Day trading

[avinalarf]

stongle said:

That's the problem with money, it makes you do things you ought not do......

In the UK in the period 2011 / 2014 , 44% of SME start ups failed, only 16% were fast growing.
If one was looking to start a business looking at those statistics might well put you off doing so.
All new endeavours have a risk attached,it is how one manages that risk that sorts the wheat from the chaff.
The skills required to start a business are different from those to scaling up that business.
Indeed I would suggest that someone successful at running a small,"hands on"business might well not have the skills or the mindset to scale up.

[R11ysf]

avinalarf said:

Thanks for that,it's as I surmised.
So I think that you're saying that in day trading discipline is vital to successful dealing.
It can't be that simple surely.
I presume you pick a share you fancy or maybe any share,it doesn't really matter as long it's volatile,
have a defined strategy of selling if the loss exceeds - 5% loss or selling when the gain reaches + 10% and sticking firmly to that policy.
It's then becomes a game of statistics doesn't it ?
Or am I missing something ?
I take your point about consistent small profits.
So it's more the strategy rather than the performance of a company.
A company can be solid as a rock but if there suddenly develops some volatily you buy and sell.
Surely you have to have an advanced dealing platform to deal that swiftly on quick movements,or is it just better to have automated stop or loss buy and sell criteria .

Discipline is the bedrock and often the undoing of many a trader but it isn't just a simple as a bit of volatility and then you buy and sell! What happens if you buy, buy and buy again and never get the chance to sell?

The simple point is you need to be right and there are only 2 inputs there, direction and timing so you don't get stopped out before you have a chance to be right.

When I try to explain it to most people who don't get finance at all (usually friends parents) I compare it best to professional sport. If traders were footballers all are given the same ball, pitch and training (limits, markets and charts) and some of them will be Ronaldo and some of them will be playing Sunday pub football and scoring own goals. Some people just "get it" and others never will, so day and intraday trading is an art as much as a science. People interpret the same data in different ways and manage the same trade in different ways so there is a lot more to it than waiting for a bit of volatility.

Also with single share trading don't be under any illusions that the majority of market moves aren't on insider info in one way or another and lead investors will be given heads up of major info well ahead of the market. As for AIM it's literally the wild west!!

And another thing to remember is that a god company and a good share are not always the same thing. Branson always said the city undervalued Virgin group and so bought it back. Also some companies are the darling of the city and perform well despite never being good companies or making any profit (Ocado!!).

Trading and investing are very different things and it is far beyond a game of statistics otherwise everyone would just run an algo from their yacht in the med!

[Ozzie Osmond]

R11ysf said:

lead investors will be given heads up of major info well ahead of the market.

Any evidence to support that?

Or are you simply making the point that after an "announcement", typically made at 7.00 a.m., the company will give briefings to analysts and brokers. In other words, everyone gets the main facts available online at the same time although principal actors in the City will get more depth and a chance to ask questions.

As regards "insiders", London Stock Exchange has a computer system which monitors trading and is very good at spotting suspicious movements.

[walm]

Ozzie Osmond said:

R11ysf said:

lead investors will be given heads up of major info well ahead of the market.

Any evidence to support that?

It's clear that around most M&A there is suspicious trading activity.
But for normal company events like earnings or a profit warning that's BS.

LEad investors can be made insiders but then they can't trade on the info.
Of if they do, they can get fined millions, just ask David Einhorn about Punch Taverns.

The bad old days of a quick heads-up call from IR to Fidelity are pretty much over.

[R11ysf]

Yeah the short term leaking of EPS is gone, but when you are a big investor in a company and you have your monthly chat with the board to see how things are going they can let you know that things are going "well" or "not great" without giving you any specifics.

I think it's naive to think it doesn't as the same people who are friends and colleagues for 20+ years who end up in high positions with knowledge talk to each other as friends 1st and worry about being "inside" second. I know of a couple of times where someone has let it be know which way the board was leaning with regards to takeover bids and that's all you need to build positions.

The city is a place of co-operation, where sometimes you help someone and sometimes they help you. It's just the way of the world and something a novice on their own in a bedroom doesn't get the heads up on.

Edited by R11ysf on Thursday 11th August 11:08

[jonamv8]

Thought I'd document my morning so far. 3 trades 2 wins.

11/08/2016 11:05 GBP GBP/USD DFT 1.29635 1.29797 = 16.2pts
11/08/2016 11:04 GBP EUR/USD DFT 1.11489 1.11441 = -4.8pts
11/08/2016 09:16 GBP UK 100 DFT 6826.8 6833.8 = 7pts

Up 18.4 points thus far. 2 were strategy based and one was a hunch on FTSE which I've watched for a long time.

[R11ysf]

jonamv8 said:

Thought I'd document my morning so far. 3 trades 2 wins.

11/08/2016 11:05 GBP GBP/USD DFT 1.29635 1.29797 = 16.2pts
11/08/2016 11:04 GBP EUR/USD DFT 1.11489 1.11441 = -4.8pts
11/08/2016 09:16 GBP UK 100 DFT 6826.8 6833.8 = 7pts

Up 18.4 points thus far. 2 were strategy based and one was a hunch on FTSE which I've watched for a long time.

What are the costs on that? How many points are you giving up in costs on a 16 point winner?

[jonamv8]

R11ysf said:

jonamv8 said:

Thought I'd document my morning so far. 3 trades 2 wins.

11/08/2016 11:05 GBP GBP/USD DFT 1.29635 1.29797 = 16.2pts
11/08/2016 11:04 GBP EUR/USD DFT 1.11489 1.11441 = -4.8pts
11/08/2016 09:16 GBP UK 100 DFT 6826.8 6833.8 = 7pts

Up 18.4 points thus far. 2 were strategy based and one was a hunch on FTSE which I've watched for a long time.

What are the costs on that? How many points are you giving up in costs on a 16 point winner?

The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.

My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.

My GBP/USD was auto closed as it hit my limit.

My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.

[twinturboz]

avinalarf said:

Thanks for that,it's as I surmised.
So I think that you're saying that in day trading discipline is vital to successful dealing.
It can't be that simple surely.
I presume you pick a share you fancy or maybe any share,it doesn't really matter as long it's volatile,
have a defined strategy of selling if the loss exceeds - 5% loss or selling when the gain reaches + 10% and sticking firmly to that policy.
It's then becomes a game of statistics doesn't it ?
Or am I missing something ?
I take your point about consistent small profits.
So it's more the strategy rather than the performance of a company.
A company can be solid as a rock but if there suddenly develops some volatily you buy and sell.
Surely you have to have an advanced dealing platform to deal that swiftly on quick movements,or is it just better to have automated stop or loss buy and sell criteria .

Not sure where to even start to explain the process. As R11ysf says it's not simply just buying and having a defined risk, that's not going to prevent you from say getting stopped out 10 times in a row. It's a far more complex process than that and hence why most people tell you day trading or trading is a losers game.

If you study the best traders and look at their strategies in depth you'll see contradictions, one trader will say do this the other might say never do that. That's because there isn't a one cap fits all strategy, there's multiples ways of making money in the markets, the hard part for a beginner is to define their strategy.

Reading about the different strategies you come across for example the Darvas method that only buys new highs, O'Neil's CANSLIM that mixes fundamentals and technicals, you have momentum traders or Elliot wavers who use waves to figure out the stages of a stock. I guess the part you have to figure out is what strategy suits your personality for example you may prefer to swing trade on a longer timeframe as opposed to day trading.

For me personally as a technical trader, your right the company name to a certain extent doesn't matter the fundamentals doesn't matter instead what I'm looking for is a pattern. For most technical traders they'll have a portfolio of patterns that they know, ones that they'll have seen a million times before from hours and hours of screen time they'll have a rough idea of how they expect that pattern to resolve.

At that point, once you know what your looking for it just becomes a pattern recognition game. You enter with a defined risk if your wrong and see how the trade works. The big issue is getting to the stage where you recognise buy setups takes 1000's of hours and without doubt has cost you ££'s along the way.

Having said that as I said before that's just one part of trading once you know what your looking for you then have to learn the skills of managing the trade, learning yourself knowing your weaknesses and learning to isolate your emotions from your trading decisons.

Another common theme from the best traders you'll see it took them 5+ years of constantly trading and most of them blew up their initial stakes several times before they finally became successful, I guess to a certain extent you only learn the hard way in trading , though the pain of losing money.

Beginners start off with no strategy no defined risk they make money get cocky take bigger risks and eventually blow up. Or they chop between different strategies not taking the time to analyse what was wrong, was it the strategy or was it themselves that was the problem. I say that as someone whose been there and done that.

I don't think you are but don't be under any illusion that this an easy game to learn or that it's a fast way to make money, it's a long hard road and if you go through it I can guarantee you'll end up knowing yourself a lot better. But if you can make it and become consistently profitable then it gives you freedom after all you can work from anywhere just a laptop and internet connection.

The only real short cut I can see is if your lucky enough to find a trading mentor who can help cut the learning curve instead of having to go through the whole process on your own.

[avinalarf]

jonamv8 said:

R11ysf said:

jonamv8 said:

Thought I'd document my morning so far. 3 trades 2 wins.

11/08/2016 11:05 GBP GBP/USD DFT 1.29635 1.29797 = 16.2pts
11/08/2016 11:04 GBP EUR/USD DFT 1.11489 1.11441 = -4.8pts
11/08/2016 09:16 GBP UK 100 DFT 6826.8 6833.8 = 7pts

Up 18.4 points thus far. 2 were strategy based and one was a hunch on FTSE which I've watched for a long time.

What are the costs on that? How many points are you giving up in costs on a 16 point winner?

The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.

My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.

My GBP/USD was auto closed as it hit my limit.

My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.

A lot of jargon on here that I do not understand.......yet.
I need to read up a lot more on the subject.
However if you want to spend a few hours with me,explaining the basics,we can go for a curry after,on me.

[R8Steve]

Another useful trading idea is to have a look at etoro.

You can see what all the other traders are doing, what stocks they pick and when, if they win or lose, etc, etc.

I have a bit of money in there and just let it mirror the top traders trades.

Some are slightly cynical of the site but i think it's great and have done very well out of it.

[jonamv8]

avinalarf said:

jonamv8 said:

R11ysf said:

jonamv8 said:

Thought I'd document my morning so far. 3 trades 2 wins.

11/08/2016 11:05 GBP GBP/USD DFT 1.29635 1.29797 = 16.2pts
11/08/2016 11:04 GBP EUR/USD DFT 1.11489 1.11441 = -4.8pts
11/08/2016 09:16 GBP UK 100 DFT 6826.8 6833.8 = 7pts

Up 18.4 points thus far. 2 were strategy based and one was a hunch on FTSE which I've watched for a long time.

What are the costs on that? How many points are you giving up in costs on a 16 point winner?

The cost was in the initial spread. 1 point on FTSE and 1.2 points on both Forex.

My FTSE was manually closed as I felt it had run it's course, however I could have hung on for a few more points but I had stuff to do.

My GBP/USD was auto closed as it hit my limit.

My EUR/USD was manually closed out as I felt I'd got it wrong so wanted to limit losses while the GBP/USD continued up.

A lot of jargon on here that I do not understand.......yet.
I need to read up a lot more on the subject.
However if you want to spend a few hours with me,explaining the basics,we can go for a curry after,on me.

List the jargon I used and I will explain on each one for you

[avinalarf]

twinturboz said:

Not sure where to even start to explain the process. As R11ysf says it's not simply just buying and having a defined risk, that's not going to prevent you from say getting stopped out 10 times in a row. It's a far more complex process than that and hence why most people tell you day trading or trading is a losers game.

If you study the best traders and look at their strategies in depth you'll see contradictions, one trader will say do this the other might say never do that. That's because there isn't a one cap fits all strategy, there's multiples ways of making money in the markets, the hard part for a beginner is to define their strategy.

Reading about the different strategies you come across for example the Darvas method that only buys new highs, O'Neil's CANSLIM that mixes fundamentals and technicals, you have momentum traders or Elliot wavers who use waves to figure out the stages of a stock. I guess the part you have to figure out is what strategy suits your personality for example you may prefer to swing trade on a longer timeframe as opposed to day trading.

For me personally as a technical trader, your right the company name to a certain extent doesn't matter the fundamentals doesn't matter instead what I'm looking for is a pattern. For most technical traders they'll have a portfolio of patterns that they know, ones that they'll have seen a million times before from hours and hours of screen time they'll have a rough idea of how they expect that pattern to resolve.

At that point, once you know what your looking for it just becomes a pattern recognition game. You enter with a defined risk if your wrong and see how the trade works. The big issue is getting to the stage where you recognise buy setups takes 1000's of hours and without doubt has cost you ££'s along the way.

Having said that as I said before that's just one part of trading once you know what your looking for you then have to learn the skills of managing the trade, learning yourself knowing your weaknesses and learning to isolate your emotions from your trading decisons.

Another common theme from the best traders you'll see it took them 5+ years of constantly trading and most of them blew up their initial stakes several times before they finally became successful, I guess to a certain extent you only learn the hard way in trading , though the pain of losing money.

Beginners start off with no strategy no defined risk they make money get cocky take bigger risks and eventually blow up. Or they chop between different strategies not taking the time to analyse what was wrong, was it the strategy or was it themselves that was the problem. I say that as someone whose been there and done that.

I don't think you are but don't be under any illusion that this an easy game to learn or that it's a fast way to make money, it's a long hard road and if you go through it I can guarantee you'll end up knowing yourself a lot better. But if you can make it and become consistently profitable then it gives you freedom after all you can work from anywhere just a laptop and internet connection.

The only real short cut I can see is if your lucky enough to find a trading mentor who can help cut the learning curve instead of having to go through the whole process on your own.

Thank you very much for taking the time to explain so much ,it's very decent of you.
I know from my many years in business,that there are no short cuts,and that it's almost impossible to teach another the road to successful trading regardless of the commodity.
You cannot put your head on their shoulders.
However many books you read,or lectures you go to,its not the same as putting your own money on the table.
We each have a different approach to how much exposure to risk we are comfortable with and this is an important part of the equation.
The experiences,both the gains and the losses,go to shaping the way in how we run our own business.
So many other things ,such as the business contacts you have cultivated,and the quality of the staff you employ,all help to the success of the business.
The more knowledge one has the luckier one becomes.
You can be my mentor.

[avinalarf]

jonamv8 said:

List the jargon I used and I will explain on each one for you

That's very decent of you,but I feel I must set aside some time to read up a bit.
Otherwise you might find it tiresome,me asking what's this and what's that.

[twinturboz]

avinalarf said:

Thank you very much for taking the time to explain so much ,it's very decent of you.
I know from my many years in business,that there are no short cuts,and that it's almost impossible to teach another the road to successful trading regardless of the commodity.
You cannot put your head on their shoulders.
However many books you read,or lectures you go to,its not the same as putting your own money on the table.
We each have a different approach to how much exposure to risk we are comfortable with and this is an important part of the equation.
The experiences,both the gains and the losses,go to shaping the way in how we run our own business.
So many other things ,such as the business contacts you have cultivated,and the quality of the staff you employ,all help to the success of the business.
The more knowledge one has the luckier one becomes.
You can be my mentor.

Happy to help where I can as I'm sure others on here are too. As for mentoring I'm still on this journey myself far from a complete trader I'm sure there are others on here with far more experience but any questions just fire away.

Also if you have some free time I've found listening to some of these interviews are great, lots of wisdom tucked away in them.
https://chatwithtraders.com/podcast/

[avinalarf]

twinturboz said:

Happy to help where I can as I'm sure others on here are too. As for mentoring I'm still on this journey myself far from a complete trader I'm sure there are others on here with far more experience but any questions just fire away.

Also if you have some free time I've found listening to some of these interviews are great, lots of wisdom tucked away in them.
https://chatwithtraders.com/podcast/

I'll have a look later when I'm home from work,thank you.

[jonamv8]

Couple more trades prior to lunch for me:

USD CAD Buy 1.30441 to 1.30602 = 16.1 points

EUR AUD Buy 1.44501 to 1.44479 = -2.2


USD CAD spread of 1.6 points. EUR AUD was 4.5 points, I did it against my better judgement but the spread was too big really could have ran me a loss and wiped my USD CAD profit at one point.

USD CAD auto limit which was good as dropped since.
EUR AUD bit of a rollercoaster. Moved stop up to just below entry to minimise risk and got stopped out. Could have manualyy closed for 6 point gain at one point. LARGE SPREADS argghh

For balance I still have an open position from 2 days ago showing a loss of 1.35 points for balance - silly position looking back at it now but will hold another couple of days just in case.

[jonamv8]

jonamv8 said:

Couple more trades prior to lunch for me:

USD CAD Buy 1.30441 to 1.30602 = 16.1 points

EUR AUD Buy 1.44501 to 1.44479 = -2.2


USD CAD spread of 1.6 points. EUR AUD was 4.5 points, I did it against my better judgement but the spread was too big really could have ran me a loss and wiped my USD CAD profit at one point.

USD CAD auto limit which was good as dropped since.
EUR AUD bit of a rollercoaster. Moved stop up to just below entry to minimise risk and got stopped out. Could have manualyy closed for 6 point gain at one point. LARGE SPREADS argghh

For balance I still have an open position from 2 days ago showing a loss of 1.35 points for balance - silly position looking back at it now but will hold another couple of days just in case.

Get out of EUR AUD and it flies up - hahah welcome to day trading :-) nevermind

[jonamv8]

avinalarf said:

jonamv8 said:

List the jargon I used and I will explain on each one for you

That's very decent of you,but I feel I must set aside some time to read up a bit.
Otherwise you might find it tiresome,me asking what's this and what's that.

Many on here will be happy to help - you're probably better off reading up after some initial explanation on here so you dont go into books completely blind IMO

[jonamv8]

twinturboz said:

Not sure where to even start to explain the process. As R11ysf says it's not simply just buying and having a defined risk, that's not going to prevent you from say getting stopped out 10 times in a row. It's a far more complex process than that and hence why most people tell you day trading or trading is a losers game.

If you study the best traders and look at their strategies in depth you'll see contradictions, one trader will say do this the other might say never do that. That's because there isn't a one cap fits all strategy, there's multiples ways of making money in the markets, the hard part for a beginner is to define their strategy.

Reading about the different strategies you come across for example the Darvas method that only buys new highs, O'Neil's CANSLIM that mixes fundamentals and technicals, you have momentum traders or Elliot wavers who use waves to figure out the stages of a stock. I guess the part you have to figure out is what strategy suits your personality for example you may prefer to swing trade on a longer timeframe as opposed to day trading.

For me personally as a technical trader, your right the company name to a certain extent doesn't matter the fundamentals doesn't matter instead what I'm looking for is a pattern. For most technical traders they'll have a portfolio of patterns that they know, ones that they'll have seen a million times before from hours and hours of screen time they'll have a rough idea of how they expect that pattern to resolve.

At that point, once you know what your looking for it just becomes a pattern recognition game. You enter with a defined risk if your wrong and see how the trade works. The big issue is getting to the stage where you recognise buy setups takes 1000's of hours and without doubt has cost you ££'s along the way.

Having said that as I said before that's just one part of trading once you know what your looking for you then have to learn the skills of managing the trade, learning yourself knowing your weaknesses and learning to isolate your emotions from your trading decisons.

Another common theme from the best traders you'll see it took them 5+ years of constantly trading and most of them blew up their initial stakes several times before they finally became successful, I guess to a certain extent you only learn the hard way in trading , though the pain of losing money.

Beginners start off with no strategy no defined risk they make money get cocky take bigger risks and eventually blow up. Or they chop between different strategies not taking the time to analyse what was wrong, was it the strategy or was it themselves that was the problem. I say that as someone whose been there and done that.

I don't think you are but don't be under any illusion that this an easy game to learn or that it's a fast way to make money, it's a long hard road and if you go through it I can guarantee you'll end up knowing yourself a lot better. But if you can make it and become consistently profitable then it gives you freedom after all you can work from anywhere just a laptop and internet connection.

The only real short cut I can see is if your lucky enough to find a trading mentor who can help cut the learning curve instead of having to go through the whole process on your own.

this advice is bang on