market is overheating/overcooling, and then look for a signal of it changing, and hold on through to it hitting the SMA again.

1. Open up a 4 hour chart, minute bars.
2. Add Bollinger Bands, sample size one minute, 120 samples (yes, 120), 3 standard deviations from mean.
3. You're looking for the market hitting the top or bottom band. That's your first signal.
4. Once it starts getting close to hitting either band, you want to put your orders in. I do this as a triple of limit, and attached limit/stop order.

The first limit order goes somewhere near the band. Push it out a little further if you think the market will overshoot (moving fast), a little inside band if you think it won't go far. The close limit order goes just on the near side of the 120 minute SMA. Lastly, the stop order goes about 10 points further out than the entry order.

Check list:

1. Is there reason to think the market is breaking out of a trend, instead of reversing? If so, abort.
2. Is the distance from the band to the SMA too small to make enough profit for it to be worth the risk?
3. You have three turn-arounds a day. Is this trade worth being one of them? If not, abort.

and that's fairly much it. Do tell me if it works for you or not.

Ditto.. I have my first taste of spread betting (Capital Spreads) 2 months ago. Thanks for sharing but afraid you're conversing in a different language!! LOL ..I am not familiar with all the trading jargons!

Obviously i am a newbie, taking baby steps and trying to understand the link between the US-UK markets now. I am interested in FTSE outside trading hours, and trying to develop a strategy of some sort --

Strategy 1 - Just before the FTSE opens at 0800, can one forecast wheater it will shoot up or down depending on the US Markets movement overnight..

Strategy 2 - If i can place a trade before FTSE's spread closes at 2100 and buy/sell depending on the US Markets movement at the final 2 hours..

Any advises on these??

 

[rnicoll]

Strategy 1 - Just before the FTSE opens at 0800, can one forecast wheater it will shoot up or down depending on the US Markets movement overnight..

You could also look at whether the market has been going up/down in a row for 3+ days, which increases the likelihood of a reversal. I'm big on reversals. Mostly though, spread bet companies will try to price their stuff close to where the market should be, so you'd have an uphill struggle to profit this way. I made a few hundred doing spread betting with IG Index (who personally I would recommend - and not just because they'll give me a bottle of champagne if I refer people, I swear), but most of that was from doing fundamental rather than technical analysis.

Strategy 2 - If i can place a trade before FTSE's spread closes at 2100 and buy/sell depending on the US Markets movement at the final 2 hours..

Any advises on these??

Again, difficult with a spread betting firm, as you'll probably find the spreads are too wide outside of 8:30-4:30 to make a reliable profit, but certainly worth a try. Also worth considering for just practicing; if you're trading futures, for example, the FTSE 100 rolls in at multiples of £10/point, which is a little more nerve wracking than the £1/point minimums more likely in spread bettting!

 

[ellieCAPRI]

Also worth considering for just practicing; if you're trading futures, for example, the FTSE 100 rolls in at multiples of £10/point, which is a little more nerve wracking than the £1/point minimums more likely in spread bettting![/QUOTE]

That is new! I have only traded on Rolling Day so far (£1)... But i do noticed that in Capital Spreads, FTSE Rolling Day and FTSE Future's charts are similar

 

[ellieCAPRI]

I made a few hundred doing spread betting with IG Index (who personally I would recommend - and not just because they'll give me a bottle of champagne if I refer people, I swear), but most of that was from doing fundamental rather than technical analysis
You would be pleased that i have made inquiries with IG and if the champange offer is still on and i were to open an account with them, it'll be yours I have problem with Capital Spreads as all their stop losses are NOT guaranteed -- I've lost A LOT of money in a single trade because of that. Do you know if in IG, the stop losses are guaranteed even outside the trading hours? (i'm trading FTSE, NASDAQ)

 

[rnicoll]

I have problem with Capital Spreads as all their stop losses are NOT guaranteed -- I've lost A LOT of money in a single trade because of that. Do you know if in IG, the stop losses are guaranteed even outside the trading hours? (i'm trading FTSE, NASDAQ)

They offer guaranteed stop losses, but they're an extra charge (3 pips per trade). I believe they trigger outside market hours though, yes.

 

[Calinor]

Yes do they do trigger outside market hours on IG, but they are not guaranteed (unless you pay the premium when you open the bet) so a price still has to hit your actual price and not jump over and they widen their spread to I think 6 points as soon as the US market closes. Also it won't trigger your stop if there is a weekend gap.