Greetings! Dear Visitor,
 |
My name is Andy and I first began investing in the stock market over 14 years ago while in graduate school. I had received a Christmas gift of money together with a book on investing from my parents. I read the book and used the money to purchase 3 shares of The Limited. After a few days the stock went from $32.00 to $36.00 and I was hooked! I've been actively trading stocks ever since!
The very first course I ever did was an options course in the LIFFE building when it was still in full use. I was bowled over by the buzz of the building, the traders in their jackets, the atmosphere, the vibrancy and energy. I knew that had I discovered this place at the beginning of my business life, then this was where I would have been at home. I just loved it. This sowed the seed of a future in futures.
"I'm resourceful, I'm creative, I'm young, unscrupulous, highly motivated, highly skilled. In essence what I'm saying is that society cannot afford to lose me. I'm an ASSET"
I discovered Etrade (then ESI) and a year or so later I did a series of ADVFN technical analysis and trading courses with the excellent Limspfield Chartist and Bullshare (courses founded and organised by the inestimable Anthonyjb). I found that technical analysis was a language that spoke clearly to me. Charts came alive and the dry stuff of share dealing was transformed. I discovered a whole new world of interesting people and a possible lifestyle that beckoned seductively.
I first actually traded Index futures daytrading at an ADVFN realtime training day. In that unreal environment I did very well and thought "This is the life for me". Visions of the Ferrari and the 45ft ketch loomed large. I opened my CMC cfd account and started daytrading from work. (I run my own business) And then the worst possible thing imaginable happened.....my first week was really successful. Like the coke addict, my first hit was sweet as could be. It was obvious to me that daytrading was really simple and re-inforced what I had felt when I was in the LIFFE building - why hadn't I discovered it 20 years earlier.
I discovered a private chatroom of futures and options traders and was allowed to join it - (thanks guys, you know who you are). I was made welcome and, very much the new dumb kid, I asked endless, endless questions (all of which I have seen repeated here and on etrade 1000 times) and all were answered patiently, kindly and with great humour. Wow, not only had I discovered something I really wanted to do more than anything else in the world, but I had found this fantastic private club, filled with these great guys (and sometimes a girl) in which to spend my time while doing it. And not only that, these guys were helping me too! What more could I possibly want...
Well, needless to say it all went pearshaped. My 3 hour course in technical analysis did not make me an expert and strangely, there was a bit more to daytrading than I thought. The secret of success, apparently so easy to come by for others, was proving a tad elusive for me. Revert to plan B.
Closed CMC account. Pulled up the drawbridge and retreated for the time being. Surely the solution was to become more technically proficient. So I read a lot more books, a LOT more books. Murphy, Edwards and Magee, Achelis, DiNapoli, Nison and Linton on Technical Analysis. Pring, Lefevre, Elder, Sperandeo, Bernstein, Dalton, Farley, Piper, Schwager, Tharp, Slater, Gough, Goldstein-Jackson, Douglas (the best). I went on more courses, weeks of them (Robert Newgrosh, ADVFN, RVTaylor, RobinT etc etc). I got better, faster, realtime charting software, opened a spreadbet account and paper traded for weeks. Results were superb. OK this was it. My technical analysis skills were as good as any city analyst now. My technique was tested and honed in the red hot furnace of paper trading with a spread better. I was ready. I opened an account with a US broker to trade real index contracts, none of this smalltime cfd or spreadbet stuff for me. I was big time!!! Guess what? I lost again. And what was more, my business suffered badly during the 9 months all this took - a double whammy.
Revert to plan C. Talk to successful traders and see what I can learn. A seed of doubt was now sown. A very successful trader who I respect immensely told me I would never be a daytrader because I lacked the discipline required. This stung. Whether she said that to encourage me to try to attain discipline, or whether she really meant it I do not know. I have never been defeated by anything, surely trading was just another skill that can be learned. I was spurred to become more "disciplined", whatever that means.
Back to paper trading with a more disciplined approach. And only trade the US market in the evenings, so the business won't suffer - what a good idea. 6 weeks without a losing day! This was it. I had cracked it.The disciplined approach sure did work. It was obvious that index trading short term with the spreadbetters was impossible, so I opened a real account with a US broker again and started trading the S&P emini online. Guess what? I lost. I could hold intelligent conversations with the very best traders. I knew what I was talking about. I knew all the angles and wrinkles. I knew about risk and reward. I knew about how certain patterns do and don't work on the S&P. I knew about fib ratios. I knew the right and wrong times of day to trade. I knew technical analysis backwards. I talked the talk and walked the walk. But I couldn't trade.
Now the above spanned about 3 years, during which time I constantly watched stock charts for fun, and often wrote technical analysis pieces on boards, but did not trade shares at all. My analysis was good, but the prospect of actually trading shares over periods of days and weeks seemed so low key and boring after the adrenaline rush of daytrading futures, so I never even considered it. I would persevere with daytrading. I KNEW if I thought hard enough, learned enough, worked hard enough at it, then it MUST come right.
Revert to plan D. Private coaching. An excellent man and very successful trader (you know who you are, and thank you) tried to help me. Without the trading screen in front of me, I learned all the right responses and gave all the right answers. "You CAN do it. I know you can" he said. I tried again and lost. Great respect to you, coach, but you was wrong. I can't do it.
But why can't I? The answer? My psychology is wrong. I am who I am and my particular psychology just isn't suited to the very short hourly time frames I was trying to trade in. I work all day and get home tired. I sit in front of the screen with sweating palms and my heart in my mouth whenever I'm in a trade. My critical faculties get shot to hell and I find I'm making trades that, when analysed in the cold light of the following day, had absolutely nothing to recommend them, yet at the time, they looked sure fire winners. Or alternatively, I wait and wait for the pattern to prove itself and enter the trade so late that the move is over and starting to reverse by the time I get in. Half formed patterns look like they must certainly complete just the way I want them to, and they then surprise me when they don't, after I have taken the trade. Why do I do these things when I am so good at analysis and can read charts so well? Fear and greed. We all suffer from these, but we all overcome them in different time frames. I have often noticed that if I'm in an argument on the phone at work, I often fly off the handle and don't get the best result that I could have got because my emotions have got the better of my critical and analytical abilities. However, if I'm in a dispute that is taking place by letter, I nearly always win because the time frame allows me to think deeply, consider all angles and come up with a winning strategy. Why have I not realised this before and considered it in conjunction with my trading? Dunno. But it sure makes sense now.
A friend professional spread better of mine suggested that trading in a longer time frame might suit me better. I resisted because I loved day trading and wanted to succeed at it. But for the last few weeks, I have been watching shares in a daily or even weekly timeframe. I chat with a friend on a Sunday morning about the charts. It is relaxed and fun. Prices are checked at the end of each day and adjustments made to stops and guess what? It works. The psychology of it is the same as when I'm paper trading - no stress. More likelihood of good judgements being made. I have realized that if I just sit in front of the screen with sweating palm and thumping heart with no idea where the price is going then the trade is a gamble just like when i'm playing blackjack for amusement purposes.
"I trade, I invest, I take calculated bets. I am probably kelly criterion 0.33."
The successful daytraders that I know have certain learned abilities, and also certain psychological traits that enable them to make correct decisions while under extreme pressure. I have realised, after a long time, that no matter how hard I try, I do not have that ability. And that my skill lies in considering charts and weighing probabilities in a calm atmosphere. I am going to stop trying to wrench my mind into a place it will not willingly go, and play to the strengths that I have. This will be less stressful and more fun. So here's to Plan E...
Although I am still relatively short-term oriented, looking to play weekly moves I have now turned into swing and position trading. I use two trends, I'll call them longer-term and shorter-term, to help in timing my entries. The longer-term trend tells me what direction I should be trading (long or short). I use the shorter-term trend to determine when to initiate positions. (An easy way to see trends is through the use of moving averages) The goal is to initiate as the shorter-term trend is coming into alignment with the direction of the longer-term trend.
I'm not really one for using a lot of indicators. And those that I do use are more visual than based on precise numbers. I like being able to glance at a chart and trying to feel the mood of the action. The markets move based on greed and fear, and candlesticks are a great tool for reading those emotions.
Good morning or good evening depending upon your location - trade, live a good life and enjoy!
Also, readers on this site are hardly a uniform bunch. Perusal of trading styles reveals CFD traders, spreadbetters, and good old-fashioned share traders. Some are investors, some are short-term traders, many fall somewhere in between; some are just bloody gamblers. There are chartists; fundamentalists; those who mix and match both systems; those who follow lunar (loony?) cycles. People go short and/or long. Some bet on indices, some have a passion for commodities. Some are evidently very successful, some less so. Some boast about their huge profits (no prizes.....), some keep remarkably schtum about such things. A pretty eclectic bunch of people, in other words.
It is my mission to provide you with the information and trading strategies and mental ability you need to make better, well informed, trading decisions maximising your business potential. You will find (hopefully 
) the site a good and interesting resource for your learning and trading education and I really do wish that you find what you are looking for from this site.
If you find Financial-Spread-Betting.com's articles, wizards, FAQs or tutorials helpful, and wish to show your appreciation, please consider contributing towards this project -:
-> make a donation! This is the most direct way to help offset the the running and development costs of the site as well as help to keep this trading guide free and alive. To donate either click the PayPal button at the bottom of the page or use this link; you can send a donation in UK Pounds Sterling (GBP).
-> spread the word! You can help by linking to the Financial-Spread-Betting.com site on your blog or anywhere else you think it will be viewed. You can also use the green 'ShareThis' button at the top left of any page to email it to a friend or colleague or add it to a social bookmarking site for use later.
If you have a website and would like to link to us, then you can use the following html code. Just copy and paste it onto any web page on your site -:
<a href="http://www.financial-spread-betting.com/">Financial Trading Guide</a>
-> contribute by sharing with us your stories/experiences/tutorials so that other traders can learn from your experiences and pitfalls. Send your stories to traderATfinancial-spread-betting.com (remove the AT and substitute by @)
Our guide is much better value than a subscription to a traditional manual, and hopefully more useful too. Thank you!
