The Trials and Tribulations of a Trainee Trader

richy96

Member
54 2
If you can consistently achieve the sorts of results you are posting, then yes, you could produce the returns you are looking for.

The trouble is, I'm not convinced that you can.{/quote]

And in total honesty I'm not convinced I can either!

I have heard this stated before that it is easier to make impressive gains (percentage wise) on a small acount than it is on a larger account and i imagined the reasons to be pretty much as you explained.

Regards the chart you posted I take your point, I am not sure how one can really deal with eventualities like that.

With backtesting I have not figured how that could be done - what Iam doing is taking news reports (I use newsnow.co.uk as that trawls a lot of news sites and lists stories under categories so it's easy to find what I am looking for

Anyway for example I am shorting Wheat as one of my current favourite trades - usually after a jump up I try to get in for a few hours or more and it is working OK for me right now

I am doing that however based on current news and watching the charts for promising entry points. I don't understand how I could back test that sort of strategy

I'm also doing a similar thing on Nat Gas but that did bite me this week when all the news indicated a drop in price on Thursday so I was short, then there was something of a stampede as reported here http://www.bloomberg.com/news/2014-...jump-after-below-forecast-stockpile-gain.html and prices rose 5.6% very quickly

Now in this case I only had a small number of contracts but it still put me at a hefty loss of about £40.

How i dealt with that one is rather than panic I considered all other indications are that still showing gas prices should fall and decided to hold out. Losses slowly moved up to about £60 but with one eye on the news by the next day they had fell back. Latest reports suggest prices should fall back further
http://online.wsj.com/article/BT-CO-20140613-709811.html

I don't know if i will get out of that one with a loss (hopefully a smaller one) or a profit next week or just have to give up on it as a bad deal.

I'm basically trying to explain my method of dealing with bad things if they happen - rightly or wrongly I try to rationalise them rather than panic once the horse has already bolted and make a decision if things seem likely to turn back around or not.. Is that good or bad strategy? I don't know yet but it feels sensible to me

Oh as you asked I am trading CFDs on a margin account, not a credit account, so the worse that could happen is I blow my account and would have to refinance it to start again

That also feels a sensible thing to me.

Rich
 
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toknees

Junior member
22 3
Oh as you asked I am trading CFDs on a margin account, not a credit account, so the worse that could happen is I blow my account and would have to refinance it to start again

That also feels a sensible thing to me.

Super-sensible. Your risk could not be more clearly defined. Bravo.

Regards the chart you posted I take your point, I am not sure how one can really deal with eventualities like that.

In one sense, you already are by having your account set up like that. How I deal with it is by limiting my position size and leverage so that any disaster scenario can only eat a finite amount of my trading capital - an amount I know I could survive if necessary.

With backtesting I have not figured how that could be done - what Iam doing is taking news reports (I use newsnow.co.uk as that trawls a lot of news sites and lists stories under categories so it's easy to find what I am looking for

I don't trade news. Partly for this reason, and partly because it's factored in too quickly to be of use in my methodology.

How i dealt with that one is rather than panic I considered all other indications are that still showing gas prices should fall and decided to hold out. Losses slowly moved up to about £60 but with one eye on the news by the next day they had fell back. Latest reports suggest prices should fall back further
http://online.wsj.com/article/BT-CO-20140613-709811.html

I don't know if i will get out of that one with a loss (hopefully a smaller one) or a profit next week or just have to give up on it as a bad deal.

I'm basically trying to explain my method of dealing with bad things if they happen - rightly or wrongly I try to rationalise them rather than panic once the horse has already bolted and make a decision if things seem likely to turn back around or not.. Is that good or bad strategy? I don't know yet but it feels sensible to me

I'm not sure this is a good strategy, particularly if you intend to upscale your trading. I think you'll find that when you get to meaningful amounts of cash, you'll be bouncing off the walls with all the stress!

I'd suggest you plan the trade first, and then trade the plan...
Why are you entering (presumably because you expect an action)?
At what point (time & price) are you prepared to accept you are wrong?
At what point are you looking to exit the trade if you are right?
Under what circumstances are any of the above allowed to change?

Work it all out in advance and then you'll know what to do at any given point and won't find yourself having to second guess.
 
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richy96

Member
54 2
Hi guys

Just popping in for the weekly update

I'd like first to chat about those short Nat Gas positions that I had open which I mentioned last week that were causing me a big problem

If you look at the attached chart the problem occurred at point A when the weekly Nat Gas report came out on Thursday.

Now here is something I can tell you all beginners.

Don't have multiple positions open just because you decided to average down a bad position when you know full well there is a report coming out that could cause a sudden change in price!!!!! And if you didn't know a weekly report was coming out? Well you damn well should know if you are gonna trade a share or commodity so do some homework first!

Yep I knew it was coming, yep I told myself I would close at least one position at a loss if needs be before 3.30pm to make sure my exposure was not too great, yep i understood the very good reasons why this would be a prudent and sensible thing to do, and did I listen to my own concience and what it was telling me? Nope!

So lo and behold - multiple bad short positions suddenly become multiple very bad short positions!

My saver here - at least the positions were for small contract sizes (each one was the mininimum size I could trade on my platform) so I was not in danger of actually blowing the account

So this is where I left off last time.

As I mentioned... and you also point out Toknees this is not necessarily a good strategy.... but anyway rather than panic I instead had a look at the news reports which I linked in my previous post here and decided the underlying 'vibe' was that Nag Gas prices were more likely to fall. As you can see they actually went up further for a while then did indeed come down - but by the end of the week things had really turned around

For some days I just left well alone then as things came into my favour and I had gained some confidence back because of further news reports I placed a few more intraday trades (some were long so I was hedging my short positions rather than taking on more risk) and I got a few good results out of some of the humps bumps and bounces you can see on the chart.

The eventual result of taking my time with this is that I turned around what could have been a £120+ loss on Nat Gas into £3.68 profit. In doing so I accepted some losses but made them back (hedged) from some fairly decent gains and some much reduced losses.

My biggest loss of the week came this Thursday, just before 3.30pm when I took a £32 loss on one position Nat Gas to lessen the impact of me playing russian roulette with the weekly report again.

In this instance it seemed the most sensible thing to do and I actually hit the button this time and I stand by that, despite the fact that prices fell this week on the report and later that eveneing I would have been out at a profit on that one.

But if I had not closed that one down then could I have said I learned my lesson from last week? No!!

Also I had to bear in mind that the Nat Gas futures expire on Tuesday 24th at 6pm so I need to get out of all positions before then

So I take on your advice toknees, and I am not sure how it would pan out on a larger account but in this instance at least things did pan out as I hoped, and the news reports during the week suggested they would.

I do have a tendancy to think of the numbers more as percentages of my account rather than amounts of cash so if I was dealing with ten times the account size and ten times the position size/amounts would I be stressing out more?

I don't know (I dont' feel that I would) but that is something hopefully I will get to find out at some point - in fact I actually find live trading quite realaxing and have a rather pragmatic approach to it which may sound odd but it is honestly the way feel.

OK so here is how the week went. Given the fact I had to take some losses over the Nat Gas positions I ended up with a lower success rate than previously

But things worked out OK overall

Total trade 34 (28 good, 6 bad)
Success rate 82.5%
Total Profits £88.13 (average profit £3.15)
Total losses £62.62 (average loss £10.44)
Net weekly profit £26.11

So even though i had some high losses the profit for the week was a bit over double my projected £12

Running total profit for the three weeks on my live account = £88.29 which is a lot more than my projected £36 for three weeks

OK so not quite such a good profit this week, but not bad either. This was the most challenging week I have traded on my live acccount by far.

Yes it's only a small account and the amounts I am making seem rather insignificant, but hopefully the experience itself will be a good one for the future

Right now I am off to spain for the best part of 4 weeks (cos the north west english climate is rubbish) so I won't be reporting in... but it doesn't mean i have dissappeared. I do hope to get a few trades in while i am on holiday as I can trade from my mobile if I get wireless internet access

I'm gonna have to trade a different way though - with orders and profit calls - as I probably won't be spending too much of my time looking at a screen

So that's it for now - back in a few weeks


Rich
 

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