FT has been trading full time from home for two years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
A Monkey And A Full Skip
Wow, what a day, and it’s only just gone lunchtime. So far today I’ve made a monkey (£500) on my trading and managed to completely fill the builder’s skip, delivered this morning.
The married guys might recognise one of our family traditions; each year my missus and her mum have a competition to see how much worthless junk they can fill our house with (no, the mother-in-law doesn’t live here, she just contributes). Every Spring I fork out £200 and take a morning off to get rid of all the accumulated junk and a new competition begins for the following year.
I mentioned yesterday that I was the slightly bored holder of £10 of EURGBP. This morning bore the fruit of yesterday’s patience; I was greeted with a cuppa and a price of £0.7655. I decided to take a fiver off the table ahead of the German ZEW survey at 10 o’clock. It was too early for lightening reactions, but I still got £0.7650 for £5 and brought my stop up to breakeven.
There’d been rumours of a much weaker number for the ZEW, but in the event it was better than the original forecast (-32 against –40 expected). The Euro had a better tone to it today, despite comments from Trichet about ‘excessive exchange rate moves’. So with that in mind I placed a £10 spread bet to buy EURUSD at $1.5410.
This was the sort of trade I wanted today; the move was fast enough to allow me to lock in £70 by selling £5 at $1.5424 and bring my stop up to breakeven; I wanted protection whilst I was busy labouring in the garden.
I popped back in time to sell another £2 at $1.5442 and £3 at $1.5480 to close out the trade ahead of the US trade figures. Total profit on this trade was £344.
I’d left a limit order on the EURGBP trade to sell £2 at £0.7660, and when this triggered I brought my stop up to £0.7640 on the balance.
US trade figures were slightly better than forecast, but the real headline was the Fed’s announcement of further action to help liquidity in the markets. This lopped £150 off my running short FTSE position and led to my EURGBP trade being stopped out. Total profit on the forex trade was £290.
This morning I stuck a tentative toe back in the equity market; Following their worse than expected numbers I bought some Friends Provident, just in a fiver, to see if the US private equity firm, JC Flowers, is tempted to make an offer. After paying 121.49p for £5 it looked for a while as though no one cared either way about the results, but a subsequent announcement that JC Flowers would welcome the opportunity to talk to management took the price up to 125p.
All in all a damned fine day, and I found time to fill the skip.
Happy Trading
March 11th, 2008 at 6:29 pm
hey,great call on rightmove Ken. Must be having tea with a broad grin tonight.
March 11th, 2008 at 9:35 pm
Whoops! If anyone read my earlier blog closely they might have been confused to a couple of references to a EURUSD trade (I’d already closed that one). Of course it should have read EURGBP, but my excitement got the better of me. It should make more sense now!
Check out the Dow overnight-the biggest % move in 5 years. As dead cats go, that’s one helluva bounce.
March 11th, 2008 at 11:07 pm
Not so fast. Having smashed through the support I was expecting at 485, I brought my Rightmove stop down to 489. Where it was duly hit after the Fed’s bit of fun. And before the price went right back down again. Have to wonder if I’m being too aggressive with my stops in these volatile times — but then the losses can rack up pretty quickly and a small profit always beats that.
Incidentally, given that all the actions that all the central banks have taken since last August to “fix” the credit crunch have achieved precisely nothing, am I the only person that thinks the Dow’s reaction is OTT?
March 12th, 2008 at 3:00 am
I’m with you Ken-throwing $285bn or however much at the market may get rid of a few of the ‘fellows’ the other side of my written puts, (hoooray!) just for the time being but I’m still convinced that the ammo belt is getting near depleted but there are still plenty of ‘injuns’ coming over the hill.
Will General Ben ‘Custer’ Bernake call for reinforcements (in the shape of a 0.75% cut next week)-but what happens when like in Japan for the best part of 10+years rates were zippo but still nobody was spending? Or investing. Unlikely scenario, but stranger things have happened.
Perversely, saw an interesting article/conspiracy theory which suggested that if Fed, ECB & BOJ all agreed on ahem ’strong dollar’ policy, via a ‘bit’ of concerted intervention-then Europe & Japan would stop wingeing about how hard it was for their exporters, commodity prices would fall, (as the currency appreciated) and hey ho-so would inflation. And all those nice people around the world who have bought dollar assets for yonks would be winners too!
After a short while rates could be cut, everyone would be happy, and we all lived happpily ever after….
…….Bit of short term pain for a longer term win?
I’m not related to Hans Christian-Anderson, (another one of those posh double-barrelled footballers?) nor am I one of the Brothers Grimm, but in another fairy tale I’ll be putting my CV in to be the next ‘guv’ of the BOJ!
March 12th, 2008 at 10:29 am
i’m with you guys, but I have a habit of being too bearish, too long. I’m keeping my short and taking the short term hit. If I close it I’m not confident of getting the position back on in time. I’m looking to add to it, but just for the moment I won’t get in the way of a strong wind. Tempted to short some banks.
March 12th, 2008 at 10:52 am
Reopened my Rightmove short positions now the price has retraced. Back in at 494-495. Same stop, 508, for a quit exit if the 20MA/500p doesn’t hold.
March 12th, 2008 at 11:32 am
Good Luck. Dipped my toe in the bear’s pool, selling some Barclays (a bit too early)-blog on its way.
March 14th, 2008 at 8:27 am
Hi there, I have been having a problem exiting trades, I get a message on screen saying AN UNEXPECTED ERROR HAS OCCURRED DURING THE PROCESSING OF THIS TRADE. PRICE HAS EXPIRED PLEASE TRY AGAIN, This leads to greater lossses on negative trades and less gains on positive trades.
The most attempts I have had to exit a trade is 7. (so far) This happens with every trade. You can imagine my losses during this time as I exit when the trade changes direction. You are aware of the small sums involed in most trades when spread betting. At the moment I am not confident in the system and it has cost me 25% of my investment. I am getting no help from Support@paddypower. They say it is due to VOLATILITY. This is not the message on the screen
Have you experienced this problem and can it be overcome.. Pat
March 14th, 2008 at 8:57 am
Hey Pat, bad luck on the price expiry thing. I’ve no axe to grind here but it’s not something I’ve seen a lot of on the PP platform (there’s another provider that I’ve given up because of this problem and a similar one where the order just times out).
I can see that volatility makes sense — if the price is moving quickly then it’s more likely to have moved from your order before it gets filled. On the other hand, this ought to work in your favour as much as to your detriment (yeah, I know, Sod’s law gets in the way).
One way to avoid this is to decide your target exit price ahead of time and place a limit order. I’ve found PP is very good at filling these orders promptly when the price hits the target — something I’ve noticed isn’t always the case on other platforms when the price briefly hits your target then retreats. I know this doesn’t always fit with what’s happening in the market but worth thinking about.
Finaly, without wanting to preach, have you checked out any of the books/websites about trading strategies and psychology. One of the failings we all experience from time to time is to blame the platform rather than our startegy for our losses. The problem with this is that we then don’t learn from our mistakes/experience as we’re not analysing the trade correctly. May not be the case for you but losing 25% due to the problem you describe sounds to me like a signal to review your approach.
Good luck.
March 14th, 2008 at 11:11 am
Morning Guys,
Pat, sympathies mate, never like to hear of someone losing their capital. Fraid, as far as PP goes I’d echo Ken’s views. I haven’t experienced it much at all. Have you noticed any pattern (apart from losing out)? For example, is it always one instrument, say GBPUSD or is it across a wide range of instruments? Do you try and ‘news trade’ or catch a fast moving price after results?
Observations from my murky past:
There’s another major trading platform that I use as back-up, but I have no confidence in dealing with them in size. I found quite regularly that trying to get out of a position resulted in a response similar to ‘the dealer doesn’t like this market; he’s gone to the crapper to read the Sun and think about what price to make. It won’t be the one you wanted to deal at.’ Despite tight prices I needed to feel I could dump a position quickly so took most of my money away from them.
A couple of years back I was asked to review some forex trading platforms. They were pure forex, not tax-free spreadbetters. Demo trading them I found that catching the price was pure roulette, the art wasn’t in choosing your strategy but in timing the click to try and hit the price you wanted. Researching these, and several other platforms, I found the blogs full of horror stories from traders and concluded:
It seems that every platform has a sample of unhappy traders
or
we’re all being done over all of the time
or
like in life, we ain’t going to bother blogging if we got the price we wanted, cos that’s what should happen.
I used to try and ‘news trade’, catching a fast moving market. but I found that apart from being in an online queue some dealers really didn’t like it. I used to get a lot of re-quotes, but even worse, like you say, is getting the re-quote on the way out. Although sometimes I react to figures if they confirm my original strategy, I’m trying to aim for open and closes away from news where possible.
I reckon Ken’s advice is top-notch. Look at ways where you can control the entry and exit points. I’d suggest demo-trading for a while just to see if you feel comfortable with the strategy, then ease back in with small bets.
Keep a diary of the trades and see if there’s a pattern to the re-quotes, either in instrument, or timing or both. Another example is the silly-half hour, 8-8.30 where dealers are unsure of the underlying price and, especially in these markets, get a bit jumpy.
Good luck Pat, let us know how you get on.