Hi, After ten years or so of reasonably success trading shares (average 15% gain p/a) it seems I've decided to flush my money down the futures drain. I'd been placing small (couple hundred $) bets using a CFD account that let me trade mini's (ES and Gold) for the last couple of years and was up on those too. Then, when gold hit $1900 I went long and rode it (or it rode me?) down to $1700 before I gave up and let my stop get hit. Then reasonable success buying out of the money calls as the gold price drifted up (using the options to limit exposure to wild swings). Then this week I go full retard again, buying 1.5 minis at 1790, getting stopped at 1760, buying again at 1762, getting stopped at 1739, buying again yesterday at 1760 and losing my nerve, selling at 1762 only to see the price close for the week at 1790 odd again. I am the idiot that buys at the top and sells at the bottom. Almost $20k down in three months. Now I know that the easy answer is to stop. Walk away. Spend my money on something more fun. F*ck that. I want to learn. Can anyone suggest where to start my education. Looking primarily for a couple of good books. My intention is to identify a trend (gold rising) and then follow it, buying the dips and selling the peaks. Thanks.
Your intention is perhaps naive or misguided..hmm There aren't any books that will teach you to trade in themselves. It takes years of work. Perhaps even there is no such thing as "learning to trade" but rather trading is the result of learning to identify various opportunities. Perhaps this explains myself why I don't feel as I've learned "how to trade" because again there is no such thing as "learning to trade" there is merely learning how to execute on a certain operation basis that produces the results of trades and profits. It sounds that you might best be served by using a trading system. You could use such a trading system to help frame your ideas and approach the market using "systematic" approach. For example, when you get bullish on something then instead of just buying it then you might consult your system or use it to identify opportunities. This would be the fastest way to get you to a more professional level. However, it is not so easy and you still have to find a worthwhile system.. difficult to do. To really develop your own systems and the ability to identify opportunities requires a whole different level of commitment.
It seems to me that you are arriving too late to the party. Either wait for the current trend to end, and then take a position the other way, or if the current trend is very strong, wait for a decent pullback and the resumption of the trend, and then take a position with the trend. What methodology have you been using the past 10 yrs?
Do not spend much money, at least initially. reading is a good idea. http://seekingalpha.com/article/306213-germany-refuses-to-sell-gold-you-should-do-the-same http://seekingalpha.com/article/289810-gold-and-silver-a-simple-tool-all-investors-should-use Good luck! Nigam
You have no edge, no trade management, no risk management, no trading plan, nothing. You are revenge trading hard core and refuse to take a stop until you are already in extreme pain. It takes years to learn how to trade. You have not even started.
And exactly what the fuck possessed you to try to "learn" on a market with that kind of vol and daily trading range ?
The original post did not contain the information that is required for any useful response. You seem to be focusing on where you entered and when you got out. There isn't any mention of the reasons you took those trades - your strategy, which is what you should focus on - executing your strategy, and not worrying about the profit/loss, which if your strategy is good enough, will take care of itself. People can thoughtfully comment on your strategy, but they can't usefully comment on a journal or a series of trades. So, whatever your strategy is, it isn't working well. You will need to add something to it to keep you out of the bad losers...common sense. See? Not very helpful.
Many thanks to everyone for the replies. Having come across this forum a few weeks ago and familiarised myself with the quality and directness of the readership I was not in any way expecting a sugar-coated response. In many ways that post, my first, was a confessional. In response; QUOTE]Quote from Lucias: It sounds that you might best be served by using a trading system. You could use such a trading system to help frame your ideas and approach the market using "systematic" approach. For example, when you get bullish on something then instead of just buying it then you might consult your system or use it to identify opportunities. [/QUOTE] Agreed. To date my investment strategy has been led by fundamentals and not tech/a. Perhaps the longer timeframes involved (for me 6 months to 5 years) have meant that poor emotional decisions have been smoothed out over time. Clearly dealing futures over much shorter time frames means that your emotions will kill you dead. Fast. Concentrating mainly on small cap Australian explorers and miners I seek to identify companies that are sitting on significantly undervalued resources. Buy, hold, sell. Re-evaluate after a significant change (newsflow, SP etc). I also like to keep an eye on global macro conditions. e.g. The Monday after Fukushima I sold a small cap uranium miner that subsequently dropped 50% and bought a maker of gas powered fuel cells (rose 5% over 6 months). Thank you. You are of course spot on. I think "revenge trading" just about sums it up. At the start of the year I took control of my pension (called a self managed super fund here in Aus). It wasn't that much as I had only been paying in for 4 years. After seeing the balance drop every quarter bar one I'd had enough. I spent the lot on gold and silver physical bullion, securely vaulted. That was enough to give me a touch of 'gold bug fever'. And it didn't take this fool very long to figure that what worked for me with the physical would work with futures with my return magically multiplied by 100. A very expensive lesson learned. I assure you, I am the genuine article...... Actually yes, very helpful. As anyone reading this will have realised my strategy was/is close to non-existent. I just needed to be told and again I thank you all for that. And you have also told me how to properly form my line of enquiry in the future which will be invaluable. As to why I am not sticking with my old 'strategy' (in inverted commas as I am rapidly learning that it was far from what would qualify as strategy on this forum), it is because the returns of the last few years have completely dried up. This makes me think that the 'strategy' is only workable in years when the economy is expanding and I wanted to diversify into an area where the direction of the economy is not the deciding factor in one's returns. Whether I can identify a strategy that suits me, whether I can master my emotions (or at least use a system where they have less of a chance of making an impact) and whether I can make a return remains to be seen. I am sure most of you would seriously doubt if that will happen and the statistics would seem to bear you out. I will be beating a retreat to paper trades, research and reading for some time to come.