Jump to content

Trying to get it right from day one - Learning as I fail


Recommended Posts

HI J and J 

exellent ideas . I thought the whole idea of trading was to make money . How do u make money when u trade for one hour only . Fasinating .Good luck Trading and all the best. 

Regretfully i cannot make money trading for one hour 

  • Like 2
Link to comment
1 minute ago, bapu1 said:

Regretfully i cannot make money trading for one hour 

I guess it depends on what kind of trading you're doing -- it sounds as though you're doing Day trading,  but my timeframes are slower - position and swing trading

Link to comment

Good luck on both counts - my only comment would be to always remember most of what is published out there is complete baloney, so bear that in mind when researching

Most fund managers fail to beat the Index they compete against and most trading strategies don't have a positive expectancy BUT all that being said you can still win, but very very few people who try do, there's always room in the 5% club though for new members

On the trading front - test test test trading methods, make sure they have a positive expectancy and just robotically trade, no emotion, nothing, trade appears take it, manage it totally robotically - the method needs to know when to take the trade, how to manage it and how to exit it with little thinking and absolutely no emotional thinking

 

  • Like 1
Link to comment
16 hours ago, jandj said:

I’ve just started using the IG platform and am having fun with it, after a week or so of playing with it.  I’ve opened two accounts and have just opened ten positions.

I’d thought as a COMPLETE newbie, I’d share my experiences here in “real time”, which will hopefully be amusing/informative for some of you.   I welcome comments, but no flames, please!

Background:

I inherited some money a couple of years ago and stuck it all in a savings account.   Fed up with the paltry interest rate, I decided to take a proportion of it and invest it in shares.

I set a conservative goal, which is to make 6% return in 12 months through a mixture of 50% investments and active 50% active trading.  On the latter, I’m prepared to risk 20%, hope to double (i.e., 5:1).

At the end of the 12 months, I’ll look at my two accounts’ performance and if necessary, revise my goals.

I have ten years’ experience working full-time in hedge fund risk, but very little of their trading strategies is relevant to me – I don’t neither the money nor the experience required to do anything like that.

The main indicators I look at are MA, volatility and volume.  Volatility also dictates my stops (so I can ride the troughs).  The limits are all set to 5 times the stop.

Here are the rules I set myself before starting:

  • Steer clear of low volume stocks.
  • No shorting (or equivalent).
  • Only trade stocks where I believe I understand the underlying market sector and think that it’s a growing one.
  • Try to trade more than one stock in a sector, or trade ETFs.
  • Turn every ****-up into a lesson.
  • Don’t get all “Rorschach” when looking at charts.
  • Listen to everyone and listen to no-one.
  • Trade no more than 1 hour a day.  Research no less than one hour a day.
  • Dampen the natural volatility in my mood fluctuations (less elation, less depression. – almost the definition of hedging)

 

Day 0:  I picked some stocks out of a hat (well, almost:   Two of them were tips from Motley Fool,  two were "pet" companies I believe in, which have been growing for years,  and the rest were tech stocks involved in areas that I believe will have a growing demand in the coming year.

Day 1:  A good day, I was .05% up in both accounts!  Multiply by 250 days in the fiscal year, (I’m not compounding) that’s 12.5 %!  Cool!

Lesson learned:  None.

 

Day2:   A bad day, I did the last of my weekly spread bets (which had a big spread), so I’m now a few hundred pounds down.   The Dow is down, everything is down.

Lessons I need to learn:

1. Patience.  Re-Read what I wrote down when I opened the position – the time frame for exit was months, not days or hours.

2. Don’t watch the weather, study the climate (I live in the UK, where weather-watching is a National trait).

3.  Don’t buy at the market.

Hi @jandj

Thank you for sharing this information and your insights are beneficial to help others as well.

All the best - MongiIG

Link to comment

Day 3:   Down a lot on my spread betting account.    Position account doing OK.

I spent too much time looking at charts, revisiting the IG Academy course on candlestick patterns.  

I’m almost looking forward to hitting the stop on the two spread trades which have done really badly, so I can do a post-mortem.

The two trades I'm seriously down on are a UK and a US stock (price rise)

If I do hit the stop on the UK stock, I think it’s because I didn’t really have a good handle on the volatility.    This is a chart of the stock over the last week, with my stop line shown.

As you can see, I bought at the peak! 

There was a big buy on the left of the chart, followed by a similarly-sized sell a couple of days ago.   Somebody got their timing right!
Did they just look at the moving average crossovers?  It certainly looks like it.   Maybe the buy trade itself helped lift this (quite small) stock’s price.

I don’t know much about this company, it’s a medium-cap UK company in a sector I’m guessing will do well over the next year.
image.thumb.png.699f5981fc6e11fe786db359c9bb6ea2.png

The other spread bet I’m doing badly on is a US stock.   It’s pretty volatile but has been growing reasonably smoothly and steadily since inception in 2016.  It’s also in a sector I’m guessing will do well.
While watching it tank almost 3% today, I belatedly Googled it, and found an article from the beginning of August in Investor Observer saying it was overpriced, and definitely not a buy.   But its price has been rising steadily throughout August, so that can’t be the reason for its sudden drop today.

No lessons learned today, but if either of these trades gets closed by their stop,  I’ll be sure to try and find out what I could have done (if anything) to avoid the loss.
 

Link to comment

A couple of things I could add: 

If you are learning don't go with 18 units per point like you showed us on that picture. Try the minium size bet and grasp your knowledge as you go. To prove that you can trade well you don't need a big size. 

Day trading is the best way to blow your account. If you are not ready to hold your position overnight think again why you entered on that trade in the first place. There are very few traders that can make day trading , and all of them made it after losing way too many times.

 

  • Like 2
Link to comment

Day 4:

Manually closed out the spread bet on the UK stock after stop reached.   The sell was not immediately automatically executed at the price by IG, presumably due to slippage.
In my demo account, I’d won the “same” bet, with the exactly the same conditions --- except the market value, and of course, the time that the bet was made.  It might seem obvious, I know, but to replicate my order correctly I should have at least set the price – otherwise it’s a different bet.  And I should have checked the charts more carefully too to see if the conditions had changed.

Maybe I’m a masochist, but I’m keeping the stock on my watchlist to see if I could have won with a more carefully considered bet.

Since opening the position, I found out that the stock seems to be popular with momentum traders, which I guess is what I was doing.   My reasons for the placing the bet were very simplistic:  It’s a medium cap company that is in a growing tech sector, and its stock value has been “steadily” rising.
I basically bet that it would continue to go up until it reaches a value of X, not in itself  a stupid bet to make.  Whether or not that bet proves right, my execution was very flawed, both in timing, and in setting the stop level.


Lessons learned:
•    Take into account the stock’s volatility carefully before setting stops/limits.
•    Time the order correctly and set a bid price.
•    Research the stock before placing any trade.   
•    Understand slippage – I got caught out by price gaps in this rather illiquid stock.
 
I’m a little confused (not to say nervous) about the US stock, which has clawed back most of yesterdays’ losses today:

I’m still holding on to the position, but might go against my rule, and sell out before the limit/stop – pleading naiveté as an excuse:
 
At the beginning of August, one of the company’s VP’s sold 2/3 of their shares.
Then on the 24th, the CFO and a VP sold 2/3 of their shares ($3,000,000 worth of shares shed in total).  
But the stock’s price rose considerably after this big sale, noticeable on the chart.  
Why?  

image.thumb.png.6aaca50628505fe78b6986a1604f3ffd.png

A third bet was on another US company, which, to look at its chart, is nothing special, but, like the others, is a tech company in a sector I have hopes for:

It provided me with the only good feelings I’ve had about my portfolio in the as couple of days, as my phone pinged me throughout yesterday and today that my trailing stop had been adjusted.
 

Link to comment

 

32 minutes ago, jandj said:

At the beginning of August, one of the company’s VP’s sold 2/3 of their shares.
Then on the 24th, the CFO and a VP sold 2/3 of their shares ($3,000,000 worth of shares shed in total).  
But the stock’s price rose considerably after this big sale, noticeable on the chart.  
Why?


The short term stock price of a company doesnt not reflect the company's performance.
The best companies in the world can exceed all estimates, targets and expectations and the stock will still tank. The stock price reflects trader's sentiment. If enough people sell the stock it will go down regardless of how well the company is performing.

Using your example above, some traders might see that stock as a bargain. A high performance company who's stock price suddenly dropped. Long term, the traders will know if the company keeps its current path of high performance, the stock will eventually bounce back. the old quote goes: "If the business does well, the stock eventually follows."

Another quote that has also served me well (despite me trying to prove it wrong multiple times...):
"insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."

After much back testing, you may find you will be far more successful buying when insiders buy compared to selling when insiders sell.

 

Best of luck 

Edited by Spook1304
Spelling
  • Like 1
Link to comment
17 minutes ago, Spook1304 said:

 

 


"insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."

 

 

Best of luck 

Ok,  Reuters news just appeared a few minutes ago,  the company are buying another (big company), so no wonder those guys sold :)

 

I closed the position (losing a few pounds) manually.   

 

Lesson learned:

 

Check for insider trading and steer clear of any where there are big sells  (I only do long positions)

Link to comment
9 hours ago, jandj said:

Check for insider trading and steer clear of any where there are big sells

If you manage to check for insider trading you will be ahead of 90% of traders in the world. If that was possible at all :D, of course 

 

  • Like 1
Link to comment

Day 5:

 

Well, it’s been a week, I’m feeling a little more in control over things. 

 

My long portfolio is up, due to a combination of luck and (I like to think) some wise stock tips from Motely Fool and my own stock-picking instinct.

 

I messed up the Spread Betting account a little, but after selling out a couple of stocks at a big loss and small profit respectively, I’ve learned enough to give me confidence to place more spread bets on those same stocks, with a smarter execution.  And the spread account is now up decently too.   

 

Contrary to my initial rules,  I’ve tweaked one of the stops on one of the trades, changing it from trailing to a fixed loss of 20% of the stake, as I can see that the volatility is too high for me to be confident that it wont get suddenly closed.

 

 

I’ve been doing a lot of background reading about the rise in amateur trading.  This article from the FT was interesting : https://www.ft.com/content/7a91e3ea-b9ec-4611-9a03-a8dd3b8bddb5

 

My good friend Pete has been really sick with COVID the  past two weeks.  We normally speak on the phone every couple of days, but he was way too ill to do much more than post a couple of anxious-sounding texts the whole time.   A gambler by nature, at one point he gave himself 5 to 1 odds on surviving.  Fortunately he won that bet.   I finally got to speak to him yesterday, where (between coughing fits) he gave me the run-down on cryptocurrencies, which he’s very heavily invested in.   I’ve been thinking of buying some Ether (but only spending money I don’t mind losing completely).  I read a Goldman Sachs report from a few years back that suggested it was more future-proof than other Cryptos – and what with the current mad rush to buy non-fungible tokens, it seems like a reasonable cryptocurrency to invest in.

 

I have 50% of my funds still available to trade.  I’ll place a few more trades next week,  which will give me an opportunity to make a whole bunch  of new mistakes.  

 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      23,592
    • Total Posts
      96,928
    • Total Members
      44,156
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    DevonDazzlr
    Joined 01/12/23 06:04
  • Posts

    • The Procter & Gamble Co., Elliott Wave Technical Analysis The Procter & Gamble Co., (PG:NYSE): 4h Chart 1 December 23 PG Stock Market Analysis: We are looking at the possibility of a bullish scenario, which is very similar to what is happening with the DJI. Looking for a potential correction in wave (2) to be in place to now resume higher.   PG Elliott Wave Count: Wave {i} of 1.   PG Technical Indicators: Above all averages.   PG Trading Strategy: Looking for longs into wave {iii} with 153$ as tested support.   TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here!         The Procter & Gamble Co., PG: 1-hour Chart 1 December 23 The Procter & Gamble Co., Elliott Wave Technical Analysis PG Stock Market Analysis: Looking for a potential diagonal in wave {i} and a three wave move in wave {ii}. We are now looking for a potential wave (iii) of {iii} to be in place which should start an acceleration higher.   PG Elliott Wave count:  Wave (iii) of {iii}. PG Technical Indicators: Above all averages. PG Trading Strategy: Looking for longs into wave {iii} with 153$ as tested support.    
    • The group decided to reduce production by an additional one million barrels per day. Source: Bloomberg   Commodities OPEC Price of oil Petroleum industry Saudi Arabia Brent Crude  Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 30 November 2023 18:09 Key Takeaways: OPEC+ announced a strategic decision to cut oil production, influenced by Saudi Arabia's desire to maintain high oil prices. The production cut will reduce output by an additional one million barrels per day, which is expected to have significant implications for the global oil market. OPEC+ plays a crucial role in the oil industry and their decisions can greatly impact oil prices worldwide, affecting gas prices and the stock market. The decision to cut production reflects the ongoing power dynamics within the global oil market, with Saudi Arabia showcasing its influence within OPEC+ by successfully lobbying for the production cut. The move by OPEC+ underscores the importance of oil prices in supporting national economies, as Saudi Arabia seeks higher prices to bolster its own economy. In a strategic move, the OPEC+ oil cartel, comprising members of the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers like Russia, announced on Thursday that they would be cutting oil production. This decision was heavily influenced by Saudi Arabia, as the country was keen on maintaining high oil prices. The group decided to reduce production by an additional one million barrels per day. This decision is expected to have significant implications for the global oil market. OPEC and its allies, known collectively as OPEC+, have been key players in the oil industry for many years. Their decisions can significantly impact oil prices worldwide, affecting everything from gas prices to the stock market. This recent decision to cut production is a strategic move aimed at keeping oil prices up. The decision by OPEC+ also reflects the ongoing power dynamics within the global oil market. Saudi Arabia, one of the world's largest oil producers, has been pushing for higher oil prices to support its economy. By successfully lobbying for a production cut, it demonstrates the influence it wields within OPEC+. Brent crude oil – technical trading view Source: IG The share price of brent crude has formed an inverse head and shoulders reversal pattern (shaded grey). The reversal pattern suggests that the near-term downtrend is now reversing into a short-term uptrend. A close above 82.60, the neckline, would confirm the pattern. In this scenario, 87.20 becomes the initial upside resistance target from the move, while a close below the 80.60 level might be used as a stop loss indication.     This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
    • The US dollar extends its recovery as yields push higher; Powell’s speech on Friday will take center stage. What are key levels to watch on EUR/USD and GBP/USD?   Source: Bloomberg   Forex Shares GBP/USD Euro EUR/USD Federal Reserve  Diego Colman | Market Analyst, New York | Publication date: Friday 01 December 2023 04:57 The US dollar, as measured by the DXY index, extended its recovery on Thursday, boosted by a bounce in US treasury yields following remarks from San Francisco Federal Reserve president, Mary Daly indicating that the FOMC is not yet considering slashing borrowing costs. Daly's forceful position, which clashes with the more cautious posture embraced by other colleagues, highlights a widening chasm between the doves and the hawks. Upcoming market events   Source: DailyFX To address uncertainties regarding the broader central bank’s stance, traders should closely monitor Fed chair Jerome Powell’s speech at Spelman College on Friday. This event might serve as a platform for the FOMC chief to provide clarification on the monetary policy outlook. Hawkish comments endorsing higher interest rates for longer are likely to exert upward pressure on US yields, creating the right conditions for the dollar to prolong its nascent rebound. On the flip side, a lack of pushback on dovish market pricing ( many rate cuts for 2024 already discounted) could drag yields, weighing on the greenback. EUR/USD technical analysis The EUR/USD fell for a second consecutive day on Thursday, with losses accelerating after the release of weaker-than-expected Eurozone inflation data for November. If the pullback gathers steam in the coming trading sessions, the lower boundary of a short-term ascending channel at 1.0890 may act as support, but the prospect of a drop towards 1.0840 cannot be ruled out if a breakdown unfolds. Conversely, if bulls regain control of the market and the exchange rate resumes its recent advance, the first ceiling to watch is positioned at 1.0960, which corresponds to the 61.8% Fib retracement of the July/October slump. On further strength, a revisit to November’s peak is probable, followed by a potential rally towards horizontal resistance at 1.1080. EUR/USD technical chart   Source: TradingView GBP/USD technical analysis GBP/USD also retreated on Thursday, but managed to remain above technical support in the 1.2590 region. This moderate pullback is unlikely to signal a shift towards a negative outlook; rather, it may represent a brief pause in the near-term uptrend. Upholding cable’s bullish outlook requires the pair to stay above 1.2590. If this floor holds, GBP/USD may soon resume its upward trek following a brief consolidation period, paving the way for a move towards 1.2720, the 61.8% Fib retracement of the July/October slide. Continued strength might direct attention to the 1.2800 handle. On the flip side, if losses intensify and sellers manage to drive prices below 1.2590, we might observe a drop toward both the 100-day simple moving average and 1.2460 in the case of sustained weakness. GBP/USD technical chart   Source: TradingView       This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
×
×
  • Create New...
us