Baldwin Blows Out?

Discussion in 'Financial Futures' started by nitro, Jun 22, 2005.

  1. MTBelly

    MTBelly

    Yes I traded stocks. Being native to the UK I have the option of trading stocks via a CFD (Contracts for Difference), an instrument that mirrors the actual market and allows margins on stocks of between 10% and 25%. The stocks I traded all fell into the 25% category, thus signifying greater risk.
    Very abbreviated version:

    Having determined that natural resources were the place to be I followed several stocks in those sectors before opening positions in two of them. One did nothing whilst the other exploded, rising 300% in 6 weeks! During that 6 week period I compounded an initial 5000 share purchase up to 20000 shares and then again 4 months later to 40000 shares. The compounding was exaggerated by the 4:1 margin that I had. Once it settled above a particular number I moved my stops within 20% and just sat on my hands for many months.....boring!

    I traded several other stocks during that time with 'very' modest gains.

    In February this year I added an additional 20000 shares which resulted in me having a final position of 60000 shares and absolutely no spare cash. I appreciate how stupid it was to have 'all my eggs in one basket' but thought I would just 'go for it'.
    It went well for the next month with the shares gaining 25%, equating to a 100% gain on my capital. It was at this point that my account held the most money.

    The week following my highest point the shares started to gradually weaken before eventually collapsing completely.

    During the year I made many mistakes but 'rode them out' and got lucky. The mistakes that eventually wiped me out were classic's and blatantly obvious to me but I still allowed them to happen.
    The first was not moving my stops up and locking in my profits after the last 25% gain and the second, which hurt more, was
    listening to somebody else and ignoring my own opinion. This came about by a chance meeting with a 'market professional' who told me that the share price would move much higher, I 'argued' that it had run its course. I don't know any market
    professionals as I come from a building background so I allowed myself to be affected (infected) by his 'superior knowledge' and did not follow my own advice.

    Having examined this debacle in some detail it's probably worth pointing out that if I had removed my original stops completely, which I seriously considered, I would now be sitting on a $220000 debt with no means of paying it.....not all bad then!

    One obvious defect in my character that I think is worth considering; my mistakes were all classics, things we've read a
    thousand times, but I still allowed them to happen. (Discipline)

    This really is an abridged version of events, missing many psychological and technical details, but my current 'foggy brain'
    doesn't possess the energy to elaborate.

    Thanks for the kind words.

    As you I intend to take some time off to clear my head and just 'lurk' around the bulletin boards. Hopefully I can muster up some passion again, until then it's back to building (construction) to raise a stake.

    Rgds.
     
    #71     Jul 5, 2005