FTSEBOY out of the game.....temporarily I hope!!!

[FTSEBOY]

Hi all,
Just thought I'd put out this post (not that anyone is probably bothered one way or the other) that I have decided to take some time out from day trading until I've done a bit more homework. Maybe someone outthere can learn something at my expense too.

Basically I initially started out with enough money to trade 2 lots of FTSE futures and about £1500-00 as a buffer. I jumped in from day one trading 2 lots and got my **** whipped a couple of times. In hindsight I wish that I had started with just 1 lots and built up my existing capital and locked in profitable trades rather than trying to let them run.

Lessons learnt:-

1) Start small to get confidence up. I found that after my biggest loss it was nearly a week later before I pressed the button again!!

2) Inexperience traders should try and stear clear of trading ranges and wait for more volatility.

3) Go on a suitable TA course. I was going to attend the Basic TA course held back in June but couldn't make it-oh how I wish that I had been able to.

4) Read a comprehensive book on TA and Candlestick charting. If anyone knows of any good ones I am going on holiday soon so it would make nice reading. Don't rely too much on the internet for information as they merely touch the surface.

Conclusion:-

Whilst I put in endless hours playing around with my e-Signal charting software (which I found invaluable) with different indicators, I still didn't get the overall results on the day. Its a real shame as it was probably one of my first jobs where I couldn't wait to wake up in the morning. In hindsight I wish that I'd had a dual monitor set up instead of a 15" laptop, that way I wouldn't have to keep flipping between 1,3 and 5 minute charts, which incidentally all had the same time settings. I did pose this question to T2W board about the different MA's etc for different time frames but didn't get a reply so rather than erode any further capital I closed down my IB account and e-Signal package.

Well better luck next time and hopefully the phoenix may rise from the flames at a later date. May I take this opportunity to wish everyone luck in their trading and all the contributions that people have made to past threads that I have posted.

Cheers
FTSEBOY

 

[bottomdollar]

FTSEBOY,
Sorry to hear that you are out.. I've been battered to the ground twice now.. it is looking likely that I may get battered for the third time.. but I've noticed that each time I get better and my account lasts longer.. this third time, though I'm not winning as consistently as much as I would like.. I lose a lot less per deal when it goes wrong and make a lot more when it goes right.. don't give up hope!!
You just have to pick yourself up again, brush yourself down and keep going.. don't let it deter you. I've found the best way to learn is to commit money.. its completely different if you just paper trade.. that's what I've found!
Good luck!! :cheesy:

 

[2468steve]

FTSEBOY,
preserving capital is one of the most important aspects of trading.
Unfortunately taking losses is also all part of the job.
However showing commitment and the deditication to learn,to get up and try again,is a great attribute.You appear to have this in abundance,and which thru hard work, will ultimately bring success.
Good Luck

Steve

 

[ianp]

Hi Ftseboy,
sorry to hear about your torrid time,,



If you love trading take some time off.

Then try trading an easy market instead of the ftse..

ian

 

[Grey1]

once a trader always a trader ...

why should trading be easier than any other business?

I am sure u be back ...

 

[bally35]

..2 year's back... I lost £2,800 within half hour...i felt really down....but it's all part of the learning's ...

When Thomas edison invented the light bulb..
he tried 2000 experiment's before he got it to work..
a young reporter asked him...
how does it feel ,to fail so many time's....
Thomas said.....I never failed once....
i invented , the light bulb...
it just happened to be a 2000 step process......

 

[sean77]

FTSEBoy, if you get back in, Martin Pring's Technician's Guide to Day and Swing Trading is good as a detailed introduction to the whole TA field.

Piper's The Way to Trade is the best overall approach to trading I've seen. A lot of good traders swear by it, and his price/bar based set-ups are invaluable.

Good to start with price, then move on to indicators if you need them, acknowledging that they are a visual aid/mental crutch.

The cliche about money management being the most important is true. It's a cert that if you'd read Piper, you would have started with 1 contract until you were consistently profitable, and you'd probably still be in the game.

I'm trading 1 contract, and spinning my wheels, but I think my refusal to trade more than 1, with a refusal to take big losses will keep me in long enough to learn, which is Piper's main lesson.

A lot of traders say the most important attribute for success is persistance. Why don't you try what ianp suggests, and trade something a bit slower? As we all know, FTSE on liffe can be an absolute pig sometimes. With a small account/stop, it's a market where you can know what's going on, trade the right way and still get battered.

Not looked into it, but I've heard it said a few times that the US bond market has good smooth swings. Supposed to be less profitable, but easier.

Good luck, hope you make it.

Sean.

 

[Trader333]

FtseBoy,

The best book I know of on Candlestick charting is by Steve Nison and is called:

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East

This can be found at:

http://www.amazon.co.uk

It is £55 but is by far the best I have come across.

The single biggest lesson I have learned in trading is that if the market does not almost immediately confirm my anticipated entry direction then I get out and it really is that simple.

It is possible that I could go 10 consecutive trades and lose maybe 5 or 6 points per trade so totalling 60 points in loss but then I only need 1 good trade of 100 points and I am in profit. My success rate is much better than that but it is always a possibility. I read somewhere that RogerM had 14 consecutive losing trades so you are not on your own.

Good Luck


Paul

 

[Marc100]

Just think how lucky you are.

Now you can read all the books you should have read first time round.

Now is the perfect time to introduce yourself to Steve Nison, John J Murphey and Jack D Schwager:

Steve Nison: Japanese Candlestick Charting Techniques.
John J Murphey: Technical Analysis Of The Financial Markets.
Jack D Schwager: Market Wizards/New Market Wizards.

How much money do you think these three chaps would charge you for several one on one sessions?
I would guess it would be alot more money than you have recently lost.

The above outlines part of my mental approach to trading. When I take a good loss I equate that to more time for learning. If I lose 10k then I need to acquire sufficient knowledge as would be, at least, commensurate to my monetary loss.

Don't know if you my way of dealing with losses fits your mental make up but it works for me.

Good luck with your future endeavours.

Marcus.

 

[martinwalker]

i agree with ianp, i had coaching from MrCharts also, after personal recommendation from some body, and it made all the difference, i only had a bit of experience but he taught me everything, his own methods,techniques,analysis, taught me what worked in the real world of trading, how and why, the works, and it works!!!
forgive me if i seem to be over the top, but getting his coaching has made my life free and profitable, he says on another t2w board about achieving the dream........ been there done that ;-0
i'll shut up now b4 i embarass him
m

 

[Skimbleshanks]

Ftseboy - sorry to hear about your situation, but you should take heart because you are well on the way to becoming a trader! Now you know what it's like to wipe an account you will be far more prepared next time you dip your toe in the water, which of course you will. I wiped very small accounts three times before the penny dropped, and mentally I just equate those lost funds to all being part of my trading education.

Sounds to me as if you need to read up more on money management - don't risk more than 2% of your portfolio on each trade. And only trade 1 contract until you have increased your fun by 100%; then trade 2 contracts and wait until you have increased it by 50% before trading 3 contracts, then increase that by 25% before trading 4, etc.

A very true adage is that new traders think of how much money they can make, yet old traders think of how much money they can lose.

Chin up! The road to trading success is long and windey, with lots of big potholes. Just because you've fallen into one doesn't mean that you can't continue further down the road when you're ready.

 

[Finlayson]

Hi Ftseboy,

sorry to hear this, but if u get through it & come back then I am sure u will have learnt many valuable lesson's & be a step closer.......& u dont tend to forget these type of lessons.

dont know how much my advice is worth to u, but if it helps any then it is worth passing on.

u r right.......start small, this can be hard in itself, especially if u have a 'Greek chorus' watching u, to see 'how u do' , but it is the points that count initially,........consistency is the key & we all learn at our own pace.

learn what u can but keep it simple, I remember reading an interview with ''bruce lee'' & the interviewer gave him a stick & asked ''what would u do with this to attack me ''..........expecting something 'Flashy' .......he whacked him over the head with it !!!

my point....find a strategy that works, its results that count. trading is often overcomplicated

find yourself a 'mentor' if u can, I have thankfully, the best ones dont tend to come knocking offering to show u how.

if u had the courage to start then u will have enough to try again, but I am sure u know this

best of luck

 

[rglenn]

FTSEBOY

You are not out of the game until you breathe your last breath!

Money management is the key to success in this game.

I learnt alot about it from t2w.

My goal when I first started was to make as much money as I could. In reality though it was how quickly could my money disappear!!

Once you get the money management bit correct then everything else will fall into place. i.e you are keeping hold of your money so you are able to try out various systems and methods and even make up some of your own.

Never get too greedy and cut your losses quickly as mentioned by trader333.

There are plenty of good advice and systems on t2w but many people like their own.

 

[fastnet]

Hi FTSEBOY -

As Skimbleshanks mentioned it is quite refreshing to hear such an honest account of, what is, a familiar experience for most of us. There's stack loads of good general advice and encouragement already attached to your original post - I wont embarrass myself by trying to add to it.

My question was more specific. What strategy did you have in place to make sure you won more than you lost? Was is backtested - was it practical? Where and why did reality diverge from the plan? Only by asking these questions of myself did I begin to improve. . . and I've still got a lot to do believe me.

If you can't see that a system or technique would work in the past how can you expect it to work in the future? You don't have to be too strict or fancy - just print of a decent amount of back data, cover with another sheet and slowly unveil what happened. As you move across you should be making decisions using the principles in your plan. If you can't make net positive on backtested data then you certainly will not in practice.

I warn you this exercise is very dull and makes you no money at all. However you should be concentrating on points won i/o cash.

Would you mind explaining the techniques you used and why you felt they didn't work in real time?

Cheers

 

[rjay]

The single biggest lesson I have learned in trading is that if the market does not almost immediately confirm my anticipated entry direction then I get out and it really is that simple.

Hi Paul,

Yes that's my theory too - which I stick to out of fear if nothing else - but I'm not convinced it's the best way.

Currently SB'ing Daily Dow and last night when I was convinced there was going to be some kind of rally after 8pm, I waited for all my indicators to agree and placed a trade. Sat there for 20-30 mins watching it do sod all then closed it (for a 2 quid loss) and then immediately watched it go up 20 pts.

What is your definition of "almost immediately" - would you have closed in that situation ?

Richard

 

[rglenn]

rjay

I am not trying to answer for Paul(trader333) as I think he can do that quite well for himself.

But you have to realise that when you decide on a set up you have to stick to it no matter what happens in the market afterwards.

The best thing to have done in your case - if you are following a system or method is to close out and walk away and start again when the system indicate.

It's no good sitting there saying to yourself if only.......

That is certainly not the way to trade profitably- otherwise when your method/system tells you to do something in the future you will try to go against it to your cost.

Remember that trading is about getting an edge overall- and you do need lots of patience.

 

[Trader333]

Rjay,

I dont use SB companies so I dont have the issue of being in a losing situation immediately that I place the trade and by this I mean that I am not down by the value of the spread.

In the example above I would have been out long before you were and the fact the market subsequently moved in my anticipated direction is of no importance to me. Let me ask you how you would have felt if the market had gone the opposite way by 20 points ? You would be patting yourself on the back for getting out and saving the loss.

I accept that with a SB company things are much harder. When I place a trade I only need to make a 1 point in my direction and I am at breakeven so I dont have a problem entering and exiting trades which is just not as easy for those using SB companies.

Cheers


Paul

 

[Mr. Charts]

Does SB stand for Stealing Bookies? ;-)

 

[rjay]

To clarify, my post was regarding what was a reasonable period of time in which to expect your prediction to come true - not whether one should be annoyed about what happens once they close the deal (for markets go up and markets go down, so you can always say "if only ...)

 

[FTSEBOY]

What trading style epmloyed

First of all let me thank you all for the support and advice. My trading strategy was to trade on convergence/divergence signals, and overbought/oversold signals generated by Williams %R, CCI and RSI. I think that my downfall was the fact that I was trying to create 3D trading using 1,3 and 5 minute indicators but not adjusting each time frame indicator accordingly because I didn't know what ones to use. I remember seeing the other day a chart posted by FTSEBEATER which employed 3 MA's, but I didn't know what length of time he had on them. Other indicators I also used (not too exhaustive) were Bollinger Bands, Donchian Channels, Candlesticks with MA colours on top. The problem with my strategy was I was too impatient as I was looking at a 5 minute chart to get 'the bigger picture' and then flipping to the 1 minute chart to execute at the best level. I found that after having traded the price would go against me so I would close out only to find that 10-15 minutes later my analsis was correct and it would work well in my favour. Also when I put my stops in they were too tight so I was getting spiked most times. Had I widened the stops it would have been a hell of a lot different. Thed argument to this is where do you draw the line on risk. Anyway enough about the past one needs to be positive so I have taken the following steps. Feel free to comment accordingly:-

1) Purchased "Technical Analysis of the Financial Markets" by John J Murphy from Amazon

2) Go back to work as I have been 'off-sick' for the last two months

3) Attend any weekend TA courses that may come up in due course or a similar course offered by someone like Chartman I think

4) Need to purchase "Japanese Candlestick Charting Techniques" by Steve Nison

5) Once all the above have been achieved then,as I don't get home from work until 7-00/7-30 pm I will need to practice my new knowledge with small size. What contracts do people suggest? I was thinking perhaps e-mini nasdaq, e-mini s&p, e-mini dow or eurostoxx if I am home in time. Don't know how manipulative the US ones are so any help any these would be cool

Anyway better go for now dinner is on the table.
Cheers
FTSEBOY