# My trading blog



## adamim1

A little while ago I posted a thread discussing CFD providers. Originally I was going to go with CMC but eventually I changed this to IG Markets. Their charting is much better and although it doesn't seem as simple as CMC I think that IG markets platform is much better.

I thought I would start a blog of a relatively new trader in CFD's. I think it may be a good resource for people looking to trade CFD's for the first time to see what its like.

Originally I was going just to invest in gold and silver (mostly silver) however I've since signed up to Slipstream trader and going to move into stocks as well.

Initial investment: $8000.

My first night trading was wild (trading silver), but it was good experience. After massive volatility I had been up and down all night, however after it calmed down I was able to be patient and buy at the bottom of a massive spike (at 1am). If anyone follows silver closely you can sometimes see 50c or more drops in seconds, its not a good thing if you had a long position slighty above...it can hit stops a $1 away in seconds.

This was put on a friday night and by monday morning I was up 11k. My total risk on the trade was $1250 (25pip stop). I eventually moved the stop loss up and took profit at $8500. Not bad for the first time - BUT THIS WAS JUST LUCK.

Unfortunately after that trade my confidence grew rapidily and I eventually (after a week or so) lost that $8500, but still had my original $8000.

Since then I signed up to slipstream and have managed to do well out of it, so far I have made back the initial investment (1500) + a bit more). I think signing up to a subscriber is well worth it if you're going to be in highly leveraged positions as you gain a lot of knowledge by watching the video updates. I also have a David morgan subscription, but hes a seasonal trader so theres not many updates.

I did manage to get up 3800 (through slipstream picks and a silver 1/2 contract) but eventually the silver let me down and I pretty much broke every trading room - i let emotions take over and was back down to my intial investment in less then one hr. Good lesson learnt here.

The last 4 weeks have been a huge learning curve and I've actually started to learn from my losses and mistakes. I think you need to lose money before you can start learning.

starting this week Ive changed my strategy - especially in silver. Before I was trying to get into a core position and the massive seasonal rally, but this is proving to be difficult, costly and greedy. I now am taking a different approach. I will now be patient and buy into what I think is a solid buying opportunity and take profits where possible. I will be limiting risk wherever possible. 

Specifically:
- firstly my first priority is to trade to not lose money - im not thinking about profits.
- I am moving stop losses to buy in price upon 25pip moves and using smaller contracts to limit risk as much as possible 
- I am setting targets to take profit, not leaving it opened ended like before. The profits will be much smaller but I think its much safer to take profits where I can rather then watch it go up and then shoot down - seen it countless times.
- Be more patient! Its hard to wait for a good position especially when its volatile and in the middle of a rally. But patience will get me in a safer position.
- I am not going to be buying in massive volatility.. as much as I want to.. its just not worth the risk. The only time I will take a small contract out is if there a massive down spike (these only last a couple of seconds and if you get one you can make 40-50c in 30 seconds)
- I will still keep my slipstream trader picks, but I limit risk as much as possible and try not to take his higher risk ones.

Last night was my first night trading these rules, I was lucky enough to get a down spike and caught the bottom. I pretty much got out 90% from the top after 2min and made myself a quick $670.

Will update on the next trade.

Also I am happy for any suggestions questions.


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## skc

adamim,

Thanks for sharing. Review and reflect are two most important aspects of self improvement in all areas of life, trading included.

It seems like you've been lucky and learned some good lessons "for free". You don't want to try to make $8500 every day... you will simply blow your $8k account within 2 months. Making $670 is better but is probably still a bit too aggressive for the long run. You will (and already) have very volatilie equity curve and a few bad hands dealt by the market (and they WILL come) and your $8k wouldn't go very far.

Have you looked at risk of ruin analysis for your trading methodology? Well worth a read before a blow up.

May good drisk management be with you, always.


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## adamim1

I had considered it, but admittedly not a great deal of thought went into it. I'll definitely make sure I check it out.

I agree, I probably am risking too much. At the moment, 16 consecutively bad trades would wipe me out. Losing 8000 wouldn't change my financial position, I guess that's why I was risking a lot but I think I'll need to change that if I want to trade long term.

Thanks for the advice.


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## Wysiwyg

Things to be aware of ...

1) close stops get crunched more often
2) spike in opposite direction of trend catches close to moderately close stops
3) for some reason, after having a good win, nothing works for you
4) the market will take more than it gives 
5) you are gambling on a price moving up or down
6) the high/very high risk is why most people do not play (see 5)

from a gambler


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## adamim1

Wysiwyg said:


> Things to be aware of ...
> 
> 1) close stops get crunched more often
> 2) spike in opposite direction of trend catches close to moderately close stops
> 3) for some reason, after having a good win, nothing works for you
> 4) the market will take more than it gives
> 5) you are gambling on a price moving up or down
> 6) the high/very high risk is why most people do not play (see 5)
> 
> from a gambler




All trading can be considered gambling. But I wouldn't say it's 50/50.

Close stops do get caught often, and I learnt that when trading in demo. What I will be doing is buying in close to support, using large enough stops so as not to get caught during spikes and not trading during volatile times. My gamble is that if I buy in times when the volatility is low at a support line, or just off the support line, I can use a stop that probably won't get caught by a spike. Once the position moves in a positive direction by 25/50 pips I can take half profit and set stop loss to buy in. My major risk is the initial trade then hopefully zero risk when I move the stop loss.

The only other option I can see is to use very small contracts with large stop losses with are less likely to get taken out and purchase more contracts with each positive movement.

E.g

1st contract at $41 with stop at 40 - 
2nd contract at 42 with stop at 41- move stop on first contract to buy in price(41).

It would be a way of increase position size while keeping the same risk. Could probably take half profit on that first contract as well.


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## adamim1

Bought RIO @ 71.50


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## tech/a

Im confused??

Trading stock and quoting Pips?---Forex.
Trading Silver quoting Pips---Ticks?


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## nomore4s

adamim1 said:


> Bought RIO @ 71.50




Any chance for some more info?

Where is your stop?
Why did you buy?


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## adamim1

71.50 with stop @ 68.

Bought on possible market rally next week. Target is 75, but we will see how we go.

I've canned silver trading at the moment - its just too difficult ATM.


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## adamim1

tech/a said:


> Im confused??
> 
> Trading stock and quoting Pips?---Forex.
> Trading Silver quoting Pips---Ticks?




Just quoting what my platform quotes as.


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## tech/a

So your long RIO stock?
Stop is $3.50 = Risk.
How many did you buy?


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## skc

tech/a said:


> So your long RIO stock?
> Stop is $3.50 = Risk.
> How many did you buy?




Let me guess... 400 shares.


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## adamim1

skc said:


> Let me guess... 400 shares.




Yes, long RIO @ 500 shares. 

But I was short BHP 500. Took 1/3 profit and stop at buy in (39.00). A rally in the market makes me money will make be lose a few hundred dollars in BHP and gain in RIO. It the market goes south, then my loss it limited.


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## adamim1

All the markets were up last night. Hopefully the ASX opens up strong on Monday


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## investorpaul

adamim1 said:


> Yes, long RIO @ 500 shares.
> 
> But I was short BHP 500. Took 1/3 profit and stop at buy in (39.00). A rally in the market makes me money will make be lose a few hundred dollars in BHP and gain in RIO. It the market goes south, then my loss it limited.




Obviously I don't know how much is in your account but you started with $8k, made some, then loss some, so lets say you are at $10k.

You have then bought 500 RIO Shares which would have a total outlay of $35,750, however you could only gain this much exposure through the use of CFDs (leverage).

IMO the idea of using leverage is not to take significantly larger positions in the market, but more so to let you spread risk across a greater number of assets/shares with your limited capital base.

You have a stop loss that is $3.50 away from your purchase price. If the trade moves against you then you loss $1,750 ($3.50 x 500 shares)

That is nearly 20% of your total capital (based on a 10k account).

Yes you can make thousands as well, but eventually you will hit a run or 2, 3, 4 or 5 losses and it will be all over red rover.

If you don't mind me asking why are you using such a high risk strategy as a beginner?


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## kid hustlr

Interesting thread, feel free to go into as much detail as you like I'm sure people will be happy to read it.

In choosing your CFD provider, did you do any research on DMA vs market making?


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## skc

investorpaul said:


> Obviously I don't know how much is in your account but you started with $8k, made some, then loss some, so lets say you are at $10k.
> 
> You have then bought 500 RIO Shares which would have a total outlay of $35,750, however you could only gain this much exposure through the use of CFDs (leverage).
> 
> IMO the idea of using leverage is not to take significantly larger positions in the market, but more so to let you spread risk across a greater number of assets/shares with your limited capital base.
> 
> You have a stop loss that is $3.50 away from your purchase price. If the trade moves against you then you loss $1,750 ($3.50 x 500 shares)
> 
> That is nearly 20% of your total capital (based on a 10k account).
> 
> Yes you can make thousands as well, but eventually you will hit a run or 2, 3, 4 or 5 losses and it will be all over red rover.
> 
> If you don't mind me asking why are you using such a high risk strategy as a beginner?




He's got 500 BHP short which has size of ~$19k. So he's basically doing a RIO/BHP pairs trade with face value ~$19K, and a naked $16k or so in RIO long. Now whether he realises this or not that's another matter.

The problem is that he has stops with the RIO long (I don't know about his BHP short) and he can easily gets whipsawed into oblivion. Position sizes are way too big for the account of course.

Adamim1, look up fractional position sizing and the 2% rule for some useful guidance.

May good risk management be with you.


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## investorpaul

skc said:


> He's got 500 BHP short which has size of ~$19k. So he's basically doing a RIO/BHP pairs trade with face value ~$19K, and a naked $16k or so in RIO long. Now whether he realises this or not that's another matter.
> 
> The problem is that he has stops with the RIO long (I don't know about his BHP short) and he can easily gets whipsawed into oblivion. Position sizes are way too big for the account of course.
> 
> Adamim1, look up fractional position sizing and the 2% rule for some useful guidance.
> 
> May good risk management be with you.




Missed the post with BHP, massive position for an account of circa $10k.

I hope it goes alright for you Adamim1 and after you close out these trades you consider the use of risk management/correct position sizing.


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## tech/a

My original suspicion was deleted
These posts are only adding to my original thoughts.
For newbie to be pairs trading on leverage with a 10 k account!

S----U------R-----E


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## adamim1

Yep I understand it's a pair trade.

Probably I better idea would of been buying 300 instead of 500 buy I guess greed got the better of me.

Hopefully the market won't punish me on Monday. If ben bernanke gives the market something


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## tech/a

adamim1 said:


> Yep I understand it's a pair trade.
> 
> Probably I better idea would of been buying 300 instead of 500 buy I guess greed got the better of me.
> 
> Hopefully the market won't punish me on Monday. If ben bernanke gives the market something




Why do you come up with this " I know very little it all must be a dose of luck"
Then start trading like a pro with leverage beyond you initial persona.
Then turn back into a fruit loop with" I hope the market won't punish me on Monday"
Fun?


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## adamim1

tech/a said:


> Why do you come up with this " I know very little it all must be a dose of luck"
> Then start trading like a pro with leverage beyond you initial persona.
> Then turn back into a fruit loop with" I hope the market won't punish me on Monday"
> Fun?




I am new to CFD's. So I'm going to make mistakes.

I am pretty confident that the market will be up on Monday. My risk is limited with my pair trade.

If I was to stick to the 2% rule I would only be risking $160 per trade. If I were to risk 160 on RIO, my first target profit would be $160. I guess the time of putting the trade on $160 didn't seem like it was worth it.

I guess this may not be the correct type of thinking.


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## skyQuake

adamim1 said:


> I am new to CFD's. So I'm going to make mistakes.
> 
> I am pretty confident that the market will be up on Monday. My risk is limited with my pair trade.
> 
> If I was to stick to the 2% rule I would only be risking $160 per trade. If I were to risk 160 on RIO, my first target profit would be $160. I guess the time of putting the trade on $160 didn't seem like it was worth it.
> 
> I guess this may not be the correct type of thinking.




Why not have $320 or $1600 as profit target? Why even have profit targets? 

What makes u so sure mkts will be up on monday?


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## adamim1

The target is to make sure I don't get too greedy. 

Asia and the US markets were up Friday night, and im expecting the ASX to follow on Monday. Ben Bernanke is talking on Wednesday, I am thinking there will be a rally up until that speech.


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## skc

tech/a said:


> Why do you come up with this " I know very little it all must be a dose of luck"
> Then *start trading like a pro *with leverage beyond you initial persona.
> Then turn back into a fruit loop with" I hope the market won't punish me on Monday"
> Fun?




I think he's just trading like a newbie to CFD and don't really understand fully the leverage and risk management.

You'd be surprised how many people trade CFD because they can buy positions many times greater than their capital.


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## skyQuake

adamim1 said:


> The target is to make sure I don't get too greedy.
> 
> Asia and the US markets were up Friday night, and im expecting the ASX to follow on Monday. Ben Bernanke is talking on Wednesday, I am thinking there will be a rally up until that speech.




Greed aint so bad. Long term greed is quite good in fact

BHP closed in the US @ 38.06, our futs are flat.


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## adamim1

skyQuake said:


> Greed aint so bad. Long term greed is quite good in fact
> 
> BHP closed in the US @ 38.06, our futs are flat.




If Monday doesn't look very good at all I can sell out.


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## adamim1

Didnt look good. Got out at 70.45.


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## adamim1

Just put 3 new trades on - taking short position.

Cannot say which trades they were as they were a subscription trade. Will let you know how things turn out.

I am risking $200 on each trade.


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## sammy84

adamim1 said:


> Just put 3 new trades on - taking short position.
> 
> Cannot say which trades they were as they were a subscription trade. Will let you know how things turn out.
> 
> I am risking $200 on each trade.




The chartist?


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## Wysiwyg

adamim1 said:


> Just put 3 new trades on - taking short position.
> 
> Cannot say which trades they were as they were a subscription trade. Will let you know how things turn out.
> 
> I am risking $200 on each trade.



Now that's strange. How would we know they were subscription trades anyway? Why post you made some trades at all without some reasoning? A sandwich with no butter and nothing in between.


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## adamim1

Just topped up one of those trades with 1000 shares. Going to risk $200 on the top up trade.


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## skc

sammy84 said:


> The chartist?




I think he mentioned slipstream trader in the first post.



Wysiwyg said:


> Now that's strange. How would we know they were subscription trades anyway? Why post you made some trades at all without some reasoning? A sandwich with no butter and nothing in between.




It wouldn't be right to post trades here when others have paid for subscription service so he's doing the right thing imo. Of course that does make his posting somewhat meaningless to all other observers.


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## adamim1

I said I will update later, when I can mention the trade and why I went into them. Currently the prices are not far off buy in prices, when they get further away I will be able to say something.


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## adamim1

Closed one trade 1000 shares @ break even. 

The risk was too much, couldn't put a stop where I wanted.  I had 20 pip but it was too tight.


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## investorpaul

adamim1 said:


> Closed one trade 1000 shares @ break even.
> 
> *The risk was too much*, couldn't put a stop where I wanted.  I had 20 pip but it was too tight.




If the risk was too much you should not have placed the trade in the first place IMO.

Maximum risk should be calculated before you place the trade. How much "risk" you can handle then affects where you place your stop.

If you reduce your risk, you reduce the chance of blowing up your account. This will then mean you can trade for longer giving you a greater chance to learn and develop your "style/method".

All IMO, DYOR


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## adamim1

investorpaul said:


> If the risk was too much you should not have placed the trade in the first place IMO.
> 
> Maximum risk should be calculated before you place the trade. How much "risk" you can handle then affects where you place your stop.
> 
> If you reduce your risk, you reduce the chance of blowing up your account. This will then mean you can trade for longer giving you a greater chance to learn and develop your "style/method".
> 
> All IMO, DYOR




You're correct.

What I did was put a $200 risk on it which was a 25 pip stop, my other trades had 90-100 pips stop. I was worried that the stop was too tight. At the time of putting the trade on I was hoping that the price was going to tumble further (I got on late with this trade, the other 3 trades are all in profit) but it didn't.

So rather then risk the chance of getting stopped I took a $20 profit and closed the position.


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## adamim1

Still holding on these shorts ( 3 x aussie blue chips).



I'm on average 1.6% away from entry price holding profit, but holding onto them going into the fed meeting makes me nervous.


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## tech/a

Interesting that these shorts have a time limit placed upon them by someone else.
You dont seem to be able to do this (trade) without attachment.
As simply a business venture.
Your concern for loss shows like a beacon.

Loss is a part of any business as is profit.
If you understand the overall cash flow and profit strategy of the business you should be able to then trade without concern as to what's coming up or what's passed.


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## adamim1

tech/a said:


> Interesting that these shorts have a time limit placed upon them by someone else.
> You dont seem to be able to do this (trade) without attachment.
> As simply a business venture.
> Your concern for loss shows like a beacon.
> 
> Loss is a part of any business as is profit.
> If you understand the overall cash flow and profit strategy of the business you should be able to then trade without concern as to what's coming up or what's passed.




You're correct.

I should not worry about the loss at all. The trade has been put and the risk has been set.


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## adamim1

I am risking 2.5% of captial on each trade. A far cry from what I was risking before.


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## adamim1

Quick silver trade. Bought a dip.

Entered long at 3927 at closed at 3941.

Risk on trade was 2.5%


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## skc

adamim1 said:


> Still holding on these shorts ( 3 x aussie blue chips).
> 
> I'm on average 1.6% away from entry price holding profit, but holding onto them going into the fed meeting makes me nervous.




I have no idea what you are trading or who you are subscribing to... but taking risk off ahead of major market moving events, if your strategy hasn't take that into account, doesn't sound too stupid.


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## tollbridge

adamim1 said:


> I am risking 2.5% of captial on each trade. A far cry from what I was risking before.




.5% too much in my opinion. You're right - it's an improvement, but I still don't think you're grasping the whole money & risk management concept. 2% rule doesn't necessarily mean 2% on every trade, it's a MAXIMUM when you're almost 100% sure it'll turn out well.

On average I'll trade 1% maybe more, maybe less but never more than 2%. It's one of my golden rules written in my trading plan.

By the way, do you have a business / trading plan written out on paper that you can constantly refer too? I didn't for the first 6 months - it takes all the emotion out of trading.

Actually it kind of reminds me now how exciting trading used to be when I was leveraged up to the hilt and couldn't blink because I'd miss a change in price. Now that it's all written down I feel like a robot.


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## adamim1

skc said:


> I have no idea what you are trading or who you are subscribing to... but taking risk off ahead of major market moving events, if your strategy hasn't take that into account, doesn't sound too stupid.




Slipstream trader: Murray Dawes.

I was thinking of taking 1/3 profit and moving stop to entry. That what he usually does, though no update yet.


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## adamim1

tollbridge said:


> .5% too much in my opinion. You're right - it's an improvement, but I still don't think you're grasping the whole money & risk management concept. 2% rule doesn't necessarily mean 2% on every trade, it's a MAXIMUM when you're almost 100% sure it'll turn out well.
> 
> On average I'll trade 1% maybe more, maybe less but never more than 2%. It's one of my golden rules written in my trading plan.
> 
> By the way, do you have a business / trading plan written out on paper that you can constantly refer too? I didn't for the first 6 months - it takes all the emotion out of trading.
> 
> Actually it kind of reminds me now how exciting trading used to be when I was leveraged up to the hilt and couldn't blink because I'd miss a change in price. Now that it's all written down I feel like a robot.





I do have a set of rules I follow, but I didn't had a risk on trade rule. 

I ran 2.5% on the blue chips as they were a safer trade. The difference was about $40


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## adamim1

Murray is going to roll the dice tonight. 

I am going to set stops at entry.


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## adamim1

I'm doing well today. Up around 6% on total
Capital.

My trades were
NAB
WBC
ANZ

Would of done much better if I took short position on RIO


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## robz7777

Why are you suggesting that you should have taken RIO as a short?
Unless you had an open position the RIO cover would have been unnecessary?


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## adamim1

the position in RIO was larger. I risked way too much on it and closed the position earlier .. a whole $2 before the stop. It was a bad move, on my part to add the pair trade.

I wish I had put a short on RIO as the price movement was significantly larger... But I wish many things.


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## adamim1

Took half profit in NAB. 

Doing the same with ANZ and WBC when they reach targets


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## tech/a

Emotions they can be a killer to profit (sure I know its only half!).
All you have to do is place your stop at B/E then hang on!
But hey youll learn.


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## adamim1

My stops are at entry. I did this before close yesterday.

I'm thinking about taking half profit in WBC + ANZ now, though they're not at target.. they seem to be getting further away.


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## adamim1

Got stopped on all three trade. Small profit.


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## adamim1

I got on short contract last night on Sp500 @1303 with a stop at 1318. My thinking is that this could be a false break of the previous high back in late October, although I am aware this could take off as well.


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## adamim1

out of this trade. I was in the money few nights ago and pulled stop back to entry for the sake of decreasing the risk. Got stopped overnight.

I'm out of all my other positions too. I had shorts on NAB & MQB that I had been holding for 2 weeks. I made small profits on these two trades, but I am weary about where this market could go from here. I am thinking we may see 1350 or higher before the next down turn.


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## boofis

adamim1 said:


> Got stopped on all three trade. Small profit.




I don't want to come across like a nag, but a trading blog which doesn't mention why decisions are made or how one comes to a certain conclusion isn't super informative.
E.g.
Scenario 1: I bought and sold Rio today, made a handy profit.
Scenario 2: I saw an entry in Rio today BECAUSE of reasons A, B and C ...and then sold in the afternoon BECAUSE of my plan which says X, Y and Z will happen before I sell...

My intention with commenting is purely to get you to divulge more info so I can see whether I can learn anything from your methods or not. I'm not trying to be attacking, I merely want to analyse.


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## adamim1

boofis said:


> I don't want to come across like a nag, but a trading blog which doesn't mention why decisions are made or how one comes to a certain conclusion isn't super informative.
> E.g.
> Scenario 1: I bought and sold Rio today, made a handy profit.
> Scenario 2: I saw an entry in Rio today BECAUSE of reasons A, B and C ...and then sold in the afternoon BECAUSE of my plan which says X, Y and Z will happen before I sell...
> 
> My intention with commenting is purely to get you to divulge more info so I can see whether I can learn anything from your methods or not. I'm not trying to be attacking, I merely want to analyse.




Some of the trades that I make are not based on my thoughts. Obviously I put the trade on but if its from my subscription I just do as I am told.

But yes, I should be more specific.

The two bank trades were from my subscription. I exited them on my own account because I've been sitting on a lot of trades over the past month waiting for targets to be hit (and being in the money as well), only for it to come back and stop my out (at entry). I don't mind this happening usually, but I could see this rally had some strength and rather then make nothing, I decided to take some money.

The SP500 trade was a fairly aggressive trade (although i didn't risk much). Once I was 10 points in the money I thought I would limit risk altogether and move stop to entry.


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