Is it luck or am I doing something right?

murray t turtle · Aug 4, 2019

Fad said:
I have started using a practice account with £5k starting capital. I am by no means an expert in trading, in fact, I'm a complete noob but I have always been drawn to it for some unknown reason because as I have learned, it's an adrenaline inducing hobby to have. Anyway, I decided to just do what came naturally to me, which was dipping in and out of markets making small profits here and there. After realising that this was working for me I decided to do some research and discovered that what I was doing is known as scalping? OR is it? (if someone could clarify that first question that would be great). Now I will get to my main question, hopefully some of you have stayed with my ramblings. I started with this 5k as mentioned above and turned it into 25k in a day, all my trades were made on the DAX, DOW and FTSE, is that realistic? the app I'm using tells me that had I been using a real money account, the profits would have been the same, obviously taking away the fees that come with a real money account. Basically, what I want to know is, are my results realistic or at least if I'm making 20k in a day, could I expect to see reasonable/similar results with a real money account?

I thank anyone with advice on this matter in advance! You legend(s)!
More...

%%
Congrats on e trades.. /paper trades. NO sir, paper trading is not @ all like real trading/swing trading. NOR is monopoly money like a real ''REALTY'' deal, but every little bit helps...……………………..…………………………………………………………………………..Good question.

Fad · Aug 4, 2019

GrowleyMonster said:
Scalping in sim/demo is a trading style where the difference between sim or "paper" trading, and live trading, is probably greatest. With live trading, lots of things will eat you up when scalping. Order execution speed. Spread. Commissions. The human element. There are a lot of scalpers out there, yeah. Some make pretty good money. And on paper you are doing good, but that doesn't mean you would do good in live trading, at your present state of skill and training. Especially with a scalping strategy.

Swing trading is where the difference between paper and live trading can be fairly small. The human element is still there, of course. You will make discretionary decisions differently when you are trading with money you had to earn by the sweat of your brow, than with money that doesn't even exist and that you can replenish at will.

Trading can be fun. A bit of a thrill at a nice win, or a twinge of sadness or regret, maybe even anger, at a loss, are natural. The risk adds to the enjoyment. For me, anyway. The trick here is to not let these very natural emotions trigger bad play. Same as in Poker. When you go on a hard tilt, you are going to run out of money pretty quick. You need rules, and you need to follow them and not just wing it. You need to trade like a machine. When X and Y conditions are present, you order according to plan A or maybe B but never C and no freestyling just because you feel M or N will occur without any empirical basis for the prediction. You don't move your stops down to give a position some room. If you placed your stop correctly in the first place, then that is where you want to take your small loss rather than risk a larger one. You don't double down and try to win your money back. Every hand in Poker is a new hand. Every trade is a new trade. If you screwed up, the next play is a chance to get it right this time. Don't use the opportunity to make things worse. There are dozens of common mistakes made by weak players that are seen in both Poker and in trading.

Most important is to develop good risk and money management practices and stick to them rigidly. Live to play another day.

The best thing you can do at this point is buy a few books on the type of trading you want to do. You don't need a whole bookshelf of books on each type of trading you want to do. Most of them just parrot the same advice, and for a good reason. The tried and true methods and practices are proven to give you a fighting chance at making it. When you try to reinvent the wheel you either end up sticking with the wheel, or pushing a different geometrical shape that doesn't really work very well. Just grab the first 3 or 4 you see on an amazon search and you ought to be good to go. Practice what you learn. Immerse yourself in your paper trading, and really walk the walk, really imagine that the money you are betting is real money that you could use for things that you actually need or want, money that you had to bleed and sweat to earn.

As you read, here are some topics in no particular order, to watch for and to pay special attention to:

VWAP
Moving Averages (EMA and SMA) and MA crossovers
Support and Resistance
Volume/Price analysis
Bollinger Bands (my favorite indicator)
Risk management
Bull flag momentum strategy
Mean regression strategy
Trend analysis in multiple time frames
Volume, volume, volume. Without volume, price action means very little.
Candlestick analysis
Breakout strategies
Standard Deviation
Reversal and confirmation and when not to wait for confirmation.
Mob psychology and how to lead the mob instead of follow it.
Specialists and Market Makers and other deep insiders, and how they rig the game.
The good, the bad, and the ugly, of penny stocks
Volatility, how to find it and how to use it.
Gappers and why stocks gap, and how to play them.
Chasing the stock, and why it will destroy you if you do it.
Why price moves
How to use a scanner and create a watchlist
How to pick a broker and a platform that suits your needs
Trading psychology. Shrinking your OWN head.
<EDIT>High Frequency Trading and how it affects you
Float, Market Cap, and Liquidity
The Bid/Ask Spread, and how it will get you and where to make your entry
Order Types</EDIT>

TBH, a lot of the books you read will be written by guys who are better at authoring than trading. That's okay. The really good traders probably don't have much time for writing books, but like I said, the standard advice is going to get you off on the right foot. I suggest you don't spend your money on paid courses or webinars or forums or other for profit stuff. Just get a handful of books, and hang out on this, or any other free trading forums, and ask whatever questions your studies bring up and fail to answer.
More...

Thank you GrowleyMonster for taking the time to provide this info. Some of it doesn't mean very much to me at the moment but I'm sure as read, trade and learn along the way I can refer back to this and use it to my advantage. Much appreciated sir.

Overnight · Aug 4, 2019

Fad said:
Thank you GrowleyMonster for taking the time to provide this info. Some of it doesn't mean very much to me at the moment but I'm sure as read, trade and learn along the way I can refer back to this and use it to my advantage. Much appreciated sir.
More...

Then bookmark it.

LS1Z28 · Aug 4, 2019

Fad said:
Thanks for your response.

Still don't really understand your lingo. I was trading CFDs if that makes any difference to you at all?

Can't see how a $5k account would allow me to trade $1.5m worth.
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https://www.ig.com/uk/spread-betting-cfds-margin
Check out this link. It explains the margin requirements for trading CFD's in the UK. This specific broker requires 5% margin on index funds for retail traders. So if you had a $5K account, you would only be able to purchase $100K worth of contracts at a time. You would be limited to purchasing 3 US30 contracts at a time instead of 260. So your profits would be significantly smaller.

I'm not familiar with margin requirements outside of the U.S. Other brokers may provide higher leverage.

Fad · Aug 4, 2019

LS1Z28 said:
https://www.ig.com/uk/spread-betting-cfds-margin
Check out this link. It explains the margin requirements for trading CFD's in the UK. This specific broker requires 5% margin on index funds for retail traders. So if you had a $5K account, you would only be able to purchase $100K worth of contracts at a time. You would be limited to purchasing 3 US30 contracts at a time instead of 260. So your profits would be significantly smaller.

I'm not familiar with margin requirements outside of the U.S. Other brokers may provide higher leverage.
More...

You've been too kind. Thank you.

jl1575 · Aug 4, 2019

Fad said:
Thanks for your response.

Still don't really understand your lingo. I was trading CFDs if that makes any difference to you at all?

Can't see how a $5k account would allow me to trade $1.5m worth.
More...

OK. CFD is completely different from E mini. So It makes sense that you can trade large size within your account.
Good trading!

padutrader · Aug 4, 2019

Fad said:
but I'm sure as read, trade and learn along the way
More...

I could tell you what to read....I read my first TA book in 1994......but started leveraged trading in 2004 and day trading in 2008.....
as far as day trading is concerned I just recently became profitable by using one strategy....a swing trading strategy … so it is the most difficult, at least for me, though there may be some who have found it easy
if you want to know please confirm....giving unsolicited advice here is acceptable but I do not want to make the effort .. unless requested
and I would request you to ignore any member, no matter how senior they are, who make personal comments about any other member.....personally I report them...as I have done with the member who says 'I have dementia'.
I wish you well : this is undoubtedly the most enjoyable of all activities as well as the most challenging.
early success is the most dangerous ; in my first month of trading-delivery based stock trading- I made 90% in one month with NO LEVERAGE.that is amazing achievement...only to lose for the next year

ironchef · Aug 4, 2019

Fad said:
If I were you I would not be tagging other users of this forum and saying you feel inadequate next to them. Perhaps you do but why allow anyone to know that? Perhaps they would feel inadequate next to you in other aspects of life.

I have learned from reading your posts on this forum just as much as the next user!

I don't intend on ever trading full time, I enjoy my current career too much and plan on making it to the top but if I can make trading a hobby that I'm good at, a couple of days a week will be good fun!
More...

I respect them, there is no shame in admitting I am not as good as they are and feel inadequate because it is true. Since I am not trading against them, and this is an anonymous forum, why not let them know?

Understanding reality and work within my circle of competency is key to my success.

padutrader · Aug 4, 2019

GrowleyMonster said:
Scalping in sim/demo is a trading style where the difference between sim or "paper" trading, and live trading, is probably greatest. With live trading, lots of things will eat you up when scalping. Order execution speed. Spread. Commissions. The human element. There are a lot of scalpers out there, yeah. Some make pretty good money. And on paper you are doing good, but that doesn't mean you would do good in live trading, at your present state of skill and training. Especially with a scalping strategy.

Swing trading is where the difference between paper and live trading can be fairly small. The human element is still there, of course. You will make discretionary decisions differently when you are trading with money you had to earn by the sweat of your brow, than with money that doesn't even exist and that you can replenish at will.

Trading can be fun. A bit of a thrill at a nice win, or a twinge of sadness or regret, maybe even anger, at a loss, are natural. The risk adds to the enjoyment. For me, anyway. The trick here is to not let these very natural emotions trigger bad play. Same as in Poker. When you go on a hard tilt, you are going to run out of money pretty quick. You need rules, and you need to follow them and not just wing it. You need to trade like a machine. When X and Y conditions are present, you order according to plan A or maybe B but never C and no freestyling just because you feel M or N will occur without any empirical basis for the prediction. You don't move your stops down to give a position some room. If you placed your stop correctly in the first place, then that is where you want to take your small loss rather than risk a larger one. You don't double down and try to win your money back. Every hand in Poker is a new hand. Every trade is a new trade. If you screwed up, the next play is a chance to get it right this time. Don't use the opportunity to make things worse. There are dozens of common mistakes made by weak players that are seen in both Poker and in trading.

Most important is to develop good risk and money management practices and stick to them rigidly. Live to play another day.

The best thing you can do at this point is buy a few books on the type of trading you want to do. You don't need a whole bookshelf of books on each type of trading you want to do. Most of them just parrot the same advice, and for a good reason. The tried and true methods and practices are proven to give you a fighting chance at making it. When you try to reinvent the wheel you either end up sticking with the wheel, or pushing a different geometrical shape that doesn't really work very well. Just grab the first 3 or 4 you see on an amazon search and you ought to be good to go. Practice what you learn. Immerse yourself in your paper trading, and really walk the walk, really imagine that the money you are betting is real money that you could use for things that you actually need or want, money that you had to bleed and sweat to earn.

As you read, here are some topics in no particular order, to watch for and to pay special attention to:

VWAP
Moving Averages (EMA and SMA) and MA crossovers
Support and Resistance
Volume/Price analysis
Bollinger Bands (my favorite indicator)
Risk management
Bull flag momentum strategy
Mean regression strategy
Trend analysis in multiple time frames
Volume, volume, volume. Without volume, price action means very little.
Candlestick analysis
Breakout strategies
Standard Deviation
Reversal and confirmation and when not to wait for confirmation.
Mob psychology and how to lead the mob instead of follow it.
Specialists and Market Makers and other deep insiders, and how they rig the game.
The good, the bad, and the ugly, of penny stocks
Volatility, how to find it and how to use it.
Gappers and why stocks gap, and how to play them.
Chasing the stock, and why it will destroy you if you do it.
Why price moves
How to use a scanner and create a watchlist
How to pick a broker and a platform that suits your needs
Trading psychology. Shrinking your OWN head.
<EDIT>High Frequency Trading and how it affects you
Float, Market Cap, and Liquidity
The Bid/Ask Spread, and how it will get you and where to make your entry
Order Types</EDIT>

TBH, a lot of the books you read will be written by guys who are better at authoring than trading. That's okay. The really good traders probably don't have much time for writing books, but like I said, the standard advice is going to get you off on the right foot. I suggest you don't spend your money on paid courses or webinars or forums or other for profit stuff. Just get a handful of books, and hang out on this, or any other free trading forums, and ask whatever questions your studies bring up and fail to answer.
More...

the only thing wrong with this...... is the forum name 'growly monster'......pretty friendly 'monster' would be about right

Fad · Aug 5, 2019

padutrader said:
I could tell you what to read....I read my first TA book in 1994......but started leveraged trading in 2004 and day trading in 2008.....
as far as day trading is concerned I just recently became profitable by using one strategy....a swing trading strategy … so it is the most difficult, at least for me, though there may be some who have found it easy
if you want to know please confirm....giving unsolicited advice here is acceptable but I do not want to make the effort .. unless requested
and I would request you to ignore any member, no matter how senior they are, who make personal comments about any other member.....personally I report them...as I have done with the member who says 'I have dementia'.
I wish you well : this is undoubtedly the most enjoyable of all activities as well as the most challenging.
early success is the most dangerous ; in my first month of trading-delivery based stock trading- I made 90% in one month with NO LEVERAGE.that is amazing achievement...only to lose for the next year
More...

Thanks Padutrader.

As a seafarer I'm currently at sea and only trying to get a feel for the industry at the moment. When I'm back on dry land then the real hard work will begin and you'll probably find that I become more active on this forum including asking experienced traders like yourself more questions relative to my trading styles.

I've used message boards for all sorts of different interests over the years. You've got to learn to roll with the punches. Or take as good as you give.

Cheers, Fad