Lee Shepherd's Trading Diary

[Lee Shepherd]

How to handle the Losses

Hi all,

I was prompted to update a little on losses and in particular how to handle them.

I have a seen a couple of posts regarding this recently - although it relates to crypto currency, still has meaning and psychological impacts. This in turn can produce weird and wonderful outcomes to your trading, whatever that be you are trading with.

So allow me to get to the point of this post:

Here's my statement:
Yesterday I lost £16,500.00 on a single instrument trading.

I wont discuss which financial instrument or how I come to lose this as that's personal to my account only. However, what I would like to share is that the impact is and can be the same whether it be a loss of £16.50, £160.50 or a million and fifty. The point here is that the day goes on, life goes on and if you are a trader - trading for a living, then trading still goes on.

It's important to keep stats and although I don't want to keep going over old ground here, it's the only way one can realise whether or not they are doing the right thing. Needless to say, I do not regret trading that particular instrument and everything I did was right. This is key to ultimate success. Regardless of the outcome, do what is right, do what you plan and keep to it. Do or die.

Emotions play a big part in trading, in fact they affect everything in your life. Control your emotions or they will control you.

Elaborating on the point of doing things right, I also see this on the contrary, people will make calls, get scared, close the trade then watch it go in the direction they predicted time and time again.

Stick to what you believe and believe in what you do - whatever that may be.

#carryontrading

Good luck all and i'll update the journal in May 2018. More importantly its Friday so shutting down shortly to hit the pubs, clubs then lose more money at the Casino.

Screenshot added and edited for personal and security reasons - there to prove/show losses only.

PS: This is not my biggest loss.

Lee

 

[brewski1984]

Emotions play a big part in trading, in fact they affect everything in your life. Control your emotions or they will control you.

Elaborating on the point of doing things right, I also see this on the contrary, people will make calls, get scared, close the trade then watch it go in the direction they predicted time and time again.

Stick to what you believe and believe in what you do - whatever that may be.

Lee

 

[mpups]

Hi all,

I was prompted to update a little ..

Good to hear from you Lee

Can i ask why do you use spreadbetting ?

As you trade a nice juicy size and you are a bit of a wizz etc isn't direct market access better for you ?

 

[Lee Shepherd]

Good to hear from you Lee

Can i ask why do you use spreadbetting ?

As you trade a nice juicy size and you are a bit of a wizz etc isn't direct market access better for you ?

Hi Kaeso,

Good question. However, if I may, why would you not use spreadbetting?

Lee

 

[mpups]

Hi Kaeso,

Good question. However, if I may, why would you not use spreadbetting?

Lee

in a nutshell..

in circumstances where it's not cost effective or where it's restrictive in other ways

 

[Lee Shepherd]

in a nutshell..

in circumstances where it's not cost effective or where it's restrictive in other ways

Hi Kaeso,

I’ve never found my broker (IG) restrictive in any way. Buy or sell, carried out instantly. As for cost effectiveness, again, no problems here. I find them extremely competitive for price and great for service. This is based all on my own personal experiences. Although I know many others that also trade through them without fault, issue or problem of any kind.

Hence my being with them for many years now.

Obviously if one is trading from a different country then they may not have the same benefits as we do here in the UK.

Needless to say, it’s usually down to being under capitalised and a high level of ignorance as to why so many don’t make it. I heard a saying once that ‘an idiot doesn’t know they’re an idiot’. I’m not sure if that’s true as I’m not an idiot..... or am I. Who knows. 😂😂😂😂

Lee

 

[mpups]

..I’ve never found my broker (IG) restrictive in any way. Buy or sell, carried out instantly. As for cost effectiveness, again, no problems here. I find them extremely competitive for price and great for service. This is based all on my own personal experiences. Although I know many others that also trade through them without fault, issue or problem of any kind....

An example of what i was referring to when i said restrictive is the stock options you can trade on IG, or the exchange traded funds.. the list goes on... of things you don't have access to via spreadbetting

Cost-effective-wise, if the spreads one is subject to mean trades are cost effective compared to cheapest commission (direct access) then that's good, however, one is limited to the position size and instruments where spreads are cost effective, sometimes they will not be. There is also the financing of holding overnight even if you are not "borrowing" the money, which has an impact.

It doesn't matter though if you are happy trading the instruments they do offer, financing issues etc, its a great platform to use, i guess you are making more money than me anyway so i cant fault you!

..I heard a saying once that ‘an idiot doesn’t know they’re an idiot’. I’m not sure if that’s true as I’m not an idiot..... or am I. Who knows. ��������

You come across more as a whizz rather than idiot who doesn't know it!

 

[Lee Shepherd]

Handling swings

Right so here goes:

I'm now loaded up with some positions and the following posts will be about the swings.

I am expecting swings of around -+£3-5,000 per day. Although I would expect the majority of that to happen within a couple of hours of the markets open.

Handling the swings in your account can be daunting to say the least and is another factor as to why new traders will close out positions by usually one of the following ways:

The market is going in my favour so a few more points and I'm out, dam its gone back down, I'll close it now so I don't take a loss and instead take a few quid profit.

The other one is: dam it, its gone against me, now it's going my way I'll hold on till break even, maybe a little more then close out and take a small loss or small profit - ie, aim for break even.

All trades are made (in your head at least) before the execution of the said trade. In most cases there will be a set (or should be) parameters that you would follow, if not, you'll find yourself with one of the 2 outcomes listed above - or any combination of that.

I will post up screenshots (within 24 hours) to show these swings in account so that all who are interested can see that on a daily basis the account can go from a loss or gain of several thousands. I will only be showing a small portion of this over the coming days so the amounts will bounce around £3,000 to £5,000 per day.

Note: I'm not here to discuss the positions, the amount or the levels in play. This is simply to show the swings and to reiterate the do or die attitude. If the research is carried out correctly, then seeing out the trade is all one needs to do - however ,that is no guarantee in this world, just merely a statistic of odds.

Account is showing a loss of £-2,850.00

(for those not familiar with IG, the profit/loss is shown on the bottom of the screenshot)

This will go down or up by £3-5k on a daily basis.

Lee

 

[Lee Shepherd]

Handling swings

Its been brought to my attention that the single figure showing profit and loss would not be a true representative of the trades and swing amounts. In fact it could be by shear luck/coincidence that the overall figure remains the same whilst the individual trades bounce around. The 4 sets of individual positions will change but the overall may stay the same.

Therefore I will break it down in order of the 4 trades and as titled simply as 1,2,3 & 4.

So yesterday (21/5/18) at 17:37 the trades were as follows:

Trade 1: +£215.00
Trade 2: +£801.00
Trade 3: +£8,820.00
Trade 4: -£12,597.00

Total P/L = -£2,850.00

Today (22/5/18) at 10:14 the trades were as follows:

Trade 1: +£250.00 - difference of +£35.00
Trade 2: +£909.00 - difference of +£108.00
Trade 3: +£8,400.00 - difference of -£420.00
Trade 4: -£9,594.00 - difference of +£3,003.00

Total P/L =-£40.00

Swing of £2,810.00.

This will change throughout the day so I will update later. Although knocking off early today so may be tomorrow.

I'll also (when I make the time), discuss the different styles of trading profitably and to hedge and balance your book. I know of so many (failed/struggling) traders that tend to get involved with one particular instrument, they tend to see this as a master of one. However, a trader should always be able to diversify. Never marry a position, get in and get out and take what you can. That's the name of the game. You're in the position for a good time not a long time. And always diversify.

Happy trading all.

Lee

 

[barjon]

Lee

Can we see the swing in the context of your “die” risk on each instrument? And, maybe, the “do”?

 

[Lee Shepherd]

So just in under 2 hours we have sizeable movement. It's as follows:

So earlier today (22/5/18) at 10:14 the trades were:

Trade 1: +£250.00
Trade 2: +£909.00
Trade 3: +£8,400.00
Trade 4: -£9,594.00

Total P/L = -£40.00

Now almost 2 hours later (22/5/18) at 11:56 the amounts are:

Trade 1: +£530.00 - difference of +£280.00
Trade 2: +£1,029.00 - difference of +£100.00
Trade 3: +£8,232.00 - difference of -£168.00
Trade 4: -£7,614.00 - difference of +£1,980.00

Total P/L = +£2,204.00 (in just under 2 hours)

Swing of £2,164.00

Just under £5,000 in less than 24 hours.

 

[Lee Shepherd]

Harvesting the crop

Ok, so at some point this afternoon the bets I have on should be almost ready to harvest some cash. We've done the homework and the hard work, the easy part was clicking the button and getting filled. We've waited out the positions for which 1 out of the 4 have almost come to fruition whilst another is doing well and another basically at break even and the last one under water but not dead in the water. If all trades were closed, would net in the region of £5.3k



However, we haven't done all this to end up with just £5.3k. We're after more and based on our research, will get more..... in fact a lot more.

As from Tuesday (22/5/18) at 10:14 the trades were:

Trade 1: +£250.00
Trade 2: +£909.00
Trade 3: +£8,400.00
Trade 4: -£9,594.00

Total P/L = -£40.00

If it helps, those with small accounts can just knock a little off so it looks more like:

Trade 1: +£25.00
Trade 2: +£90.90
Trade 3: +£840.00
Trade 4: -£959.40 Practically 10 to 1 more leverage for those with micro accounts.


They now stand at (at 11:26 on 24-5-18)

Trade 1: +£110.00 - difference of -£140.00
Trade 2: +£2,385.00 - difference of +£1,476.00
Trade 3: +£10,836.00 - difference of -£2,436.00
Trade 4: -£7,977.00 - difference of +£1,617.00

Total P/L = +£5,354.00 (in 2 days)

Or, a movement of just over £7k between 48 and 72 hours.


The one set of trades (Trade 4) I am carrying for a big loss (although subjective) is well within its parameters so will be continued to be held. If there are losses here, they will be discussed separately on how to handle them. All 4 trades will move up and down based on news events and technical analysis, this is beyond my control. What is not beyond my control is what I do next. We've sown the crop, now its (almost) time to harvest.

Upon taking money out a trader would need to consider the following:

Putting some aside for tax (if applicable)
Putting some aside for a rainy day
Putting some in to a pension pot or other non risky/limited risk investment
And of course, personal spending (whatever that may be)

My next post will show updates on the portfolio and any profit taking.

These posts are purely about how to handle trades and not about individual trades, positions or entry exit levels and how its done. I'll look to cover that another time or down the pub.

Please Note: Should anyone wish to discuss in more detail or ask questions, please do so here:
If you want help/advice see here:
http://www.trade2win.com/boards/trading-journals/gene...-any-help.html


All the best,
Lee

 

[FXX]

You're living the dream Lee.This journal is aspirational and i just wanted to thank you for it.

 

[Lee Shepherd]

Harvesting the crop

So some of the positions are where they need to be to start chipping out some of them. This will bank the cash whilst limiting downside exposure and allow us then to take some money for ourselves - what we do with it is up to us but that's why we do this, right? For money. What we do with our money is up to us. Spend more time with family and loved ones, stay longer in bed, see the world, have financial freedom, be your own boss etc ect.

So here is a screenshot of the current balance (P/L). I will post up a screenshot shortly of the trade taken out and reflect in another post immediately after it is closed. The rest will be left to run.

The P/L now stands at (at 14:56 on 24-5-18)

Trade 1: +£180.00
Trade 2: +£2,505.00
Trade 3: +£11,088.00
Trade 4: -£6,228.00

Total P/L = +£7,545.00

Up £2,191.00 in a few hours. But we're not done there.

I'll post shortly of the closed position. Then will knock off early for a few drinks.

Lee

 

[Lee Shepherd]

Taking profits

I've now closed a small percentage of the trades on 2 out of 4 of the set trades.

I have taken the following:

1 trade for £938.00
1 trade for £1,239.00

Total taken = £2,177.00

The P/L now stands at (at 15:13 on 24-5-18)

Trade 1: +£40.00
Trade 2: +£1,164.00
Trade 3: +£10,087.00
Trade 4: -£5,964.00

Total P/L = +£5,327.00

Now the paperwork. Will take around 15-20 minutes but that's the mandatory stuff. Then i'm done for the day. Drinks then food then sleep then rinse and repeat.

Over and out,
Lee

 

[barjon]

I've now closed a small percentage of the trades on 2 out of 4 of the set trades.

I have taken the following:

1 trade for £938.00
1 trade for £1,239.00

Total taken = £2,177.00

The P/L now stands at (at 15:13 on 24-5-18)

Trade 1: +£40.00
Trade 2: +£1,164.00
Trade 3: +£10,087.00
Trade 4: -£5,964.00

Total P/L = +£5,327.00

Now the paperwork. Will take around 15-20 minutes but that's the mandatory stuff. Then i'm done for the day. Drinks then food then sleep then rinse and repeat.

Over and out,
Lee

I presume these hit target.? Do you take it at target or whip up a tight stop in case it just keeps going?

 

[Lee Shepherd]

Adding to winners

Since chopping out some of the trades, I have now loaded some more up using another instrument. This was carried out yesterday and is already showing a profit before I could show the carry of the spread (cost of trade). This is now titled as trade 2. Therefore we now have the following trades and amounts showing:

Trade 1: +£2,525.00
Trade 2: +£50.00 (new traded instrument opened yesterday)
Trade 3: +£1,542.00
Trade 4: +£12,782.00
Trade 5: -£6,690.00

Total profit showing on account = +£10,209.00

As it’s the start of the month, I would like to start the day with a little profit taking. Depending on the situation and news coming out on the now 5 different instruments, this may happen this afternoon - depending on volatility. The swings are currently still around £3,000 to £5,000 per day (over whole portfolio).

The above newly opened positions (trade 2 combines 2 positions) is a little pertinent to some posts I’ve seen recently talking about ‘pushing stock’ or ‘if it’s going in my direction what do I do’ and ‘adding to winners’.

Brewski will know all about this one – ‘keeping the faith’. - his £10k winner trophy

This is a case of the above but using a slightly different approach and using in particular a different but linked category to buy in.

Note: These posts are not about individual trades but instead showing very small methods on how I trade. It’s also shown to provide confidence to those who doubt that trading (profitably) for a living can be done. I’m sure many of you will trade very differently and therefore how I go about things will be very different to how you go about things. I’m not here to discuss with people who simply wish to chat about my individual ways (I’ll save that for the pub) or look to pick apart how I trade (usually in an attempt to find flaws from failed and disgruntled traders who can’t trade for profits), however, if anyone reading this post truly wishes for help or/and advice on how they trade and for those who want to learn to trade profitably and consistently, please post questions here:

If you want help/advice see here:
http://www.trade2win.com/boards/trading-journals/gene...-any-help.html

We’re now half way through the year, as a side thought, those that set out to trade profitably and take trading for a living seriously and for whom started in the New Year, have you reached that financial goal of trading for a living and taking out money from your account and not topping up? If not and you need that little nudge in the right direction, hit me up at the above link.

@Lewis, see you later in your new DB9.

Wishing you all a happy Friday,

Lee

 

[FXX]

if anyone reading this post truly wishes for help or/and advice on how they trade and for those who want to learn to trade profitably and consistently, please post questions here:

If you want help/advice see here:
http://www.trade2win.com/boards/trading-journals/gene...-any-help.html

Hi Lee

might take you up on that offer to assess my process and general trading for your opinion.

 

[Lee Shepherd]

I’ve chopped some trades out today. 4 trades in total split from 2 of the sets of 5 individual instruments.

Amount taken/profit is as follows:

Position 1: £405.00
Position 2: £780.00
Position 3: £420.00
Position 4: £695.00

Total taken = £2,300.00 – I’m happy with the first day of the month but as it's a Friday, the night will probably end up with most of it - unless I double it at the Casino

Left on account for all 5 sets of trades are as follows:

Trade 1: +£1,585.00
Trade 2: +£50.00
Trade 3: +£900.00
Trade 4: +£13,629.00
Trade 5: -£8,274.00

Profit remaining on account = +£7,890.00

As its Friday I’m wrapping up early as have some ‘networking’ to do.

Well I say networking but it’s actually seeing my friends new car (Aston Martin DB9) and hitting up for a ride then off to the pub, club then Casino whilst having a couple of Vodka dry Martini’s – shaken not stirred – Bond style – especially as the colour is Quantum Silver. I don’t like the drinks to be honest though. Too manly for me.

Paperwork next and accounting for closing of positions, should take around 40 odd minutes then hot tub, bite to eat then hit the road from 0-60mph in a flash. I’ll be dead in no time at all.

Wishing you all a great weekend,

Lee

 

[FXX]

Nice work there Lee. Have a martini for me will ya

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