Journey into the systematic and controlled...

Discussion in 'Journals' started by mEmmerrr, Dec 14, 2008.

  1. mEmmerrr



    I want to start a journal to get my spread betting career back on track.

    Quick history: Am 19 at uni, and through my readings have got really interested in the markets. However obviously, making money is the ultimate objective and the motivator to read more, more screen hours etc. This isnt gambling with my student loan or anything, I am in a nice position as a student but want to keep adding to my funds through the uni year, not just the summer, but am not in a positon where I can day trade so minimal intraday tweaking is needed.

    I read up loads about technical analysis, had a quick play with paper trades but was a complete waste of time as I didnt take it at all seriously, and proceded to jump in for £750.

    Now that was a couple months ago, and today said account is at £771. However this could be down to a couple of .... yes ill say it..... lucky trades and overall my trades have not been good.

    My problem was that I had no apparent setup or control, was just browsing through the FTSE stocks, using some of what I had read about technical analysis and just go for it.

    Bit of news and market opens miles lower? Well why not go short because its lower right? Needless to say that didnt work out.

    Recently this has been rectified to an extent, I am making more thought out plays and worked my way out of a hole but this last week has sparked my need to take things to the next level.

    My problems as it stands:
    - Getting overconfident from a win and trading for the sake of it, chasing the money.
    - Stops are not tight enough and lose too much
    - Not getting in at the right price and exiting trades far too early just when I think I have made enough money.
    - Getting super monkey tilt from losing and entering ridiculous intra day trades from my 'live' spread betting website data trying to win it back.

    So, what is this journal going to do?

    Set out clear goals and stick to them. Period.
    List every trade and why I am doing it, to stop me from delving onto the website and entering stupid day trading things that lose me money.

    And from this hopefully set out on a journey of success!

    Will be back later to set out aims, and any potential setups for monday that I like the look of.

    Of course, am looking for as much constructive criticism as possible and any advice on my trades to come.

    Big up
  2. you will only change once the pain of significant losses starts changing your character.

    making money with your first trade is the biggest mistake you can do.

    you need serious discipline that can take some years to develop to adjust for the market. others are born with the right qualities. but I'm sure anyone can with the right attitude.

    above all you need love. without love for what you do you're bound to be beaten by the stress, fear, uncertainty that this industry brings.

    you also needs to be wise to step out of the market at times no matter how good your strategy. never think you got it all sorted. market is like a game opponent that cheats and doesn't play by the rules.

    and if you have time short the FTSE in my name once the futures open tonight.

  3. mEmmerrr


    Right, here goes.

    Aims: Turn over £75 per week consistently. This represents 10% of my original buy in and should be a very achievable target. However in the past I have tended to sit out once my target has been reached which is not the best strategy, maybe just tighten up my trading requirements.

    This will achieved by short term positions in the region of 1-3 days, really trying not to get out before the end of the first day and using END OF DAY DATA TO DECIDE EXITS.

    Now when it comes to set ups this is not 100% structured.

    I am not looking for 1 particual things, ie a short term pullback from a strong trend, but looking over the same stocks (ftse100) and looking for a variety of setups revolving around the following:

    I have experimented with various indicators and in general have found them to not provide good signals. I have read about various peoples experiences and am liking a combination of principally price action, with the addition of a slow stochastics. From looking back over time this appears to have been accurate with regards to trends and reasonably prompt, and IMO a useful indicator. Support and resistance and trendlines appear to be the most powerful tools going, and are the most interesting to read into instead of simply buying when some lines cross.
    I also have a EMA to show general trends, and potentially contribute to a decision.

    In terms of the indicators I am using, EMA is set to be 10 periods and the slow stoch is set to 5,3,3.


    I quite like the shorter than the norm (14) stoch as it gives more signals, and more in my predicted time frame. 10 EMA was a bit random, just seemed a short-ish round number.

    Right, onto this week.

    Firstly, after reading some other thread and my own thoughts I am going to be looking to go almost solely short this week.


    This is using a longer stoch and is still grossly overbought, and at the top of its channel. Not sure why there is no volume on that graph, but from reading the other forum and looking at some of the major stocks, I can assume that the latest rallies are on lower volume.

    The trade I like the look of the best is Anglo American :

    Responded well from the open down due to the big 3 bailout failure, but still shorted of other days and failing to get near resistance. Stoch reading looking good, and the last 2 times this has happened in VERY similar positions has fallen.

    Not sure what sort of numbers to look at for entry/stops? One problem I have come across due to my small buy in is that setting suitable stops would use a large % of my buy in, and in general I am trying to keep that around 2% (£15) which does not go far with a stock worth 1400.

    Equally appealing and more easily priced is kingfisher:
    This is very similar to AMEC, similar crosses did produce a fall and failed to break resistance last friday on quite bullish days, but less volume then the rest of the week.


    Was thinking an entry of the a break in the 10 EMA and stop just above fridays close?

    The last stock I have eyed is Carnival, and a slightly differeent setup. Already seems to be on the way down, has not rallied in a similar way to over stock on friday and two interesting candles, I am not sure what to make of this.
    I am aware of the failed stoch crossing at a similar level a couple of weeks ago, but this stock looks VERY weak.


    No idea as to potential entries/exits.

    Right, thats it.

    Any thoughts? Entries / exits? Sound analysis?

    Big up
  4. mEmmerrr


    Sold kingfisher @ 134.6 with stop at 140 for 2 / pip.

    Really annoyed about BHP Billiton trade, missed, had the point where I wanted to sell from pretty sorted but thought I would wait and see as it wasnt quite at previous highs, came back from breakfast to discover it had fallen 40 points. Gash!

    Will try to get in on BHP / amec if the opportunity presents itself later in the day.

    - Got a bounce from the BHP down trend, in at 1213.4 tight stop at 1221.0.
  5. mEmmerrr


    Quite a gash day really :mad:

    Thought I had this one dialled but the miners climbed. This a problem I seem to come across, I decide which way I think it will go and I dont really know how to use the pricing to conform that before getting my money in. To get the best price and be able to deal with potential volatility better I need to get in at the start of the trend, and this can leave me with a loss a reasonable amount of time.


    I lost a total of roughly £21 entering into my billiton trade over 3 trades, which is a postive because my stops are more accuratly sized and when looking back on the day I didnt get stopped out of any good trades;I just have an issue with knowing when to give up for the day I guess. It fell early, which I missed and tried to get back in when it bounced from its fall.
    It soon rallied up to the days high, from where it started topping again -> cue entry with tight stop above days high.

    When it has dropped, and reclimbed but appears to be a top again is this more often than not a quick pause in an uptrend?

    Kingfisher retested and failed to break highs and Im still in, see what happens.

  6. mEmmerrr


    So frustrating, BHP billiton dropped by the best part of 50 points this morning which is the trade I knew it was going to do, but priced in straight away by opening lower and then I have no clue what it is going to do through the rest of the day / week.

    Staying out and waiting to see the fed interest rate cut, and see what happens.

    Very bad week for my confidence so far though, my reads on where I thought it was going didnt go as planned.
  7. I would like to do spreadbetting using FTSE cash at 0.50p per point. I can gradually increase it to £1 or £2 as I practice more. Would any spreadbetting firm allow me to do this?

  8. mEmmerrr


    AFAIK no firm allows £0.5 / pip.

    But I may be wrong, and if so I would like to open an account there!

    I am severly underrolled to trade some of the most lively stocks, anything over 1000 means I get stopped out really easily.
  9. Somebody else has told me that ODL allows £0.50 per point on FTSE and spread is only one point. I will try to check it out.
  10. mEmmerrr


    Had some fairly fundamental changes in mindset today, as I was sitting here searching for a trade, and getting short on some random FTSE250 stock and losing a fiver when really I had no reasoning.

    My expectations are way out of proportion.

    I think its hard when reading about everyone else killing it every day, but I have to remember that this ISNT MY JOB, and a bit of fun/learning experience whilst at university and hopefully make some money, but I am not REQUIRED to make money to buy food etc.
    This pursuit of daily turnover ironically has the opposite effect and is losing me money, leaving me worse of than I had spent all day in bed!

    I also thought about how I had been trying to short into a market that has been refusing to retest lows for the last few weeks, and there is a lot of bullish temperament.


    From now I will focus on A) trading with the trend and B) on taking fewer trades and making them count. ie 1 or 2 a week, and take it from there.

    Here goes....
    #10     Dec 16, 2008