timsk
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Hi caudurow3,
Scrap 1) - the three month trend is useless for day trading. On that basis you will only be looking for shorts. Look at a daily chart of the FTSE or DOW and see what's happened over the last four days. Of course, some people will have made money being short over this period. Many, many more will have done so from long positions. DAY traders are interested in what the indices are doing on the DAY. (There's a clue in there somewhere.)
Your shortlist should contain potential shorts AND longs for the reason given. So, over the last four days when the market has rallied, you'd have traded from the list of strongly up trending stocks. To paraphrase Gey1, 'market first, stock second'. Let the market direction on the DAY (i.e. main indices) dictate whether you trade long or short. Another little exercise for you. Look at the stocks you've shortlisted as strongly down trending. Look and see if any of them have either failed to rally in the last four days or only done so very slightly. If / when the market turns back down, these are the stocks on your shortlist to trade short. Visa versa for longs, obviously. One last point, if you're determined to stick with spread betting (nothing wrong in that) and trading stocks - quit day trading and move to swing trading over a 2 - 5 day period. This will help mitigate the effect of the wide spreads and enable you to take advantage of the strong moves associated in the first and last 30 minute periods.
Tim.
There are three key things day traders typically look for: liquidity, volatility and tight spreads. Depending upon your choice of stocks, you may have liquidity, but U.K. stocks tend not to be very volatile and you certainly haven't got tight spreads. This last point alone will ensure 90% fail. Your decision to SB is fine but you must find instruments that have a decent daily range, i.e. decent volatility. If you're open to the idea of switching instruments, then I suggest you look at indices. Many SB firms have a 2 point spread on the FTSE and DAX and a 4 - 5 point spread on the DOW.
Commissions are something of a red herring. Just because you don't get a statement with red figures in brackets in a column headed 'Commissions' - doesn't mean you don't pay them. (Forgive the double negatives.) You do pay commissions - and they're hefty. It's just that you're not aware of them because they're hidden in the spread. I'm not knocking SB firms here, I'm merely pointing out the reality. Again, it's imperative that you find instruments with the tightest spread possible.
Yes indeed. I turned £20k virtual money into £150k in the ETX 'Beat THe Broker' competition last week. Sadly, Im not managing to achieve quite such impressive gains this week with real money.
As others have commented, your risk management is among your strong points. However, avoiding the first and last 30 min's of the day is probably when the bulk of the day's move takes place. Try this: take 5 - 6 stocks from across the board that you've traded recently. Note their high / low range each day for a week. Then note their high / low range excluding the first and last 30 min's of each day. This is pure guesswork on my part (I don't trade U.K. stocks) but the revised figure could easily be 10% less? Take the BHP example from my first post with a daily range of 108 and with an 8 point spread. Its range now becomes 97p. (108 - 10%) BHP now has to move 8.2% of its daily range just to enable you to break even!!! If you can make a consistant profit doing this, then I will personally come and throw myself at your feet, because you will be a trading genius. I don't know of anyone who does it. I'm sure it can be done and, doubtless, there are traders on this very forum who do it, it's just that I don't know of any.
Lastly, simple is good. We like simple.
Scrap 1) - the three month trend is useless for day trading. On that basis you will only be looking for shorts. Look at a daily chart of the FTSE or DOW and see what's happened over the last four days. Of course, some people will have made money being short over this period. Many, many more will have done so from long positions. DAY traders are interested in what the indices are doing on the DAY. (There's a clue in there somewhere.)
Your shortlist should contain potential shorts AND longs for the reason given. So, over the last four days when the market has rallied, you'd have traded from the list of strongly up trending stocks. To paraphrase Gey1, 'market first, stock second'. Let the market direction on the DAY (i.e. main indices) dictate whether you trade long or short. Another little exercise for you. Look at the stocks you've shortlisted as strongly down trending. Look and see if any of them have either failed to rally in the last four days or only done so very slightly. If / when the market turns back down, these are the stocks on your shortlist to trade short. Visa versa for longs, obviously. One last point, if you're determined to stick with spread betting (nothing wrong in that) and trading stocks - quit day trading and move to swing trading over a 2 - 5 day period. This will help mitigate the effect of the wide spreads and enable you to take advantage of the strong moves associated in the first and last 30 minute periods.
Tim.
barjon
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hi, caudurow
Trading FTSE100 shares is my main game, which I do via eod and trend continuation after retracement.
You say "My logic was to buy short the breakdown of the support at 280 so I automated the entry at 272.0 with the stop loss at 279.0. I was expecting it to fall to 240 within a couple of days should the stock continue the downtrend.". In my opinion, if you are looking at a few days' timescale then your analysis - potential entry and exit zones - should be via eod with your 10 min intraday just used for fine tuning those entries/exits.
In my experience, intraday trading of FTSE100 shares is not an easy ride, particularly in the volatile climate we are in at the moment.
good trading
jon
Trading FTSE100 shares is my main game, which I do via eod and trend continuation after retracement.
You say "My logic was to buy short the breakdown of the support at 280 so I automated the entry at 272.0 with the stop loss at 279.0. I was expecting it to fall to 240 within a couple of days should the stock continue the downtrend.". In my opinion, if you are looking at a few days' timescale then your analysis - potential entry and exit zones - should be via eod with your 10 min intraday just used for fine tuning those entries/exits.
In my experience, intraday trading of FTSE100 shares is not an easy ride, particularly in the volatile climate we are in at the moment.
good trading
jon
@new trader - I'm not just guessing, I'm following the guidelines I outlined. Although the results seem pretty random (like guessing)
@timsk thanks for all the insight - very helpfull! Maybe I should move to the indices I will think about that. As a newbie I really don't have much of a reference for the pitfalls of each type of underlying (commodities, equities, indices, forex). I guess I will just have to burn my hand a few times on each to understand them better.
@barjon thanks for the tips. Could you give an example of "trend continuation after retracement"? The reason I have gone to intrady is that I have experienced some heavy losses (above my desired risk) when holding the stocks overnight (my stops are usually 10-20p above/below my entry) and I get caught out invariably in the whiplash at the beginning of trading. I have also noticed that spreads increase at this time of day as I suspect SB firms have some formula that accounts for price movement in their spread price formulation.
[As a side note - I have been keeping a journal of the trades, but no images of the entries and exits, I guess this is something I will add now]
@timsk thanks for all the insight - very helpfull! Maybe I should move to the indices I will think about that. As a newbie I really don't have much of a reference for the pitfalls of each type of underlying (commodities, equities, indices, forex). I guess I will just have to burn my hand a few times on each to understand them better.
@barjon thanks for the tips. Could you give an example of "trend continuation after retracement"? The reason I have gone to intrady is that I have experienced some heavy losses (above my desired risk) when holding the stocks overnight (my stops are usually 10-20p above/below my entry) and I get caught out invariably in the whiplash at the beginning of trading. I have also noticed that spreads increase at this time of day as I suspect SB firms have some formula that accounts for price movement in their spread price formulation.
[As a side note - I have been keeping a journal of the trades, but no images of the entries and exits, I guess this is something I will add now]
As you've taken the time to post in detail listen to the advice:
1. Don't scalp UK stocks on the SB's - they'll kill you. If you must try and scalp - use the indicies. Even better, don't scalp until you can make money on a daily chart.
2. Trade continuation after the retracement is the best piece of advice on the thread. Why buy in the charts you show when you could've shorted twice and made money. Wait for the price to hit averages and fibs and 9 times out of ten you will make money on any timeframe. Not sexy but true.
3. Money management - get paid to trade. Have profit targets based on the range of retrace ie if the price retraces 10 points, take profits at 2.5/5 and 10 points. Move to breakeven after the P1 is hit.
The 3 points above will cost you between £1k and £5k if you buy a course or seminar - don't bother. Once you have been trying for a year and start to get desperate go to basics and suddenly you will understand.
2 more pieces of advice:
1. Do your homework on price action, it's invaluble on any TF
2. Do not buy trading software!!!
Hope this helps and good luck
Hi,
I havent had time to read all the pages of replies but it sounds like you have your head screwed on even though you have made some losses. I'm a relative newbie and have heeded lots of advice given to me on this forum and it's saved me a lot of problems. I started trading Ftse100 as did my friend at the same time, i started with a business plan, only risking 2% of my capital and letting my profits run while taking small losses. My friend jumped in both feet without looking, so to speak. At the moment im winning about 65% of the time but because of my plan, risk-reward and money management, i am still well in the game and learning a lot as well as building my account up.
My friend hit a winning streak to start with and got cocky, he's wiped out half his capital now and I havent seen any Moet in the fridge for a few weeks now! I have found that you can't really make a bad trade, if you learn from every trade you make you will always take something away from it. No such thing as mistakes..... I just call bad moves "feedback" to learn from.
Money management, risk-reward, learning from bad trades and a good plan seem to be the key in my humble opinion.
I havent had time to read all the pages of replies but it sounds like you have your head screwed on even though you have made some losses. I'm a relative newbie and have heeded lots of advice given to me on this forum and it's saved me a lot of problems. I started trading Ftse100 as did my friend at the same time, i started with a business plan, only risking 2% of my capital and letting my profits run while taking small losses. My friend jumped in both feet without looking, so to speak. At the moment im winning about 65% of the time but because of my plan, risk-reward and money management, i am still well in the game and learning a lot as well as building my account up.
My friend hit a winning streak to start with and got cocky, he's wiped out half his capital now and I havent seen any Moet in the fridge for a few weeks now! I have found that you can't really make a bad trade, if you learn from every trade you make you will always take something away from it. No such thing as mistakes..... I just call bad moves "feedback" to learn from.
Money management, risk-reward, learning from bad trades and a good plan seem to be the key in my humble opinion.
Agree with this - I have daytraded uk stocks on an SB platform for over 3 years.
1st yr - losing - 1 step forward 3 steps back.
2nd yr - losing - 1 step forward 2 steps back
3rd yr - finally getting there just about breaking even.
4th yr - 3 steps forward 1step back especially due to the volatility of the last 5 months.
My equity curve is now trending up, one of the main reasons I began to improve is I ditched the indicators,I thought I,d found the holy grail with stoch, sell when its above the upper ref line - buy when its below its lower ref line, this sometimes works when the markets are ranging, but not in trends. During the trending phases when stoch goes above the 80 upper ref line and you go to sell looking for the reversal, well that little old stoch just hangs in there rubbing along the roof while the most important thing PRICE keeps on moving up and up.
Caudurow 3 , save yourself the frustration mate, forget the indicators, MA,s are ok for trend confirmation.
Get some chart time in and concentrate on PRICE, sentiment, momentum both with or against the trend and keep an eye on S/R Levels.
You aint gonna get there in 6 months, you have got to get thro the pain barrier and the learning curve, keep your pos size small, no more than £1 a point, always use stops and protect your capital. After a couple of thousand trades you will get there mate - SHEESH.
Boy do those miners stocks move.
Hey guys! Thanks for the advice - I don't use any indicators though! I just put them in there in case anyone might spot something I'm not seeing (I don't see anything apart from what has already happened to the price which seems a bit useless)
@jonnyace "Even better, don't scalp until you can make money on a daily chart." Do you mean I should keep trading only end of day and not intraday? The only way I think I can achieve this is by only going after stocks that are less than 200p and are less likely to move more than 20p in early trading. And it is unlikely they will move 40p in my direction (20%) on a regular basis for a 2:1 risk reward. How do you suggest I trade EOD?
From your responses I feel as if I missed quite a few classes and I have a lot of catching up to do!
@jonnyace "Even better, don't scalp until you can make money on a daily chart." Do you mean I should keep trading only end of day and not intraday? The only way I think I can achieve this is by only going after stocks that are less than 200p and are less likely to move more than 20p in early trading. And it is unlikely they will move 40p in my direction (20%) on a regular basis for a 2:1 risk reward. How do you suggest I trade EOD?
From your responses I feel as if I missed quite a few classes and I have a lot of catching up to do!
barjon
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caudurow
For my extra twopennyworth, I would caution against searching for something different if you have thought out your approach and it makes sense to you. That said, I did a bit on my general approach here T2W Day Trading & Forex Community and the swingin' ftse threads follow it up as far as the index itself is concerned. There's also this thread http://www.trade2win.com/boards/swing-position-trading/12009-swing-position-trading.html which from about page 10 developed into discussions about specific share trades, mostly FTSE100.
I can understand how you feel about overnight and opening gaps, but that's where a lot of the gain comes from with shares if you're on the right side. You're right that SBs often have pretty fearsome spreads at the start of the day until the market price settles down and you have to cater for that if you are going to use them.
good trading
jon
foredog
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Quick point first SELL short, BUY long, just to stop any confusion.
On the ICAP trade you wanted to short on the break of 280 but traded 3% away from this, that's already a fair move from the break. i know it's a thin stock but still if you can't trade within 1/2% of the break it's probably not worth it.
The candle you shorted on and the next were both PIN BARS (google it if you don't know) a classic reversal so the price not going much lower than you're entry on two candle should set alarm bells ringing.
hope this helps.
fibonelli
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Hi Caudurow,
Kudos to you for posting a couple of charts. You're the first person to this at my asking.
So i've lost my imaginary bet.
Glad you've received some feeedback.
Now to those two charts.
You've posted up charts on a 10 min timeframe. I don't know if you analyse higher timeframes. If you don't, you need to.
ICAP - I can't seem to upload a chart. If you look at a 4hr chart, you will see that there is a support/resistance pivot zone between 265-280. Therefore, I could see no reason for a short entry. You're shorting close to an area of support (demand) and after the price has fallen a lot.
On the 10 minute, the oscillators are in the oversold region and there is bullish momentum divergence on the Stochs 14 3 5.
I'm sure a similar error applies to Hammerson.
Good luck.
Kudos to you for posting a couple of charts. You're the first person to this at my asking.
So i've lost my imaginary bet.
Glad you've received some feeedback.
Now to those two charts.
You've posted up charts on a 10 min timeframe. I don't know if you analyse higher timeframes. If you don't, you need to.
ICAP - I can't seem to upload a chart
. If you look at a 4hr chart, you will see that there is a support/resistance pivot zone between 265-280. Therefore, I could see no reason for a short entry. You're shorting close to an area of support (demand) and after the price has fallen a lot.On the 10 minute, the oscillators are in the oversold region and there is bullish momentum divergence on the Stochs 14 3 5.
I'm sure a similar error applies to Hammerson.
Good luck.
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