Today is decision day and its going to be hard. But the first rule of investing is that you must, above all, protect your capital. If you fail to do that you have no chance of re-entering the game. Take your losses and wait for better times.
Wednesday 18 April 2012
Those damned bulls
Today is decision day and its going to be hard. But the first rule of investing is that you must, above all, protect your capital. If you fail to do that you have no chance of re-entering the game. Take your losses and wait for better times.
Subscribe to:
Post Comments (Atom)
3 comments:
Hello Paul
I appreciate your online diary; it is always helpful when traders talk sincerely what they are doing and why - markets are after all fundamentally about human behaviour. One question though, why do you not trade cfd's instead of using ETF's?
Hi Andrew
Glad you are finding my diary interesting.
I have managed to place all of my capital inside tax shelters (ISA and SIPP) and therefore my capital gains are protected. Cfds are taxable and therefore I prefer not to use them. I could work with spread bets but they share the other problem with cfds: they involve trading on margin. I prefer not to have to deal with the extra level of money management involved.
I am currently attempting to find a way of picking stocks that offer a shorting opportunity. If I do I shall use spread betting to do this. But I need to be confident that the risk will be manageable. And I will commit very small amounts until I gain confidence.
Hope that helps. Do you do Cfds? Do you have any success with them?
P
Hi Paul. I trade very small size (an early bout of confidence where I made consistent profits led to a completely disastrous day which has, I believe left quite a weal!) I understood then that the learning curve is long and steep, especially without a professional mentor, and what was most important was to keep my capital, the tools of the trade, so tax for now, isn't an issue, but I understand what you mean by money management issues and margin.
My entry into trading began about 3 years ago. I'd made some sizeable bets through etf's on gold, silver and oil in late 2008/early2009 and, puzzled by minute by minute fluctuations of £00's in my portfolio, peculiar reactions or non-reactions to news, and endless contrary opinions from experts and commentators I somehow found my way to charts and the real world of trading. It was one of those eureka moments. For various reasons I ended up deciding to focus almost exclusively on short term £/$ fx, and since the broker provides cfd's I occasionally trade the UK100cfd. I start generally around 7am and finish around 10am, which is enough screen time.
Having made a good sum on my etf trades (needless to say I cashed them in way too early) I have gone through a series of swings, losing a lot, making some, getting confident, losing again getting confident etc etc. It has basically been from a technical and strategical standpoint a process of simplification to the plain charts I now use. The psychological element is the most challenging and most fascinating. I make money when I make "good" trades, but suffer from bouts of revenge trading, hesitation and doubts, which along with taking profits way too early results in never actually making up moves on my equity curve! That said I've gone basically from losing a lot, to losing less, and less, and now I'm mainly flat. There is no business quite like it, and it amazes me now how little I understood about the financial markets before, despite having bought and sold shares for several years as a hobby interest.
Your short bet looks okay to me. Another attempt at the triple top seems less likely today - but anything can happen!. My question on that trade would be where do you get out. The market might have decided to head down to lows of summer 2010/2011 or lower?
Post a Comment