What sort of trading vehicle should i use as i start? Background info provided...

[new_trader]

New Trader,

Here's a maths test. Which is greater:

0.25% on £5,000 or 1.5% on £1,000?

Which is heavier: An African Elephant or an Indian Elephant?

 

[krosfyah]

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Ive had a little thought on this huge !!!!! asking , looking back on it, and almost ignoring your post ive come up with this filter which might help you help yourself with a better start. Pursuing what i think is best. Apllies to all newcomers too I think.


Study the options 1,2,3 below.



1) A secuirty guard pulling a 12 hour stint content with redoing last years unsolved wordfind puzzles, and to lighten the dull shift, engages from time to time in trying to out manouver his own reflection on the inside of the security huts window ,lit by cheap overhead strip lights. Favoured vice- cigarettes & porn

2) A window salesman who thinks appearing in court on harassment charges is just a part of the job and acts as a reminder to himself that he's ,giving it all hes got. To get the sale. Favoured vice- cocoaine & sport f****ing

3) A 9-5 office worker who takes homemade sandwiches to work , and likes to occassionally play a game of a squash in the same good conditioned (but now a little tight fitting) white shorts he had when he was 17. Favoured vice- pipe smoking & cross dressing


Now and its not a trick question or anything like that, out of the three options above, which is nearest fit to you.

O.k. myself for example I choose 1. but have been the other 2 If you can choose or identify with one of the three then I think you might save yourself a few years.



When/ if you let me know I will respond with what I think is the best route (area for you to focus on ) for you to take based on what number picked.




.

Hi Crap Buddhist, that's an interesting means to figure out the direction i should take but what the heck. I'm probably similar to #3 apart from the crossdressing.

 

[rwg24y]

Which is heavier: An African Elephant or an Indian Elephant?

Hi errr, It depends on how much the elephant has eaten,
Now , sorry and all that but if you start with a small amount ,say £500 pounds, which is a lot of money if you are giving it away, your stops will be closer to opening and therefore more liklely to be hit by a small movements, this also makes you doubt your self, and causes friction around the home.
THis is made worse when the bloody index hits your stop then rebounds to hit the target you were expecting.
so back to the question how much is an effective sum to begin with
cheers all


WE ALL DIE , JUST DONT DIE OF BOREDOM :cheesy:

 

[krosfyah]

Hi errr, It depends on how much the elephant has eaten,
Now , sorry and all that but if you start with a small amount ,say £500 pounds, which is a lot of money if you are giving it away, your stops will be closer to opening and therefore more liklely to be hit by a small movements, this also makes you doubt your self, and causes friction around the home.
THis is made worse when the bloody index hits your stop then rebounds to hit the target you were expecting.
so back to the question how much is an effective sum to begin with
cheers all


WE ALL DIE , JUST DONT DIE OF BOREDOM :cheesy:

If i open a trading account with £1000 and trade 1p/point, and then move up to 50p/point (which i can through Finspreads SB account), won't that go some way to prolong my "longevity" even if i hit a to-be-expected, losing streak initially?

Thanks all for the inputs so far, im loving the discussion.

 

[new_trader]

Hi errr, It depends on how much the elephant has eaten,
Now , sorry and all that but if you start with a small amount ,say £500 pounds, which is a lot of money if you are giving it away, your stops will be closer to opening and therefore more liklely to be hit by a small movements, this also makes you doubt your self, and causes friction around the home.
THis is made worse when the bloody index hits your stop then rebounds to hit the target you were expecting.
so back to the question how much is an effective sum to begin with
cheers all


WE ALL DIE , JUST DONT DIE OF BOREDOM :cheesy:

Let me explain it with an analogy:

Imagine you and your friend walk into Curry’s and you both see a shiny new HD 42” plasma TV that you both want to buy. You ask the salesman how much it costs and he types a few keystrokes on his computer and says to you, “For you it will be £500” then turns to your friend and says, “For you it will be “£100”. You ask him why he is charging you more for the TV and he replies, “I am not. You are both paying exactly the same amount, 20% of what you have in your bank account”. This wouldn’t be fair would it? In other words, you expect to get the same quantity of goods and services for your money as anyone else, £500 is £500 irrespective of the proportion of wealth it represents.

Let me explain it with a Hypothetical:

Now, take 2 people (A&B) of equal aptitude who wish to start trading. They are both told that they should only risk 1% of their capital when they begin, ie/ (Start small). So person A has saved up £5000 to put into his trading account whereas person B, who has saved for longer, has £50,000 to put into his trading account. They are both equally inexperienced. Would it be fair that Trader A only risks a max of £50/trade when Trader B risks £500/trade simply because he has more available to lose?

Now let me explain it with a real world example based on myself, no actors were used and no animals were harmed in this story.

Recently I saw a good opportunity to go long on a particular stock. I decided to do via my spread betting account. The stock was worth around £4.50 and I decide to bet £2/point. This gave me the equivalent of 200 shares and I had to put down a deposit factor of 10% of this value – 10% x (200 x £4.50) = £90. Now, I can easily afford £90 and I can easily afford to lose £90…but I don’t have £9000 in my account, nowhere near that amount!! No, to me, £90 is £90 and as long as I could afford it, I took the trade. It was a successful trade that returned nearly 100% of my initial risk of £90.

Another example: Last year I saw a good opportunity to go long on the FTSE. I did it with a CFD. This was a £2/point CFD that required a £400 deposit. I deposited £800 into the account even though I would cut my losses at a specific STOP level, which varied, but wouldn’t exceed my initial deposit. Again, this was a successful trade and I made 160% of my initial risk. If I followed the 1% rule on this trade it means I would have needed….£40,000 in my account!! Ridiculous!!

So what am I saying? The idea isn’t to have so much money in your account that it allows you to trade with stops so wide they won’t get hit as often because that is financial suicide! The idea is to improve your proficiency so that your trades show a profit almost from the time that you enter them. That is the one and only goal! Trades that get stopped by the market which then rebounds occur regularly. I can assure you, having the mindset that wider stops will prevent this from happening is financially disastrous.

I think Jesse Livermore summed it up perfectly with these two rules:

The highest profits are made in trades that show a profit right from the start.

No trading rules will deliver a profit 100 percent of the time.


I wanted to add one last thing that a very clever Engineer once said to me:

"An Engineer can do with 20p what any idiot can do with £1"

I suppose you can replace the word "Engineer" with "Trader" but I don't think an idiot would last very long in the markets.

 

[rwg24y]

If i open a trading account with £1000 and trade 1p/point, and then move up to 50p/point (which i can through Finspreads SB account), won't that go some way to prolong my "longevity" even if i hit a to-be-expected, losing streak initially?

Thanks all for the inputs so far, im loving the discussion.

Hi
thanks for that, is the 1p/point an new account offer thing that has a time limit like IG,
what I getting at is If you belive your system will work, and accept that the money you deposit is lost and gone(always belive the worst will happen) how much would you start with.

 

[rwg24y]

Let me explain it with an analogy:

Imagine you and your friend walk into Curry’s and you both see a shiny new HD 42” plasma TV that you both want to buy. You ask the salesman how much it costs and he types a few keystrokes on his computer and says to you, “For you it will be £500” then turns to your friend and says, “For you it will be “£100”. You ask him why he is charging you more for the TV and he replies, “I am not. You are both paying exactly the same amount, 20% of what you have in your bank account”. This wouldn’t be fair would it? In other words, you expect to get the same quantity of goods and services for your money as anyone else, £500 is £500 irrespective of the proportion of wealth it represents.

Let me explain it with a Hypothetical:

Now, take 2 people (A&B) of equal aptitude who wish to start trading. They are both told that they should only risk 1% of their capital when they begin, ie/ (Start small). So person A has saved up £5000 to put into his trading account whereas person B, who has saved for longer, has £50,000 to put into his trading account. They are both equally inexperienced. Would it be fair that Trader A only risks a max of £50/trade when Trader B risks £500/trade simply because he has more available to lose?

Now let me explain it with a real world example based on myself, no actors were used and no animals were harmed in this story.

Recently I saw a good opportunity to go long on a particular stock. I decided to do via my spread betting account. The stock was worth around £4.50 and I decide to bet £2/point. This gave me the equivalent of 200 shares and I had to put down a deposit factor of 10% of this value – 10% x (200 x £4.50) = £90. Now, I can easily afford £90 and I can easily afford to lose £90…but I don’t have £9000 in my account, nowhere near that amount!! No, to me, £90 is £90 and as long as I could afford it, I took the trade. It was a successful trade that returned nearly 100% of my initial risk of £90.

Another example: Last year I saw a good opportunity to go long on the FTSE. I did it with a CFD. This was a £2/point CFD that required a £400 deposit. I deposited £800 into the account even though I would cut my losses at a specific STOP level, which varied, but wouldn’t exceed my initial deposit. Again, this was a successful trade and I made 160% of my initial risk. If I followed the 1% rule on this trade it means I would have needed….£40,000 in my account!! Ridiculous!!

So what am I saying? The idea isn’t to have so much money in your account that it allows you to trade with stops so wide they won’t get hit as often because that is financial suicide! The idea is to improve your proficiency so that your trades show a profit almost from the time that you enter them. That is the one and only goal! Trades that get stopped by the market which then rebounds occur regularly. I can assure you, having the mindset that wider stops will prevent this from happening is financially disastrous.

I think Jesse Livermore summed it up perfectly with these two rules:

The highest profits are made in trades that show a profit right from the start.

No trading rules will deliver a profit 100 percent of the time.


I wanted to add one last thing that a very clever Engineer once said to me:

"An Engineer can do with 20p what any idiot can do with £1"

I suppose you can replace the word "Engineer" with "Trader" but I don't think an idiot would last very long in the markets.

Ok very good and clear,
but as for engineers etc a competant enthusiast can do better than an idiot and will not charge you as much as an engineer.