Surfing the 100 waves!

[Silversurfer564]

After months of tinkering with spread betting I have decided to start this thread to try and keep myself in line and stick to my trading plan. If I lose the lot then it's goodbye to spread betting; as much as I enjoy it i'm not going to continue if i'm crap at it!

My aim is to trade 100 times and try and work out a percentage of loss/gain at the end. I have a starting pot of £5000 and will be trading only the SandP500 from 0800 UK Time until close of day / 2100 uk time.

With an average stop loss of 3-5 pips at £10 a pip this should keep me in the 1% zone of risk management.

At the end of each day I will update my thread with any results of my trading and promise to be 100% honest.

I have not borrowed any money to do this, it is all my own hard earned cash and my risk to take. I would rather not lose the lot but if i do so be it. You only live once

 

[Silversurfer564]

Here goes with my first trade then!

All my trades are on the S and P 500.
I have placed a buy trade of £10 at 2075.5
My stop loss is 2073.5 giving a risk of 2 pips.
I have already moved my stop up a little , the reason being it bouced off 2074.7 and my RSI indicator came back up through the 30 heading northound after a double dip.
I'm never sure about moving stops up and have been caught out a few times when it goes through the stop then down a couple of points and rebounds.
I also spotted a support level at 2075.1 on the 14th April which it bounced straight off and then again on the 25th April at 2077.2
This is where it gets difficult for me as I really stuggle with risk management.
Trade has gone up to 2078 and I could place a stop at my entry price and run it.
If I lose then I've lost nothing but theres a chance of a good gain. However if my entry price stop is hit and my previous stop was sound then I could be shooting myself in the foot. Any ideas?

 

[tomorton]

OK, it has got a range going but at only 6-7pts wide there's not much margin for error. Did you intend to trade the range or were you anticipating a break-out?

 

[tokyojoe]

Hi Silversurfer, they (the SB co) will shunt every position you enter, as soon as you press OK they already have the other side of your trade (& that's without even being at the mercy of the open market) I have spoken & in depth with the SB's & many others & know this as absolute fact.

It is very important that you understand this if you do not already.

I usually only do a couple of hours in the afternoon these days, 8am-9pm is a very long day in my eyes. I only trade the Dax, but the basic facts remain the same for all instruments.

£10 per point is still potentially going to see your £5k picked to death on 3-5 points & I say this as a great advocate of bailing quickly when it turns nasty.

The only way you will be able to stand a chance in this game is to understand the movement & inducement scenarios. Only true market weight will carry you, so stay out of slow chop.

Patience & timing will be your ally. Good luck, at least it's your own money

 

[Silversurfer564]

After months of tinkering with spread betting I have decided to start this thread to try and keep myself in line and stick to my trading plan. If I lose the lot then it's goodbye to spread betting; as much as I enjoy it i'm not going to continue if i'm crap at it!

My aim is to trade 100 times and try and work out a percentage of loss/gain at the end. I have a starting pot of £5000 and will be trading only the SandP500 from 0800 UK Time until close of day / 2100 uk time.

With an average stop loss of 3-5 pips at £10 a pip this should keep me in the 1% zone of risk management.

At the end of each day I will update my thread with any results of my trading and promise to be 100% honest.

I have not borrowed any money to do this, it is all my own hard earned cash and my risk to take. I would rather not lose the lot but if i do so be it. You only live once

OK, it has got a range going but at only 6-7pts wide there's not much margin for error. Did you intend to trade the range or were you anticipating a break-out?

I trade the range but also try and anticipate a breakout if i can. I try to keep my stops quite open at the start and then will sometimes move them if RSI breaks through 30 on the one minute chart after two dips and my trade climbs. Then I will let it ride and wait to see if it starts to hit 70 on the RSI and take when i feel the time is right. This is not the only way I trade , I will also trend trade and use moving averages , support and resistance accompanied with the RSI , I tend to let these trades run a lot longer , sometimes a full day and will always close out before the close.

 

[timsk]

. . . I have not borrowed any money to do this, it is all my own hard earned cash and my risk to take. I would rather not lose the lot but if i do so be it. You only live once

Hi Silversurfer564,
What I have to say may sound harsh and somewhat negative, but I assure you that I mean well and have your best interests at heart.

Stop trading!
At least, stop trading with real money. Comments like: "I'm never sure about moving stops up", "I really struggle with risk management" and your closing remarks about stop placement all indicate that you don't yet have a thoroughly tested plan in place that you can trade with confidence. I suggest you iron out these grey areas so they are black and white and you know exactly what you'll do - regardless of the circumstances and what the market throws at you. Once you've done that, start demo trading.

What you propose doing is, in broad terms, absolutely fine - but not on a live account. Do it on a demo account and do your analysis as planned after 100 trades. If it doesn't work, then the money lost will be paper money and you can, hopefully, work out what went wrong, make any necessary alterations and try again. Keep doing this on demo only until you're making consistent gains.

When you do switch to live trading, start at just £1.00 per point and build up incrementally from there. Trading the S&P at £10.00 p/p on a £5k account without a tested plan in place is a recipe for disaster. You could easily be 5% down on the day. That assumes you stick to a max loss of 1% per trade and don't suffer from slippage etc. Have a bad week and you could have a drawdown of 20%, 25% or more by the end of it. This will sap your confidence no end, lead to frustration and 'revenge' trading and taking ever greater risks. How do I know? I've got the T-shirt! Avoid this misery by getting your trading plan as watertight as possible in advance of live trading.

Good luck,
Tim.

 

[Silversurfer564]

Hi Silversurfer, they (the SB co) will shunt every position you enter, as soon as you press OK they already have the other side of your trade (& that's without even being at the mercy of the open market) I have spoken & in depth with the SB's & many others & know this as absolute fact.

It is very important that you understand this if you do not already.

I usually only do a couple of hours in the afternoon these days, 8am-9pm is a very long day in my eyes. I only trade the Dax, but the basic facts remain the same for all instruments.

£10 per point is still potentially going to see your £5k picked to death on 3-5 points & I say this as a great advocate of bailing quickly when it turns nasty.

The only way you will be able to stand a chance in this game is to understand the movement & inducement scenarios. Only true market weight will carry you, so stay out of slow chop.

Patience & timing will be your ally. Good luck, at least it's your own money

Hi Tokyojoe.
I know what you mean about the choppy trading thing and fully understand that the more I trade the more I lose on spread. I will only trade the chop if I feel the timing is good. I never trade during a news announcement and have a great breaking news app on my phone which has saved my skin a couple of times and also made me some good profit.
I definitely prefer to trade on a trend and use moving averages , RSI and support and resistance . I always account for the spread on my stop loss including when I move it up under another level. Have only been trading for a couple of years off and on and definately still learning so appreciate any advice.
Your last comment was the most important ,patience and timing. I have come a long way from my first account (£1000) which I blew learning the hard way. Adding to losing trades and increasing stakes etc.... I have three kids also so I definately can't watch the screens for that length of time , I will just keep an eye out for opportunities and have the screen in view. I check support and resistance points in the morning the place them on the screen and will pay more attention when I see them approach.

 

[barjon]

In answer to your question I'd say do both - one for real and the other noted. Do this each time and you will learn after your 100 trades whether any one option has a significant advantage over the other.

As Tomo points out you're playing a tight game and perhaps knocking a 0 off your position size, ifnot going the whole Timsk "stop trading" hog, will allow experimentation as you develop your approach and rules.

 

[Silversurfer564]

Hi Silversurfer564,
What I have to say may sound harsh and somewhat negative, but I assure you that I mean well and have your best interests at heart.

Stop trading!
At least, stop trading with real money. Comments like: "I'm never sure about moving stops up", "I really struggle with risk management" and your closing remarks about stop placement all indicate that you don't yet have a thoroughly tested plan in place that you can trade with confidence. I suggest you iron out these grey areas so they are black and white and you know exactly what you'll do - regardless of the circumstances and what the market throws at you. Once you've done that, start demo trading.

What you propose doing is, in broad terms, absolutely fine - but not on a live account. Do it on a demo account and do your analysis as planned after 100 trades. If it doesn't work, then the money lost will be paper money and you can, hopefully, work out what went wrong, make any necessary alterations and try again. Keep doing this on demo only until you're making consistent gains.

When you do switch to live trading, start at just £1.00 per point and build up incrementally from there. Trading the S&P at £10.00 p/p on a £5k account without a tested plan in place is a recipe for disaster. You could easily be 5% down on the day. That assumes you stick to a max loss of 1% per trade and don't suffer from slippage etc. Have a bad week and you could have a drawdown of 20%, 25% or more by the end of it. This will sap your confidence no end, lead to frustration and 'revenge' trading and taking ever greater risks. How do I know? I've got the T-shirt! Avoid this misery by getting your trading plan as watertight as possible in advance of live trading.

Good luck,
Tim.

Hi Timsk,

Great to hear your views and definitely not too harsh. When I say i'm not sure about risk management it doesn't mean I dont understand it and I do have a trading plan in place.With my stops all I mean is that sometimes I move my stop up behind my trade to lock in a profit and someimes it gets hit , I understand what you are saying about a demo account also and I have been trading for months with small amounts and made hundreds of trades . The reason for this thread is to help me stick to my tested plan which has done ok so far in practise with small amounts. I have very, very rarely suffered slippage recently to be honest as I never trade on big news and will close out my trades well before hand, I never leave a trade open overnight or at the weekend. I have no intentions of blowing my account. When I started spread trading I thought it was easy and made so many mistakes. I was lucky at the start and then blew a grand in about two months on the FTSE 100 and even the Dow30! I closed my account and left it for a few months. Now I am ready.

 

[Silversurfer564]

Closed out my first trade at 2079.8 giving me a profit of £43.00
It was coming up near a resistance level of 2080-2082, the 1 min RSI went up past 70 then back through again and I took my small profit.
It went to 2080.6 at its highest point in the trade and is now back around the 2075 mark.
99 to go!

 

[timsk]

When I say i'm not sure about risk management it doesn't mean I dont understand it and I do have a trading plan in place. . .

Hi Silversurfer564,
Understanding risk and money management and having a risk and money strategy that forms part of your trading plan - are two different things. If you've got the latter all sorted - that's great to hear - but the comments in your OP suggest otherwise.

Regarding your trade size, as well as me, other very experienced traders recommend starting off with much smaller size. Coincidence? Perhaps, but why take the risk? If you're too impatient using real money to replicate the success you've had paper trading, the market will take you to cleaners and your £5k account will be gone in double quick time.

Lastly, of course you have no intention of blowing up your account. No one ever does! I remember writing something similar just prior to losing £3.5k on a £5k account in 24 hours.

Tim.

 

[Silversurfer564]

Hi Silversurfer564,
Understanding risk and money management and having a risk and money strategy that forms part of your trading plan - are two different things. If you've got the latter all sorted - that's great to hear - but the comments in your OP suggest otherwise.

Regarding your trade size, as well as me, other very experienced traders recommend starting off with much smaller size. Coincidence? Perhaps, but why take the risk? If you're too impatient using real money to replicate the success you've had paper trading, the market will take you to cleaners and your £5k account will be gone in double quick time.

Lastly, of course you have no intention of blowing up your account. No one ever does! I remember writing something similar just prior to losing £3.5k on a £5k account in 24 hours.

Tim.

Wow! 3.5 grand in 24 hours and you're still trading shows your determination . The most I lost in a day has probably been around the 400 pound mark when I first started and it nearly gave me a heart attack , since then I have not lost more than 200 and in the last 6 months not more than £60. Would it be rude of me to ask what percentage profit your making on average now . My biggest gain so far has been £360 With a stop loss of 3 whole pips. That was recent and not luck. It was traded from a breaking news report. I really appreciate all your comments ,thanks.

 

[timsk]

Hi Silversurfer564,

Wow! 3.5 grand in 24 hours and you're still trading shows your determination.

There's a fine line between determination and obstinate bloody mindedness! It was a very long time ago and, whilst I like to think I've learned from my mistakes and that it won't happen again, I've come to the view over the years that this game involves more risk than many traders realise and that 'black swan' events happen to most of us sooner or later. For evidence of that, check out the threads on here by traders who lost everything in the SNB interest rate fiasco in January last year. It may not conform to everyone's definition of a black swan event - but the consequences are much the same: catastrophic losses.

Would it be rude of me to ask what percentage profit your making on average now.

Not at all - ask anything you like. At the moment, I admit that I'm all mouth and no trousers as I'm not trading my live account. I trade the Dax and had a larger than expected drawdown a while back and want to be as confident as I can be that I've addressed the cause. In that respect at least, I'm following my own advice. My version of your 100 trades is to double the size of my demo account and only return to live trading once I've achieved that. I'm 95% there so, if everything continues to go to plan, I'll be off demo next month.

In terms of percentage gain, it's quite high, around 1% per day, but that's because I'm over leveraged at 4:1, trading at £1.00 p/p on £2.5k account. For comfort, I'd halve that, but my broker's minimum stake size is £1.00 and, for reasons I won't bore you with, I don't wish to deposit more funds.
Tim.

 

[tomorton]

Not at all - ask anything you like. At the moment, I admit that I'm all mouth and no trousers as I'm not trading my live account. I trade the Dax and had a larger than expected drawdown a while back and want to be as confident as I can be that I've addressed the cause. In that respect at least, I'm following my own advice. My version of your 100 trades is to double the size of my demo account and only return to live trading once I've achieved that. I'm 95% there so, if everything continues to go to plan, I'll be off demo next month.

This is welcome news Tim, you must have clearly addressed the money management side of your trading - what about the trades themselves, what's the basic plan here? Has the demo trading changed this in any signficant ways?

 

[timsk]

. . . what about the trades themselves, what's the basic plan here? Has the demo trading changed this in any signficant ways?

Hi Tom,
The basic plan is to trade value - buy the dips and sell the rips - as defined by trend channels, be they up, down or sideways. The demo trading has reinforced the need for patience and discipline which have always been something of a bugbear for me. As is often the case, they aren't really a feature of demo trading. Letting the trade come to me and resisting the temptation to either jump in early or, conversely, to chase a trade after the horse has bolted - are the main issues for me. However, identifying the problem and knowing what one needs to do is only half the battle; putting theory into practice trading a live account is what counts!
Tim.