# Diary of a Novice CFD Trader



## waza1960 (21 April 2007)

Thought I might give a insight to my experiences into CFD trading which I have being involved in for 4 weeks now, hopefully for the benefit of anyone starting to trade cfds.


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## ozymick (21 April 2007)

hi

Would be a great idea Waza.

I am looking forward to reading your posts


Michael


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## CanOz (21 April 2007)

Me too, looking forward to it. I've been trading CFD's for about the same time. I definately can give advice on what NOT to do..LOL!

Cheers,


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## Holdon (21 April 2007)

Double check every order you want to place, mistakes fortunately made me  some money but it could have gone the other way quite easily.


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## waza1960 (22 April 2007)

I might start with a little background have traded Shares personally and in smsf for last five years and options for the last two all successfully.                                                                                      I read books and magazines for last three months on CFDS.This thread is inspired by Catherine Daveys Book "Making money from CFD trading".                                                                                                      Catherines' Book for those who haven't read it takes the form of a trading Diary and deals I think very honestly and candidlywith the emotional ups and downs of trading .So after reading the book I felt I had the discipline to trade CFDS with reasonable confidence and in hindsight I was probably a little overconfident (being  a male did not help)                                                                                              So my first step was to find a cfd provider after checking the forums and checking their different trading platforms I decided to go with IG Markets which I have to say so far have being very good.I put 5k into the account to start with and another 5k a few days later.I guess I was a little cautious transferring money to somebody whom I had no prior dealings.Anyway I was happy to start with 10k and see how I went.I felt I started with good money management rules and I have never traded without a stop loss  and never will and to date I have not used Guaranteed Stop Loss which just seems too expensive.


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## R0n1n (23 April 2007)

Are you gonna start a blog or post ur diaries here?


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## waza1960 (24 April 2007)

Just post here.


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## waza1960 (24 April 2007)

First Week Summary: I had a profit of $3553.50 a Win/Loss Ratio of 2.25:1 Profit Breakup was FX CFDs 2.23%  Aussie Index CFDs 76.7% and Share CFDs 21.07% .I had 26 Trades for the week.My first Mistake was confusing the Value of Mini Index and Buying  Long 10 Contracts and being stopped out for a loss of $600.I didn't make any other mistakes that week and my maximum single loss on a single trade apart from mistake was $220.Life experience told me this was too good to be true making this sort of money in a week but human nature took over and I was really happy and looking forward to more CFD trading and more profits.Unfortunately the next three weeks after were all down.Obviously one major mistake which I didn't realise I was making then which I am sure the more experienced traders will point out was that I was risking too greater percentage of Account on a single trade


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## Uncle Festivus (24 April 2007)

Too much on one trade - maybe - depends what your stop loss regime is I guess. Out of interest, what is your entry/exit criteria for the Index cfd's? I trade the index's exclusivly, more profitable.
My tip - try not to overtrade after some good wins - don't stretch the luck too far


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## waza1960 (26 April 2007)

Was using Indicator entry and exits as well as support and resistance.


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## waza1960 (26 April 2007)

Week 2 Summary: Started off by requesting payment of 1st week profit of $3553 which was deposited into my account following day.Lost $2905 day 1 mostly on the index putting too much faith in fundamentals and not on trend how many times does one need to be told trend is your friend and ignoring it but in my defence i was buying on short term trend and ignoring longer term.Ended up -$1409.00 at end of week.Had 30 trades win/loss ratio .88/1 max profit on trade $1225.00. max loss $440.Stupidly after first week increased amount at risk per trade which in hindsight was already too high.By the way all these trades are intraday or two days max.


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## waza1960 (26 April 2007)

Week 3: (Short Easter Week) down -$2587 for the week .17 Trades.Wins6/Loss9 Max Loss on individual trade $480 Max Profit on individual Trade$875


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## waza1960 (26 April 2007)

WEEK 4: loss for week -$5590.25 win18/Loss 33 most losses on index max loss $1125 max profit $1805.Made many mistakes lost discipline.


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## waza1960 (26 April 2007)

And finally after disasterous week 4 am disappointed and down with results of my start to CFD trading. But will review all trades.Learn much more technical analysis  and am now even more determined to eventually succeed.Will Transfer 1st weeks profit back into account.Lessons learnt:Stick rigidly to smaller % of account for individual trades.Always follow Trend it seems you must actually make this mistake before it sinks in.Do not overtrade.Do not overtrade CFDs at expense of other Derivatives.Stop trading after down 50%of orginal balance.So there you are probably should have titled thread everything you should not do trading CFDs lol


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## professor_frink (26 April 2007)

waza1960 said:


> And finally after disasterous week 4 am disappointed and down with results of my start to CFD trading. But will review all trades.Learn much more technical analysis  and am now even more determined to eventually succeed.*Will Transfer 1st weeks profit back into account.*




I'd highly recommend you don't do that waza. Out of 10K you deposited before you started, you've lost most of it already. What makes you think you won't lose the rest if you put your first week's winnings back in your a/c?

It sounds like you may be better off doing some real time papertrading to try and fine tune things. Then when you have established that you do indeed have a workable method, deposit the money in and try again.

Just my  worth


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## waza1960 (27 April 2007)

I was only going to redeposit profit into account as a pschological boost will not trade cfds until I learn more.Will slowly build account back up to 10k using profits from options.but thanx for the advise agree wholeheartedly


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## bingk6 (27 April 2007)

waza1960 said:


> I was only going to redeposit profit into account as a pschological boost will not trade cfds until I learn more.Will slowly build account back up to 10k using profits from options.but thanx for the advise agree wholeheartedly




If you are confident with building profits using options then why use CFDs. Stick with what you know and are successful with. If you are really good at it, just stick with it. At the end of the day, you are trading to make money, not to show people that you can trade a dozen instruments. Resist the temptation to keep looking for greener pastures. 

Just my


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## waza1960 (27 April 2007)

I like the flexibility of CFDs and won't give up on them until I master them.I also like trading multiple products.Its just that I need more education and experience but I won't give up but you are right if my personality was different it would probably be wiser just to stick to what you know


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## woodrel (30 April 2007)

Interesting read waza1960. I have been trading CFD's for around three months after 5 years of successful equity trading. I am currently around even on my CFD trades after making some silly errors at the beginning and then getting hit at the end of March. I am writing a personal blog too which I haven't 'released' yet. It's a diary of my thoughts, feelings and trades and how I am managing in this very strange game. I recommend writing and reviewing a trading diary. It can really help when you want to go over your successes and failures and to see where you might be going wrong.


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## Tech_king (30 April 2007)

Good luck with your cfd trading. I have only tried it once on a new trading platform with no money at risk, i made 50K with it, but they just don't seem my cup of tea!

When i started trading i had a few wins like most i guess, then it is funny because (well not funny really!) but like it seems most people including i not knowing enough, breaking the rules i set, even after i reviewed them, broke them again only to have a $15000 loss.

I started again 6 months later, after a short break thinking of why i lost, then paper trading again. I learn't alot of why i had lost, and intern gained 200% more dicipline!! I have now erased my loss completly and am now well into profit trading full time.

It takes patience but if you are committed you will eventually get there with any form of trading!

Good luck getting back on the bike after your falls!, when you have healed of course!


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## doctorj (30 April 2007)

waza1960 said:


> I like the flexibility of CFDs and won't give up on them until I master them.I also like trading multiple products.Its just that I need more education and experience but I won't give up but you are right if my personality was different it would probably be wiser just to stick to what you know




Congratulations for having the balls to admit your mistakes to the forum.  So many here are fairweather posters that only discuss their success.  Don't worry, you are not alone and the great majority of traders and investors have made a donation to Mr Market.  You just don't hear about it so often.

If you're game, perhaps you can post some of your trades (what, why you entered, when, price, planned exit, actual exit, position size, why you exited) and they can be discussed here.  I'm sure you'll learn plenty, as well the countless others that don't have the courage you do.


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## telstrareg (1 May 2007)

Here's a good story for you. I've been continuing my intraday experimentation with $10 a side CFD trades. I  was short on WOW while some unusually large orders were holding up the market at particular price. I was sitting on an $12 profit - $20 commission round trip and saw that if the the buy dropped out, market would easily fall several cents and I would be in the black overall. I waited 30 minutes for this buyer to budge, but in the end I had things to do and at the first sign the market was moving against me I bought at market.

4 seconds later the buyers vanished/were sold and the price dropped 5c immediately. Don't you love it when stuff like that happens?


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## Slothhead (1 May 2007)

It is amasing how similar Trading and playing NL Holdem is to one another. 

People go on tilt, traders and poker players and the same thing that can be said at the end of the day is that, when you lose concetration and allow emotion to creep in, then you will lose money 


Its good to take some beats. I know i have just recently, the last few days, every time I live trade, if I go short, I should have been long, if I went long, I should have been short. 

The times that I wanted to go short, and didnt get in at the price I wanted, the market went the right way. i.e. RIO today. 

When that sort of thing happens it is good just to turn the PC off for the day and take the dog for a  walk.


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## skyQuake (6 May 2007)

I've found that trading with a tiny contract size helps maintain discipline:

1 Contract ASX200 Mini ($5)

Since the Profits and losses are much smaller, you're better able to focus on the trade rather than how much you can make or lose.


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## waza1960 (6 May 2007)

Well despite CFD losses am a little more positive having some small gains with much reduced position sizing and making good profit from BHP and Oxiana Options sold Friday


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## smoothsatin (6 May 2007)

Waz,

Thanks for posting your initial real time experiences on CFD trading.

I am in my cfd trading infancy also, but have started off on smaller amounts, wanting to feel my way and adjust my trading plan with real experience (paper trading just doesn't do it for me). I have been successful in principle (i.e. in picking stocks to long/short and when to buy in) but have butchered my profits with inexperience and an itchy exit trigger finger!

Anyway my advice for what it is worth, i am a professional punter (horses) and can tell you the mental side of things are almost exactly the same between betting and trading, you really need to have a rock solid trading plan with strict rules to trade/punt by.  Not to oversimplify, indeed you may still be able to trade profitably, but won't reach your full potential unless you approach each trade as totally independent of all other trades (unless different transactions are part of the same position).

I agree with Woodrel, assess all trades once closed, reviewing why it worked/failed, was it your plan or it's innaccurate execution?

Very interested in hearing how you fair in the future, i will start posting some of my trades shortly also,

Good luck


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## >Apocalypto< (7 May 2007)

waza1960 said:


> Well despite CFD losses am a little more positive having some small gains with much reduced position sizing and making good profit from BHP and Oxiana Options sold Friday




Wazza and other new CFD traders.

Position size when your new to any leveraged product makes all the difference.

As in my PM to Wazza, I got smashing after smashing last year in my CFD start out.

Really knocked me for six but as in all things, life goes on.

So the only advice I will give any new CFD trader is start on tiny positions get used to leverage, have a strict plan/rules on entry and exits never break your rules and always be patient the market will always be here tomorrow.


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## R0n1n (7 May 2007)

Trade_It said:


> Wazza and other new CFD traders.
> 
> So the only advice I will give any new CFD trader is start on tiny positions get used to leverage, have a strict plan/rules on entry and exits never break your rules and always be patient the market will always be here tomorrow.




this is true. Start small. I have learned one thing for sure. Missed money is better than lost money. So like everyone says ...firm rules for entry n exit.


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