What was I thinking?

[bonsai]

One thought on paper trading.

Why not line up a friend. And every time you want to trade
give him a call and give him the details.
I am suggesting that this approach will put some of the tension
into the situation which is otherwise lacking ?

Alternatively, just start a thread here and post those trades
and see how it goes ?

 

[barjon]

Bonsai

Lining up an enemy might increase the voltage!!!

jon

 

[Skimbleshanks]

A halfway house between paper trading and the real thing could be use of a real-time simulator.

OK, everyone changes when they trade for real, having traded successfully on paper. So, perhaps it would be good to write down exactly what you do that's different so that you are at least aware of them!

My biggie is impatience, which I don't have paper trading but I do when trading for real. So I solved that by having something else to do - reading, knitting, combing the dog, playing cards, entering the caption competition on these boards, anything to keep me amused so that I am not continually watching the screen.

 

[kinglatfan]

That good old maxim "plan your trade and trade your plan" gets a good few mentions on this thread and rightly so.

There has also been a lesser reference to business planning for trading: not the plan in your head but rather the plan you have carefully put down on paper and pinned on the wall above your trading screen!

What have you got under the heading damage limitation?

I have a three strikes and your out system with my maximum stop loss on any one trade being x, ergo making my maximum trading loss on any one day 3x whereas on a good day profit could be x unlimited.

I am reviewing the plan so that if I ever stop myself out because of losing trades I only allow myself back in after I have paper traded a profit over three paper trades.

I constantly revisit the plan and make changes which I would hope reflect my greater trading experience.

I always try to keep my trading simple and avoid as many flashing gizmos on the screen as possible. I prefer to watch observe and count when I am live in a trade rather than have to think. I am happiest thinking about and planning trades outside market hours

If I do find myself worrying and or thinking during a live trade then perhaps I should amend my trading plan so that I close the position down immediately.

Trailing automatic stop losses are a great help as they take away the strain. The only problem with this is that you telegraph your position to the market. I prefer to have a long stop stop loss a few points below what i am prepared to take as I am always fearful of the damn computer crashing. If a trade turns against me provided I am on line I simply pull the plug a few ticks above the long stop.

If a trade goes against me from the off then I take the stop loss and play three strikes and you are out. I have learnt the hard way never to move an initial stop away from the direction of the trade.

Believe you me life is a lot easier when you can hit the sell button without hesitation. So what if you get whipsawed you can always re enter.

If you buy at $10.10 looking for a minimum of say $10.30 and get stopped out at $10.00 you can always get back in if it rises to say $10.12 as if it is to get to $10.30+ it has to go through these levels anyway. if on the other hand it goes from $10.00 to say £9.75 whilst you are still thinking then boy do you have problems!

 

[oatman]

Skim, do you play cards with the dog?

 

[Newtron Bomb]

Skim,

I'm assuming your distraction techniques are to stop you tinkering with the trade once you have made your plan. I tend to go for a walk around the farm if the circumstances allow (and the weather)
This also provides a solution to a variety of trading habits like over analysis. I tend to analise a market that i dont trade so i can get the tinkering satisfied if am not able to walk away from the screen.

Kinglatfan
lots of good points, it is surprising that all the sage advice of good money management can prevent a lot of serious heart ache.
I suppose a lack of this can also be attributed to not heading good advice in adulthood as we do when we are a child.


re paper trading - I think fins 1 pence per point is an excellent way to start you have the ability to trade real time real money and not loose your shirt, its just a shame that they have introduced a limited period for this low bet size, even after this period 50p isnt exactly going to break the bank

 

[rglenn]

50p can certainly break the bank if you don't know what you are doing!

When I first started I was using 50p stakes and all my bank disappeared before I knew what was happening.

So beginners beware!!

 

[Skimbleshanks]

Newtron Bomb - my impatience has more to do with the current market, and it's a seasonal thing. The market is quieter during the summer, the swings don't have as much gusto, the bars are shorter, etc. So I am always more impatient in the summer than in the winter

In the summer the market seems to take twice as long to get to where she's going, so it is a good time for multi-tasking. Now there's sommat us girls excel at! :cheesy:

 

[rossored]

Sorry I must just ask about this and temporarily drag this thread off it's track...

Skim, could you say why you feel the market is quieter during the summer months? Several other people have mentioned this before to me, but as I'm still in my first full year of trading I haven't anything to look back on to compare. Is there a reason behind it or is it just "one of those things"?

 

[sidinuk]

Skim, was last summer a bit odd then? Last July/August the markets were going bonkers with the dow moving 500 pts in a day quite regularly.

Tim

 

[Skimbleshanks]

Sid:
Yes. Last July was exceptional. I look back on it with great fondness, and a longing for those sorts of days again.

Rosso:
The traditional saying is: Go away in May, and don't come back until St Leger Day.

St Leger Day is mid-September. The thinking behind the saying is that the best money is to be made from end September to May, and you might as well take the rest of the summer off!

I can't remember where I saw it, but someone somewhere posted a chart about the market's intraday volatility - and it has been a very noticeable drop from the lovely volatility we had during the winter, and then the doldrums from then on. The Iraq affair, IMO, started the doldrums earlier than usual, as nervousness just kept the punters away.

An easy way of looking at volatility is to look at the length of the bars. On a daily bar, a long one suggests volatility, and a short one suggests sideways action. April, May, June, and July have virtually had short bars, and although the overall direction is up, it has been a choppy ride.

A rough guide - it has taken us 3½ months to travel 1,500 points on the Dow. In October it took 6 weeks to do the same distance.