The long road ahead

[Cableguy]

What a day, I've only been trading for an hour and I just lost £500, I lost £300 yesterday cos I thought it'll be a good idea to go long during a bearish day - today, I did the exact opposite.

I'm slowly bleeding away my account, I know the loss element is may be part of the "learning curve" but what a harsh way - think I'll stop trading for a week or so and reflect on my losses.

My software doesn't allow stop-losses so I've been using a "mental stop" and what a bad idea that was!

 

[pollardg]

How about switching to some form of 'paper' trading until you are consistently profitable? IMHO, you need to be confident that your trading plan & methods are sound before risking any of your own money. Losses are part of trading, but I don't subscribe to the view that you have to lose the shirt off your back before you can become successful.

As someone also in the process of starting out, I would suggest observing/paper trading for as long as you can afford to. It's important to be able to make (or at least not lose) money in all market conditions, so you should test your strategy in a variety of conditions (trending, rangebound, low volume, high volume etc.)

Wrt stop orders, there are pros & cons to both real stops and mental stops. It comes down to personal preference, but I would suggest that your software should at least give you the option, otherwise you are obliged to stay glued to the screen whenever you are in a live trade. It's also useful to be able to place a stop order to protect profits as well as limit loss!

Hope this helps...

 

[Stockjunkie]

In my view , mental stops are amatuerish and dangerous . Anything ' mental' in this game tends to play have very negative psychological effects , meaning that we tend to kid ourselves as to when we should or should not hit the stop.

invariabley it gets hit much wider than planned.

 

[dbphoenix]

Consider the threads below my name.

--Db

 

[Pat494]

Good post about paper trading
However if you really can't ( very boring and prone to personal fibbing it is ) then try the really low bets. Open an account of £500 at a low cost spread bet company like Finspreads and do 50p per point bets on an index ( S&P 500 for instance ) just to give that bit extra with no cheating and they keep your balance and history of your bets. It forces one to go through the motions instead of saying - well I could have made 50 points there etc.

 

[Cableguy]

Thanks for all the advice, it's greatly appreciated.

I haven't traded since those losses, I guess the fear element is now blinding my judgement and I've become uncertain about my limited knowledge. As you have suggested, I'm going to paper trade for as long as possible until I actually have a strategy - which, undoubtedly is the issue - guessing and "thinking" whats going to happen next.

Thanks all