Still confident but slight doubt creeping in!

[bigal60]

Hi

I'm about 5 weeks into trading as a novice but obviously still early days. So far, and as far as I can tell, I've been patient and disciplined and followed my self-imposed rules to the letter. I only trade 1-2% of my account (starting funds £500), I always use a guaranteed SL and I NEVER move it to protect a trade; there are others but I think you get the drift. At the moment I only trade shares.

On the negative side I am down £55 at the moment and I have 5 trades running (2 sells and 3 buys). I have lost 9 trades in a row - about £6/trade. Without a doubt I have entered the market at a very volatile time and perhaps I am guilty of over trading - all things considered.

On the positive side I am only down just over 10% of starting funds due to small trades and using a SL. Also I am now used to losing and maybe that's not a bad thing as a novice trader (!); however I am reaching a point where a small win/profit on just one trade would be a definite pyschological boost!

Anyway I remain confident and fairly unemotional about where I am at the moment. Does this sound like a familar story so far, or should I be concerned that I've still not hit that elusive first winner?

Regards, Big Al

 

[meanreversion]

Sounds like you're approaching it in a logical and realistic fashion, this should help. I reckon 6 months will give you a better idea, though.. 5 weeks a little too soon.

 

[pboyles]

It sounds like you are pretty disciplined however I'm not sure that your system is much good. No winners in nine trades isn't good regardless of how small your losses are. Unless you've been terribly unlucky it would seem to me that something is not right whether it is having too tight a stop or just entering bad trades or trading against a strong trend. Can you post more information about your trading style? Are you spreadbetting?

 

[pboyles]

Actually I've re read your post and it's clear you are spreadbetting as you mention a guaranteed stoploss. I'd give that up right away and get yourself a demo account from a proper equities broker, start putting on demo trades and see how you get on. You won't be paying a massive spread and they won't be moving the prices around to take you out. If you can't make money doing that then youll know you don't have a profitable system.

 

[Black Swan]

hmmm...as pb suggested 9 losses in a row is a worry, even random entries/picks could have a better RR. But on the positive side your MM appears sound and it's only resulted in a 10% loss, textbook advice for a new trader as to why you should only risk 1-2% per trade, so really well done on that, it is the perhaps the true holy grail of trading...

We could all write reams on this thread so I'll donate a few words, IMHO it boils down to 3 words; experience, experience, experience. Keep on doing in order to experience. I tend to state this ad nauseum; it'll take you a year of full time trading to become proficient, perhaps double that if part time... then you may begin to get profitable...

Short cuts? Nope. Can you shorten the learning curve? Absolutely, but that'll take thousands of hours of dedication...

 

[Splitlink]

Hi

I have lost 9 trades in a row - about £6/trade.
Regards, Big Al

I think that you have most of your disciplines in place. What you must do, now, is resign yourself to the fact that nine losses in a row is an indication, if not a certainty, that that system is not working.

That's cost you £55. Without wanting to be patronising, I say good for you. It has cost most of us much more than that.

Pack that system in, stop trading for a bit, and try something else but, whatever you do, keep the loss, if you can, at the same level. If you can do that, you will always live to fight another day.

This may, or may not, last more than 5 weeks. How long does it take to learn a profession?

Animo.

 

[Splitlink]

If you are trading at £1 per point, taking into consideration spread, it may be a bit tight. Maybe, your stop is too close? It is possible to do 50p which would give you 12 points inc. spread.

 

[shadowninja]

Yep, depends on your style of trading. Short term, swing, position...

 

[bigal60]

Can you post more information about your trading style?

Hi

many thanks for suggestions/advice, much appreciated.

Basically I just look for trends using SMAs backed up by good/bad company news and the state of the market in general. I also look at ranging, channel breakouts, 52 week highs/lows, etc; I like to keep things as simple as possible...

I try to keep stops fairly tight; all other things being equal I suppose my average stop would be 5-7% of entry share price, sometimes higher depending on what my IG account allows me to do.

Cheers, Big Al

 

[bigal60]

Hi again

BTW I've been using 0.10, 0.20 and now 0.50p/trade using TradeSense offer with IG Index. BigAl60

 

[shadowninja]

Have you tested this size of stop?

 

[Splitlink]

Another thing to watch, especially as you seem to be fairly well disciplined, always doing the same kind of entry, is that the market tries to get back what you gain from it. Do you often find yourself in profit at first, drifting back in a reversal, to get stopped out? This can happen often with a close stop. Have you tried a 1:1 risk factor, being content with a target equal to the risk?

 

[Adamus]

17 in a row is the maximum number of losing trades I've seen and that's in backtesting the system I'm looking at trading - so the rest of the results are pretty good. But this is mechanical trading systems.

How do you know your system has a good chance of being profitable? What's your confidence based on?

If it's not based on some solid research and if you don't have some solid numbers that are the worst you are prepared to accept before you bail out, then you'll end up ditching the system at some random point depending on how you feel that day.

 

[Splitlink]

I'd say that 9 losses in a row are too many.

 

[bigal60]

Another thing to watch, especially as you seem to be fairly well disciplined, always doing the same kind of entry, is that the market tries to get back what you gain from it. Do you often find yourself in profit at first, drifting back in a reversal, to get stopped out? This can happen often with a close stop. Have you tried a 1:1 risk factor, being content with a target equal to the risk?

You've just descibed at least 6 of my losing trades! Perhaps I am too tight with the stops? I'll have to look at this again carefully, cheers Big Al60

 

[bigal60]

OK bottom line...

here's a trade I'm thinking about next week so please tell me what you think; is it reasonable, plain stupid or genius (the latter being very unlikely!)

BUY BRITVIC WHEN PRICE REACHES 480 (CURRENT PRICE 460) @ 0.20p GUARANTEED STOP LOSS 40

I've done some research, checked the 200/400 SMAs, etc., etc.

Is this a trade you would do, and why, or is it a trade you wouldn't touch with a barge pole, and why?

Look forward to your honest and constructive comments/criticisms,

Regards,
Big Al

 

[kimo'sabby]

OK bottom line...

here's a trade I'm thinking about next week so please tell me what you think; is it reasonable, plain stupid or genius (the latter being very unlikely!)

BUY BRITVIC WHEN PRICE REACHES 480 (CURRENT PRICE 460) @ 0.20p GUARANTEED STOP LOSS 40

I've done some research, checked the 200/400 SMAs, etc., etc.

Is this a trade you would do, and why, or is it a trade you wouldn't touch with a barge pole, and why?

Look forward to your honest and constructive comments/criticisms,

Regards,
Big Al

Is this your one and only trade open at the moment?

 

[bigal60]

Is this your one and only trade open at the moment?

Hi

no I have 2 sells and 3 buys all at 0.20p/point. The 3 buys have been running for about 3 weeks but not going anywhere at the moment (though plenty of stop in reserve), cheers
Big Al

 

[kimo'sabby]

Hi

no I have 2 sells and 3 buys all at 0.20p/point. The 3 buys have been running for about 3 weeks but not going anywhere at the moment (though plenty of stop in reserve), cheers
Big Al

How long do you think you are going to hold for?

 

[Splitlink]

The spread I have at present, which may be better when the exchange is open, is 1.22 pence. My limited knowledge suggests that that is fine. What about that takeover it's just done? Will that affect profits in the near term? In any case, I'm leaving share selection to you guys! Lately, I've been on indices so as to avoid all that and just watch a few favourites. Nothing wrong with it, just my age and inclinations!