Right now Z is trading occasionally with the aim of supplementing his ‘day-job’ income. His current trading strategy means he tries to:
a) trade just one market (the FTSE)
b) make relatively few trades
c) make lower-risk trades
d) not let the sleep-loss caused by his new baby girl trash his judgement
Don’t Miss The Post - Blog Competition
THIS COMPETITION IS NOW CLOSED.
Fancy seeing England Vs Ireland in the Six Nations on St Patrick’s Day? Well read on…
Here at Paddy Power Towers we have a little theory – we reckon that there are certain ‘dumb’ trades that most newbies (and often the ‘not so newbies’) make time and time again. Also, as an Irish company with deeply religious convictions we’d like to give you all a chance to confess. So come one, use the comments box below and let it out.
Confession is good for the soul but, just in case you need an added incentive, we have two Six Nations tickets to see England vs Ireland in Twickenham up for grabs. The tickets get awarded to whoever posts the dumbest / silliest / funniest trade ever.
So did you ever sell Vodafone based on a strong trend and then realise you were looking at last months’s graph … of Vivendi. Or, on September 10th 2001, did you look out the window and think “Hmm, the weather is gorgeous and I feel great, I think I’ll park that mortgage money in a big long position until we find a house”? C’mon, ‘fess up.
Now here’s the Terms / Conditions / Rules / Small Type / blah blah blah stuff:
- This competition is only open to clients who have a real account with real money in it and who have made at least one trade (i.e. opened a position) before today (Monday 4th Feb. ‘08). Sorry, demo accounts don’t count.
- To enter you need to tell us about your dumb trade using the comments section below.
- This bit is really important: if you want to be in with a chance to win you need to enter the email address you have registered with paddypowertrader.com in the email address box. Don’t worry, no-one apart from us will be able to see your email. However unless you enter the right email address in there we won’t be able to check your account or contact you.
- See the competition page for all Terms & Conditions
Your comments will be judged by the Paddy Power Traders according to how much they make us laugh, how cringe-inducing they are and whether they get an ‘Oh, I’ve so been there’ out of any of us.
And to get us all started Mr FT, Garden Gnome and I are all going to put our dumbest trades in the comments area below.
We can’t wait to see if you guys come up with stuff that’s dumber than ours …
THIS COMPETITION IS NOW CLOSED.
February 4th, 2008 at 7:12 pm
Sitting comfortably? Right. My tale starts back in Jan 2007 when I had been trading full-time for about 3 months. I was mainly trading indices and had just started to build a decent bit of working capital. Oh, and I had just started to experiment with using CFDs too.
That Xmas I noticed that everythiing I tried to order from Amazon had sold out.
‘Hmm..’ though I, ‘Amazon must be doing quite nicely’. Maybe I’ll spread my wings a bit with a small equity trade’. Sensibly though, I realised that this was a market I new nothing about. So I set my stake and stop loss to allow a maximum loss was €500.
Then I went skiing.
What I hadn’t realised was that CFDs have this thing called ‘contract size’, which the CFD brokers use (or used back in those days) to keep the small guys like me out. And while my S&Ps and FTSEs had a contract size of 1, Amazon had a contract size of 10!
Needless to say Amazon’s Xmas trading update was dire (their UK site did OK but their US site tanked). So I came home from skiing to a €5 grand loss.
To make matters worse I then tried to trade my way out of it. However my emotions were all over the place and a fortnight later I was €8 grand down. €8 grand! That was 2/3 of everything I had made since startig trading three months earlier!
I can look back and laugh at it now … as long as I don’t think about it too hard. But even writing this is beinging tears to the eyes!
February 4th, 2008 at 9:01 pm
Hmm,dumbest trade? I’ve got enough to choose from. Well seeing as I’ve already ‘fessed up to last year’s greatest in my Christmas diary My Five Crap Trades Of 2007, I’ll go back a few years. Now, this was more of an asset allocation than a single trade, but it represents a common mistake involving getting in the way of falling knives. In Aug 2000 the Investment Company I was with closed, handing me a worthwhile redundancy payment. I’d found a new job and was toying with the idea of splashing my cash on a new Honda Fireblade. “Be sensible, you fool” said Jiminy Cricket, “You’ve got 4 nippers and a mortgage. Invest the money.” So I did. The market had fallen quite a bit and looked better value than for some time. I stuck in around £25,000 across the equity markets and within a year had lost more than if I’d bought the damned motorbike! The year 2000. Ah yes, a small way into the bursting of the dot-com bubble that lasted for a further 3 years. Great timing man.
February 4th, 2008 at 10:21 pm
Very impressive Z.
I’m still crying over this one now, 2 odd years later!
New to trading and spreadbetting (although with ‘time served’ in equity fund management) I decided to have a go at FX trading, outside my core competency but it looked new and potentially exciting for short-term trading. After all, how difficult could it be?
Listened to several eminent fx analysts saying how the US would have to cut rates in the aftermath of Hurricane Katrina, and that the Japs would have to raise rates for the first time in ages as their economy showed signs of life. Must be $ negative, yen positive they all said. So I went short of the $/yen at around 108.80 in a £5 bet (check the chart for when that market bottomed in September 2005-yep I got it!) And set a stop at what I thought was a reasonable 110.55 So despite having a catastrophe with my PC-(it literally caught fire a couple of days later), I felt reasonably comfortable that my loss was limited to less than a couple of hundred pips.
To cut a long story short it took lawyers and 6 weeks to get my PC rebuilt and reinstalled, due to a warranty dispute. But I wasn’t worried-although an modest inconvenience not being able to trade the market, I was busy trying to put up my nice, shiny, new polytunnel.
Eventually I got my PC back, plugged in and running. Logged in to find my account in absolute tatters. WTF had happened? Answer..instead of typing in 110 as my stop, I had entered 101 and the $/yen rate was now soaring through 115.
Like Z, thought I’d be clever enough to trade my way out of it. After all, if it went up so fast it would surely have a breather and rattle back. After the 8th consecutive ‘up’ day my nerves and account balance were shot. I closed out my position at 118.40. Weeping softly, I was a short 1000 pips (and £5k) offside.
A sizeable portion of my redundancy cheque was buying a Cheeky Vimto for some white sock wearing ‘merchant banker’ (to use appropriate rhyming slang!) from Plaistow.
Boy does that still rankle!
February 11th, 2008 at 10:55 pm
Hello, my name’s Ken and I’m an a… hang on, that’s the other lot.
So, dumb trades. Can’t compete with the thousands that you guys seem to have blown but I’ve had enough dumb trades that have lost me enough undo a lot of those hard won winners.
The problem isn’t the losing trades, they’re what we expect. It’s the losers that are instantly recognisable as being bigger than they should have been and which we just shouldn’t have been in at all.
My worst was 250 points on GBPUSD at £2 a point. So not a disaster but I’d rather have bought 750 Kit Kat Chunkies. Even a thousand creme eggs. And this was in the last couple of months, not like it was one of my first trades ever. So how did it come about?
Two big boo-boos. And what makes the trade really dumb is that I know I’m prone to these particular mistakes, know when I’m succumbing to them but still charge on. That dumb.
Boo-boo number one is entering a trade because I’m bored, I want some excitement, I need a thrill. Like there isn’t a cheaper way! So a quick glance at the chart, watch what the price does for a few minutes then plunge in with a £2 short.
Immediate effect, naturally, is that the price starts rising. And keeps rising. No problem, my stop will be triggered and I’ve had a short, sharp shock/lesson.
Oh yeah, boo-boo two is no stop. So the price goes on up and the losses with it. End of the day, it’s 60-odd points away from where I entered. But, hey, it’s bound to come back down overnight, I’ll wake up in the morning and all wil be well (that break out above the trend line is just a spike, right?).
Next day we’re now 2 cents up from my entry. And that’s pretty much where it stays all day, give or take. Now I’m scared. Should close the position, lie down, drink some beer. No, be dumb, leave it open overnight again but stick in a stop at 250 pips above my entry.
Day 3 and things look better. The price has come back down. Now, it’s only half a cent off my entry point and trending down. I’ll soon be all square and can close out having had a wild ride but no financial hit.
Except my stop was taken out on a spike up that was just big enough to hit it. Oh dear.
How hard can it be? PLAN your trade. Set your ENTRY and EXIT points. And STICK with it. Very hard, apparently
February 12th, 2008 at 10:50 am
I normally trade on the FTSE rolly daily. By 4th Feb, I was substantially in profit and decided that I should “invest” some of my winnings in buying some jewellery for my fiancee as an early valentines present. Everyone is stock-trading nows that you should be buy low and sell high and I used this knowledge in my local jewellers where I bought a gold bracelet. Fortunately, there was a sale on which left me with loads of money left over. When I gave my fiancee the present, she was amazed that I had spent so much money on her. Then later on that evening, she found the receipt and realised that I’d actually spent £100 less than she thought I had. The next day, I logged on to paddypowertrader and noticed that gold was trading substantially lower on the day. In my moment of wisdom, I convinced myself that the price of gold was too low confounded by the previous day’s bargain. So knowing nothing about gold trading, I bought a unit expecting to be counting my millions by the end of the day. I soon realised that my jewellery shop visit did not make me an expert on gold prices and sold when I was £3 up. I spent my new found riches of £3 on some downloads from I-Tunes including “Gold” by Spandau Ballet. After all, £3 isn’t going to get me much at the jewellers. I think I’ll stick to FTSE 100 trading from now on
February 13th, 2008 at 11:51 pm
wy worst trade was definitley on a CFD with barclays on northen rock on a friday at about a fiver - lost all my money by the open on monday (shits-ville) had a 100 quid left from a 7 grand account - decided to put the 100 quid with PP spread bet (save the 30 quid commission) - i think i managed to lose that in about five minutes on my first BHP trade a stupid short - have just been trading index’s since and am doing OK
February 19th, 2008 at 3:51 pm
My worst trade was without a doubt the day I decided i would open a ticker and wait for the US unemployment data decided.
I didnt need to listen to any audio feed instead i would just click when i saw the numbers change. As focused as i was on the wall street price changing i forgot to focus on where i clicked and ended up going long when the price spiked lower. how simple and how stupid…..
then rather than wait for the market to settle i immediately sold my position at the peak of the spike (for fear of further damage) of course 15 mins later the market was back to relativley close to where it was before the announcement
Johnny
February 20th, 2008 at 4:25 pm
Decades later I can still hear the cheers
X number decades ago I played rugby at lock forward for my university team. This university also had a girls team which played with different shaped balls. On the occasion in question both our teams were playing away on the grounds of AN Other University …. in another province in fact.
The layout of the dressing rooms was so poor that a GS positioning system would have been very useful in finding one’s way. I was one of those guys who was always last off the pitch and last into the showers. On returning from the showers to the dressing rooms, I inadvertently walked into our girls team changing room. Boy was I glad that I had brought my size 12 muddy boots to the showers with me!! The screams very quickly turned to cheers…………..
But when I got on the bus to go home, the creschendo of cheers was deafening; I can still hear them today. The looooooooooooooong journey back ……………. Walking through the university corridors … listening to ” Hey pal, what size boots you got” ………………. Today when I meet an old teammate at a game guess what the very first ‘do you recall’ item is ?????
So there you have it, my dumbest trade was trading dressing rooms with the girls team!
February 26th, 2008 at 10:03 pm
there has only been 8 reply’s surely you have to give ticketrs to all the poor barstards that have owned up to their supreme efforts at making a few bucks! at the end of the day we do pay the ferryman!
February 27th, 2008 at 11:50 am
Simon,
If we had any more tickets for this competition I’d gladly hand’em out to you guys - but they are like gold dust. Might try begging, grovelling and brown-nosing the powers that be though, to see if I can get a little something for everyone that enters …
Good point on the lack of replies too - if you are reading this and you haven’t replied yet c’mon … lets hear from you. It closes Friday and you have to be in it to win it!
Z