Trading: Fact, Fiction, Truth and BS

[colinmorganq3]

Ok - so i am new to trading. I have a little past interest during a desk job, check some companies (brokers) online (this is sometime 2003/4/5), submit my details, get back user and password for a demo account, login and ... don't follow through, i forget about it and move on. Too complicated, not for me, i am too thick (despite two degrees in humanities) to understand. All those graphs and lines - you must be joking!

Few years later after moving to London i meet a guy in the gym, he deals penny shares, my ears prick-up (why?) i take a renewed interest, ask him to 'show me one day what it is all about', he shrugs my interest off. I tell myself i must find out but once more time petters on and i forget all about it.

Few more years go by (it is 2010) and i meet another friend who watches markets, talks about shares and forex, seems to have a lot of knowledge on the subject(s) and once again my ears prick-up. 'I have a friend', he says 'trades full-time, very secretive, doesn't talk much about it', he says enthusiastically, 'just need some capital, you know ... a lump sum!'

He was broke, i was broke - no chance there then! Anyway, this 'friend' turns out to be a complete nutcase (long story, life is definately stranger than fiction) and we part ways - however ... my ears, after pricking-up for the third time, stay pricked.

I go online, start reading about trading, buy books, start tinkering with brokers, platforms and settle for a demo account with a well-known broker. 'Let's focus on forex!', i tell myself. Specifically 4 pairs with an occasional dable with other pairs. Hang-on! Holy-**** I am making money! Can this really be true? 16k (started with 30k i lost a lot until i started looking closer and more carefully) all the way up to 100k and in a short space of time (roughly a month). Oh my god!! This is a miracle, i tell myself. My money worries are over!

Bullied all through school, i left with no qualifications, no confidence and no interest in a career, i just wanted to grow strong so i studied the martial arts with some great masters, became confident with high grades and in 93' after a detached retina realised something was missing from my life! So onto my second quest, education (that's right, the very thing denied me at school).

Night-school then university and two degress later - enlightenment! In the meantime, after a divorce, dozens of 'i don't know what i want to do with my life?' jobs, losing my two kids, my house and stranded in the worst financial situation ever, i manage to raise enough money to train as a bodyguard (yeah, from bullied to bodyguard). 'Oil and Arabs', i tell myself, 'Oil and Arabs!' Got to make money! Not out of greed, you understand, but because i had to, i needed to. Lots of Arabs and VIPs later, and after living in London since 2005 we fast forward to the present London 2011 and that 100k in a demo trading account. I am so excited i can hardly contain myself. I am getting up in the morning, in fact, jumping out of bed, checking the markets, listening to Bloomberg, placing trades, some scalping, some long. The trades i leave over night that go minus come good and i am quids in, profit, profit, profit. My prayers are answered. i must have a knack for this! I am beside myself with happiness. I won't end up on a park bench with the pigeons after all! A miracle, just a miracle. Then Boom! Too many open trades left overexposed and slam! 100k down to 22k. Shattered ... and this is only pretend trading! None the matter, i did it once i can start again with my new learned wisdom. Let's go straight in for a real account this time! With a spare 1k (truth is it was my brother's spare 1k) i decide to go live. It's not much and i know certainly not enough for a buffer but it is a start, i can test at least. And next we come to the moral of this longish story and the dilema ...

I am accepted for a real account (by this well-known broker), finally logon, and ... hang-on? What happend to the spreads? They were not this wide on the demo account? They were much narrower!

And so my trading dreams are shattered even before they have began. These brokers are cheats! They are scammers! Deceptive! i tell myself. And so, finally to my question for the experienced traders out there ...

How does this trading business really work?
Is there any light through the BS trading tunnel?
What broker can we trust? spread? slippage? etc.
Can you really make a living from trading?

Thanks for reading ... i am deciding which park to find my bench!
From a man desperate for an edge.

 

[Tenapenny]

There are successful traders and there are desperate traders but I've not come across a successful desperate trader. Maybe trading is just not for you. It doesn't suit some people.

 

[colinmorganq3]

There are successful traders and there are desperate traders but I've not come across a successful desperate trader. Maybe trading is just not for you. It doesn't suit some people.

Thanks Tenapenny maybe i will need to drop the 'desperate' then.

 

[Chartsy]

Read trading in the zone before starting again! been reading it this week.

 

[meanreversion]

How does this trading business really work?
Is there any light through the BS trading tunnel?
What broker can we trust? spread? slippage? etc.
Can you really make a living from trading?

Thanks for reading ... i am deciding which park to find my bench!
From a man desperate for an edge.

Wait a mo, there are two distinct issues here.

Finding a decent broker is easy, just open an account with Interactive Brokers or IG (if you wish to take the spreadbet route).

But your broker should not materially impact your results in the long run (if they do, you're overtrading).

So that's issue 1. Issue 2 - can you really make a living from trading? Not with £1k you won't. Not in a million years.

 

[JRP2891]

16k (started with 30k i lost a lot until i started looking closer and more carefully) all the way up to 100k and in a short space of time (roughly a month).

How does this trading business really work?
Is there any light through the BS trading tunnel?
What broker can we trust? spread? slippage? etc.
Can you really make a living from trading?

You were way over-leveraged (trading too much size) to be able to turn 16k into 100k in a month on demo. Most traders i know who practice sound risk management would bite your hand off for 5-10% (avg.) compounded returns per month.

Like Mean said, £1k isn't even close. You'd be better off using that £1k to try and teach yourself to break even on, then worry about getting a proper stake together, £20/30k absolute minimum if you're aiming for the higher end of return rates. N.B - Higher returns = larger drawdowns.

 

[meanreversion]

You were way over-leveraged (trading too much size) to be able to turn 16k into 100k in a month on demo. Most traders i know who practice sound risk management would bite your hand off for 5-10% (avg.) compounded returns per month.

Like Mean said, £1k isn't even close. You'd be better off using that £1k to try and teach yourself to break even on, then worry about getting a proper stake together, £20/30k absolute minimum if you're aiming for the higher end of return rates. N.B - Higher returns = larger drawdowns.

3% a month would do me just fine. The aim is to keep drawdown below 30%, preferably below 20%.

 

[Pi3141]

I think to learn how to trade for a living, firstly, you've got to be in a position to support yourself financially. I moved back to my parents house for a year after university so that I could trade without having to worry about making money to pay the rent, bills etc. You just don't want this kind of pressure whilst you're still on the learning curve.

 

[neil]

There are successful traders and there are desperate traders but I've not come across a successful desperate trader. Maybe trading is just not for you. It doesn't suit some people.

Yep - Colin should enter the real world and get a job. He will never hack it as a trader

 

[HAL 9000]

Hi,
pretty common story Colin,

How does this trading business really work?
Would you believe me if I told you?
What if I said the only way is to trade the weekly? round numbers? 1min scalps?
The real work is finding out how you can do it, and that seems to never end, and it's also the last thing anybody wants to hear.

Is there any light through the BS trading tunnel?
It seems a lot of people die in the tunnel, it's a f*ckin long tunnel. Without getting to limp wristed about it, you have to want to get to the light with a passion. Without a plan, without commitment, and without discipline, you're pretty much plankton. You're not even a little fish.

All the best.

 

[tdrtw]

>>... i am deciding which park to find my bench!

Below is a link to a video:

http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.html

 

[wackypete2]

3% a month would do me just fine. The aim is to keep drawdown below 30%, preferably below 20%.

Even 20% drawdown scares me. I'm very conservative. I like to keep my money

Peter

 

[HAL 9000]

Thanks for that tdrtw, interesting vid.

 

[brettus]

Ok - so i am new to trading. I have a little past interest during a desk job, check some companies (brokers) online (this is sometime 2003/4/5), submit my details, get back user and password for a demo account, login and ... don't follow through, i forget about it and move on. Too complicated, not for me, i am too thick (despite two degrees in humanities) to understand. All those graphs and lines - you must be joking!

Few years later after moving to London i meet a guy in the gym, he deals penny shares, my ears prick-up (why?) i take a renewed interest, ask him to 'show me one day what it is all about', he shrugs my interest off. I tell myself i must find out but once more time petters on and i forget all about it.

Few more years go by (it is 2010) and i meet another friend who watches markets, talks about shares and forex, seems to have a lot of knowledge on the subject(s) and once again my ears prick-up. 'I have a friend', he says 'trades full-time, very secretive, doesn't talk much about it', he says enthusiastically, 'just need some capital, you know ... a lump sum!'

He was broke, i was broke - no chance there then! Anyway, this 'friend' turns out to be a complete nutcase (long story, life is definately stranger than fiction) and we part ways - however ... my ears, after pricking-up for the third time, stay pricked.

I go online, start reading about trading, buy books, start tinkering with brokers, platforms and settle for a demo account with a well-known broker. 'Let's focus on forex!', i tell myself. Specifically 4 pairs with an occasional dable with other pairs. Hang-on! Holy-**** I am making money! Can this really be true? 16k (started with 30k i lost a lot until i started looking closer and more carefully) all the way up to 100k and in a short space of time (roughly a month). Oh my god!! This is a miracle, i tell myself. My money worries are over!

Bullied all through school, i left with no qualifications, no confidence and no interest in a career, i just wanted to grow strong so i studied the martial arts with some great masters, became confident with high grades and in 93' after a detached retina realised something was missing from my life! So onto my second quest, education (that's right, the very thing denied me at school).

Night-school then university and two degress later - enlightenment! In the meantime, after a divorce, dozens of 'i don't know what i want to do with my life?' jobs, losing my two kids, my house and stranded in the worst financial situation ever, i manage to raise enough money to train as a bodyguard (yeah, from bullied to bodyguard). 'Oil and Arabs', i tell myself, 'Oil and Arabs!' Got to make money! Not out of greed, you understand, but because i had to, i needed to. Lots of Arabs and VIPs later, and after living in London since 2005 we fast forward to the present London 2011 and that 100k in a demo trading account. I am so excited i can hardly contain myself. I am getting up in the morning, in fact, jumping out of bed, checking the markets, listening to Bloomberg, placing trades, some scalping, some long. The trades i leave over night that go minus come good and i am quids in, profit, profit, profit. My prayers are answered. i must have a knack for this! I am beside myself with happiness. I won't end up on a park bench with the pigeons after all! A miracle, just a miracle. Then Boom! Too many open trades left overexposed and slam! 100k down to 22k. Shattered ... and this is only pretend trading! None the matter, i did it once i can start again with my new learned wisdom. Let's go straight in for a real account this time! With a spare 1k (truth is it was my brother's spare 1k) i decide to go live. It's not much and i know certainly not enough for a buffer but it is a start, i can test at least. And next we come to the moral of this longish story and the dilema ...

I am accepted for a real account (by this well-known broker), finally logon, and ... hang-on? What happend to the spreads? They were not this wide on the demo account? They were much narrower!

And so my trading dreams are shattered even before they have began. These brokers are cheats! They are scammers! Deceptive! i tell myself. And so, finally to my question for the experienced traders out there ...

How does this trading business really work?
Is there any light through the BS trading tunnel?
What broker can we trust? spread? slippage? etc.
Can you really make a living from trading?

Thanks for reading ... i am deciding which park to find my bench!
From a man desperate for an edge.

Let me be honest with you. From my perspective.

1. You've read a bunch of a books on trading.
I doubt you read a single book. Reasons below..
2. You trade recklessly on a demo account. (ok its just a demo account)
Every trading book talks about money management at some point, yet you trade recklessly. Making 16k into 100k in a month isn't good. Don't convince yourself it is.
3. You get excited that you're making money so fast.
It's just a demo account, you need to control your emotions.
4. Trading money that you can't afford to lose.
Need i say more about this. Don't ever trade money you can't afford to lose. Psychologically you are screwed. You will fail. Don't try to prove me wrong.
5. On a positive note. You understand that spreads are key to your survival.

My view on this as a whole. Don't trade ever. Don't try and prove me wrong. If you want i can hold that 1k for you and give you it back in a months time when you have forgot about trading. It's not for you.

 

[traderman1]

Issue 2 - can you really make a living from trading? Not with £1k you won't. Not in a million years.

In case the Original Poster didn't see this gem of advice, I will also repeat it
can you really make a living from trading? Not with £1k you won't. Not in a million years.

 

[nunrgguy]

In case the Original Poster didn't see this gem of advice, I will also repeat it
can you really make a living from trading? Not with £1k you won't. Not in a million years.

£1k is not going to provide a living, don't even try.
Initially it's enough to start with and attempt to compound up but it's going to take a damn good while.

1. You will need a job (ideally one where you will be able to enter a position when the boss isn't looking. Why? because even though I espouse trading longer term I don't espouse entering EOD with huge stops)

4. Stay away from day trading and scalping

6. Trade demo as if you are trading live, otherwise you're wasting your time.

3. Do not put your whole pot in a live account. You will blow it.

2. Trade live with TINY TINY TINY amounts (you can't do this spread betting btw - if it's Forex will have to look at Oanda etc and trade pennies on the pip) until you know you can do it.The money has to mean NOTHING to you but you have to treat the trade as if it means SOMETHING to you.

9. Learn about money management and position management. Learn about risking very little (initially) and upping your size with the market's money.

12. Learn psychology, extrapolate your own fears to other people etc. If you were scared sh1tless at this point in time what would you do?

11. While trading books are OK for beginning you're going to get more mileage covering your books in printouts of charts, those things have to sing to you.

22. The greatest thing you can learn learn is patience. Trading is waiting and then more waiting. The longer you do nothing the more successful you will be.

9. Learning to count is also good.