Complete newbie - will look back at this question in embarrassment I'm sure.

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Cowlinn

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Hello,

I am a complete newbie to trading. I'm under no illusion otherwise.

I've been day trading the FTSE100 on my IG index demo account for the last week or so. I'm currently about £25,000 Demo money up.

There must be something I am missing, that I'd like clarified. I've been trading huge amounts per point. Approx £500 - with the fluctuation of the FTSE100 these almost immediately change huge amounts, seeing -£4,000 is not uncommon. However, never have I had a trade that hasn't fluctuated up a little, with me closing the spread usually around £900 in profit (only a point or two up)

My question is this, I have very rarely seen the spread go below say, -£6,000 (once or twice) and have closed every single trade at a profit (of a few hundred pounds).

With a balance of £50k or so, would the above not be a feasible strategy? One could even set a stop at -£15k or so to prevent anything seriously bad happening (though I haven't seen that in the last 2 weeks (200 trades or so))

I welcome you all to tell me how wrong I am.

Cheers,
Matt
 
Cowlinn said:
Hello,

I am a complete newbie to trading. I'm under no illusion otherwise.

I've been day trading the FTSE100 on my IG index demo account for the last week or so. I'm currently about £25,000 Demo money up.

There must be something I am missing, that I'd like clarified. I've been trading huge amounts per point. Approx £500 - with the fluctuation of the FTSE100 these almost immediately change huge amounts, seeing -£4,000 is not uncommon. However, never have I had a trade that hasn't fluctuated up a little, with me closing the spread usually around £900 in profit (only a point or two up)

My question is this, I have very rarely seen the spread go below say, -£6,000 (once or twice) and have closed every single trade at a profit (of a few hundred pounds).

With a balance of £50k or so, would the above not be a feasible strategy? One could even set a stop at -£15k or so to prevent anything seriously bad happening (though I haven't seen that in the last 2 weeks (200 trades or so))

I welcome you all to tell me how wrong I am.

Cheers,
Matt
Click to expand...
I promise you by the time you have traded more than 'a week or so' you will have seen quite a few of your trades showing more than a -£6,000 loss at £500/pt. Trading 10% of your capital on a single instrument is not going to provide yo with a long-term trading venture. I'm also going to suggest if that £50K were your own money rather than demo, real capital, you'd not be trading anything like you currently are. A £15K loss on a £50K account is something seriously gone wrong. 200 trades in a week at £500/pt? What are your numbers over this period?
 
Izzy Fuente said:
I promise you by the time you have traded more than 'a week or so' you will have seen quite a few of your trades showing more than a -£6,000 loss at £500/pt. Trading 10% of your capital on a single instrument is not going to provide yo with a long-term trading venture. I'm also going to suggest if that £50K were your own money rather than demo, real capital, you'd not be trading anything like you currently are. A £15K loss on a £50K account is something seriously gone wrong. 200 trades in a week at £500/pt? What are your numbers over this period?
Click to expand...

Hi Izzy, thanks for the reply. That does make perfect sense to me - I want to stress again that I know how naive I sound.

Is it common for the FTSE to drop 10 points or so without any fluctuation up? (or visa-versa)

Excuse my ignorance, but I'm not sure what you mean by my numbers.

I'll keep with the Demo account for a lot longer yet :)

M
 
Cowlinn said:
Hi Izzy, thanks for the reply. That does make perfect sense to me - I want to stress again that I know how naive I sound.

Is it common for the FTSE to drop 10 points or so without any fluctuation up? (or visa-versa)

Excuse my ignorance, but I'm not sure what you mean by my numbers.

I'll keep with the Demo account for a lot longer yet :)

M
Click to expand...
Knowing you're naive is good, don't worry about it. It's those who are, but don't think they are that get hit hard. Nothing is common. Would be great if it were. I'm not recommending a demo that's up to you. Personally, I'd find someone who will allow you trade REALLY small stakes, but trade your own capital. Makes a lot of difference. Your numbers such as trades taken, number of winners, average win, average loss, maximum win, maximum loss, maximum drawdown.
 
Don't worry about asking questions you might be embarrassed about in the future. All beginnings are difficult and steeped in lack of knowledge and experience.
Years ago someone posted a message on t2w asking how they could post a message..........ha ha

You've got very good advice so far.
 
Mr. Charts said:
Don't worry about asking questions you might be embarrassed about in the future. All beginnings are difficult and steeped in lack of knowledge and experience.
Click to expand...
With my official T2W hat on - I can confirm this is house policy! Generally speaking, most members are civil and helpful to newbies - as Izzy (above) has shown. After all, we were all in your shoes once. The ones that get spoken to harshly tend to be those who lack humility and want answers handed to them on a plate without any effort or input from them. Clearly, you're not in this category. So, welcome to T2W Matt - and ask anything you want.
Tim.

PS. If you've not yet read them, check out our FAQs and Stickies. Of the latter, this one best addresses the points you raise in your opening post: Essentials Of 'Risk & Money Management' Enjoy!
 
timsk said:
With my official T2W hat on - I can confirm this is house policy! Generally speaking, most members are civil and helpful to newbies - as Izzy (above) has shown. After all, we were all in your shoes once. The ones that get spoken to harshly tend to be those who lack humility and want answers handed to them on a plate without any effort or input from them. Clearly, you're not in this category. So, welcome to T2W Matt - and ask anything you want.
Tim.

PS. If you've not yet read them, check out our FAQs and Stickies. Of the latter, this one best addresses the points you raise in your opening post: Essentials Of 'Risk & Money Management' Enjoy!
Click to expand...

Thanks everyone for the generous help. I'll read through these forums and learn as much as I can. Who knows, maybe one day I'll be able to help someone else.
 
Anyone who doesn't understand the difference between a demo account and real money needs to consider the concept of 'house money'. When you win $100 on roulette/blackjack/whatever, that's 'house money'. The strange thing about 'house money' is that it isn't the same as money in your wallet - it's 'free' money. That you could walk away with that money and spend it on real stuff is secondary. It was never yours so the same rules that apply to your own 'real' money do not apply. You can treat it with contempt and blow it away for fun. Fact is, real money 'feels' a lot different to demo money because it isn't house money. You've paid tax on it and it could buy you other things. Demo money can't. There is NO substitute for testing your trading ideas with real money. Just keep the stakes as small as possible,
 
Izzy Fuente said:
Anyone who doesn't understand the difference between a demo account and real money needs to consider the concept of 'house money'. When you win $100 on roulette/blackjack/whatever, that's 'house money'. The strange thing about 'house money' is that it isn't the same as money in your wallet - it's 'free' money. That you could walk away with that money and spend it on real stuff is secondary. It was never yours so the same rules that apply to your own 'real' money do not apply. You can treat it with contempt and blow it away for fun. Fact is, real money 'feels' a lot different to demo money because it isn't house money. You've paid tax on it and it could buy you other things. Demo money can't. There is NO substitute for testing your trading ideas with real money. Just keep the stakes as small as possible,
Click to expand...

Just deposited £200, instantly writing it off in my head as buying some real world experience.

Oh my god, real money is a whole different kettle of fish.

I don't think I'm cut out for this.
 
Izzy Fuente said:
No! Do not write if off!!! Treat that money with the respect it deserves. That's the whole point. Risk only the smallest fraction of it possible on any one trade.
Click to expand...

I'm on IG Index on the FTSE100 and the minimum bet is £2/point - so that's what I'm doing.

Account balance currently at £169
 
Cowlinn said:
I'm on IG Index on the FTSE100 and the minimum bet is £2/point - so that's what I'm doing.

Account balance currently at £169
Click to expand...

Hi Cowlinn,
Today of all days is not the day to risk £2.00 p/p of a £200 account. The volatility will kill you (due to the domino effect from China). Worse still, you'll end the day by doubling your money and, far from thinking you're not cut out for it, you'll think you're God's gift to trading. Yep, you read that right; that would be worse than losing your money, IMO.

With an account of £200, you need a provider that allows you to trade at £0.10p p/p. Trading at £2.00 p/p with IG, you need an account with an absolute bare minimum of £2,000 in it - and that assumes you know what you're doing, with a robust methodology that's tried 'n tested. As Izzy rightly says, respect your £200 - and do everything possible not to lose it.
Tim.
 
timsk said:
Hi Cowlinn,
Today of all days is not the day to risk £2.00 p/p of a £200 account. The volatility will kill you (due to the domino effect from China). Worse still, you'll end the day by doubling your money and, far from thinking you're not cut out for it, you'll think you're God's gift to trading. Yep, you read that right; that would be worse than losing your money, IMO.

With an account of £200, you need a provider that allows you to trade at £0.10p p/p. Trading at £2.00 p/p with IG, you need an account with an absolute bare minimum of £2,000 in it - and that assumes you know what you're doing, with a robust methodology that's tried 'n tested. As Izzy rightly says, respect your £200 - and do everything possible not to lose it.
Tim.
Click to expand...

Tim,

Thanks so much for your advice. My account is now at £214.00 (By complete luck)

I'm going to stop there until I've figured things out. Can you recommend any brokers that allow £0.10 per point?

Many thanks
 
Cowlinn said:
. . . Can you recommend any brokers that allow £0.10 per point?
Click to expand...
Hi Cowlinn,
Recommend? No, I can't I'm afraid, as I don't use any that offer it. This firm advertised with us recently and appear to offer it, along with a minimum account size of £200 (how handy is that!), but I know nothing about them - or you come to that: ADS Securities Depending on what market you trade and what sort of an account you want - they may or may not be suitable. It's a case of researching who's available and their minimum trade size - there will be others.
Tim.
 
timsk said:
Hi Cowlinn,
Recommend? No, I can't I'm afraid, as I don't use any that offer it. This firm advertised with us recently and appear to offer it, along with a minimum account size of £200 (how handy is that!), but I know nothing about them - or you come to that: ADS Securities Depending on what market you trade and what sort of an account you want - they may or may not be suitable. It's a case of researching who's available and their minimum trade size - there will be others.
Tim.
Click to expand...

Thanks Tim, I'll take a look.

FWIW and to anyone who's even remotely interested - Here's how my day went. I cashed out with £14.60 profit, It was a roller-coaster of emotions
 

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Cowlinn said:
FWIW and to anyone who's even remotely interested - Here's how my day went. I cashed out with £14.60 profit, It was a roller-coaster of emotions
Click to expand...
Hi Cowlinn,
Don't let this go to your head but, for what it's worth, I think you've done very well. You've mostly been short, which means that you're clued in to the fact that the market's got the 'ump today. Okay, that's not difficult on the one hand but, on the other, there have been some sharp pullbacks and you could have spent all day trying to catch tops or bottoms. Trying to 'catch a falling knife' as it's called is a recipe for disaster on a day like today - unless you're very, very skilled. The other thing that impresses me is that you've kept very tight stops. That's not at all easy with this amount of volatility. I've traded the Dax today and I've struggled to get stops as tight as yours.

So, well done, but do get yourself an account that enables you to trade £0.10p a point, as this is just one day and counts for nothing in the great scheme of things. You will have shocking days, especially until you find your feet which, with a £200 account and a min' trade size of £2.00 means just one thing: game over.
Tim.
 
timsk said:
Hi Cowlinn,
Don't let this go to your head but, for what it's worth, I think you've done very well. You've mostly been short, which means that you're clued in to the fact that the market's got the 'ump today. Okay, that's not difficult on the one hand but, on the other, there have been some sharp pullbacks and you could have spent all day trying to catch tops or bottoms. Trying to 'catch a falling knife' as it's called is a recipe for disaster on a day like today - unless you're very, very skilled. The other thing that impresses me is that you've kept very tight stops. That's not at all easy with this amount of volatility. I've traded the Dax today and I've struggled to get stops as tight as yours.

So, well done, but do get yourself an account that enables you to trade £0.10p a point, as this is just one day and counts for nothing in the great scheme of things. You will have shocking days, especially until you find your feet which, with a £200 account and a min' trade size of £2.00 means just one thing: game over.
Tim.
Click to expand...

Hi Tim,

Thanks very much for the kind words. That means a lot to me coming from someone like you - don't worry, I'm still completely aware of my skill level (or lack of!)

I'm very interested in the financial markets and will continue to research, watch and learn. It's not about the money for me yet, I enjoy doing it at the moment.

Like you say, I think I should look for a broker that will allow me to trade smaller amounts until I increase my account size.

Thanks again for everything, I hope to be an active member here moving forward.

Best,
Matt
 
Cowlinn said:
Thanks very much for the kind words. That means a lot to me coming from someone like you . . .
Click to expand...
Hi Matt,
Cheers for the compliment although, as I write, there are members reading this who will, quite literally, have fallen off their seats laughing! Seriously, there are those who will tell you that I'm the last person you should listen to. Sure, I've been around the blocks a few times and I'm on the staff, but don't assume that means that I know what I'm talking about. Take what I say with the same bucket load of salt that you'd apply (hopefully) to any other stranger on the net who offers you their opinion.
;)
Tim.
 
£80 said:
Hi Cowlinn

Just a random question. Why trade the ftse?
Click to expand...

Hi there,

No reason, I did a lot of demo on it. I like the fact that it moves around very quickly.

Is it not a good one to start with?

Matt
 
I was just curious. Ftse is fine, it will be even better when you understand the rhythm of it and when to trade it and when not to trade it.

Do you have a strategy/method/system that you are currently trading?
Do you understand money management?
Do you have a trading Diary?
 
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