Ok, typical Newb here - plenty of research on this site which has led me to realize I have no idea what I am doing!
I would really like some of you more experienced campaigners to tell me exactly what I am 'leveraging' here as I seem to be using my own money??? - and all the other misunderstandings I may have!
Many thanks in advance - please be nice with your flaming though!!
I first learned about CFDs through a friend late in 2012. It seemed too good to be true as these things always do, but my friend made it quite clear that a 'big loss' was not out of the question, ie. it is GAMBLING.
With this in mind I thought the best route to take would be an IG demo account and to see how it went. I ended up doing probably 4+ demos with IG Aus and even Sing for a comparison (seems the leverage is super different, wasn't able to buy anywhere near the same number of contracts on Sing even with about 5x the real 'virtual Demo-money'. Anyway, I think I may have lost on the first demo, but I 'won' on all the following ones and so thought that I'd give it a try.
* Disclaimer - I enjoy mathematics, and am quite comfortable sitting up late at night staring at a graph(s) - however I am a terrible gambler (so I don't) and I barely know the difference between a derivative and a stock.
Anyway, I began a humble IG account with AUD5k and took the plunge. My weapon of choice seems to be Wall St ($500 contracts), after a brief affair with BHP and Rio on the FTSE where I learnt that for me, spread trumps commission. I based my trading on the current trend (bull/bear if I can!) and Bloomberg amongst other things like expected news for the day, and some of my own attempted interpretations of the current movements of the graph.
I think I increased my account up to around 8k before I took out 2k and then managed to make a 'newb' click-error and accidentally closed an open position which was a fair way down losing $900. After this my confidence was a bit struck and I aborted a couple of the few 'strategies' I had, and made a few other small losses (not totaling much more than $100), and at this point I was quite confused. I genuinely didn't know whether to get out and just quit while I was ahead (the account would have been around $4,700 at this stage), but I decided to keep going.
I managed to regain composure so to speak, and get back to my rules and have managed to raise the account up to just under 10k after having withdrawn a total of almost 4k - and all of this in about 5 weeks.
I believe there is no 'magic' here and my rules are pretty simple.
1. 1 500-dollar Wall St. position (DJIA) for every $5000 in account size.
2. Target revenue range on one position: $100 - $1000 (based on current situational-risk)
3. Do NOT sell.
4. Do NOT close in the RED
5. Don't plan to stay in over night, but...
6. Chase a falling graph in a positive environment with further purchasing (build this into initial contract size)
7. Be prepared to hold - up to a week.
That's about it really. I have only just started using limits and they have worked for me as much as against me - but I think I am getting better there. I am not a big fan of the 'stop loss' or whatever it is called as my 'strategies', if you can call them that..lol, require holding positions which have fallen a long way until they come back. I also often have Germany30 open as it seems to correlate well, and I want to have a go at that in the future as the movements often seem to suit me.
Now I can easily see that I am gambling, and there is a chance I could lose everything in the event of some freak crash (see the AFP-twitter-account-White-House hacking rubbish???) for an example of how easily things can go pear. So I believe I am limiting my risk at 10%, and as much as it would still hurt - I am only playing with what I can afford to lose.
After a bit of contemplation over this whole 'crash' thing I got to thinking: if I want to be in this for the long-term (which I do), and I live in a developing country where I don't need a large volume of big payments from the account - I need to reeeeealy minimize my risk. It seemed the prospect of the AFP-drop was not to be ignored and had to be factored in.
So I figured I will create a second account at IG and load it with 3k (30%) with the aim of building it to a minimum of 5k ASAP. I would never allow both accounts to be trading at the same time (at least in the same direction). My thoughts for this second account are:
1. It makes a good trading-backup. (I know banks provide interest but it means there is no trading downtime)
2. I would go back to my initial deposit is things hit the fan (Not really the end of the world)
3. I am not chasing millions, just a modest consistent revenue stream which is built to handle the odd unexpected-interruption.
4. I will obviously have to initially work to gain back the equity given to the second account.
There it is, this is where I am at and I appreciate the time you guys take to read this!
Advice is most welcome and flame away - but the more constructive the better
I obviously have plenty of reading to do - but I learn better on the job and also have a tendency to learn from my mistakes!
Cheers,
Newb to CFDs...
I would really like some of you more experienced campaigners to tell me exactly what I am 'leveraging' here as I seem to be using my own money??? - and all the other misunderstandings I may have!
Many thanks in advance - please be nice with your flaming though!!
I first learned about CFDs through a friend late in 2012. It seemed too good to be true as these things always do, but my friend made it quite clear that a 'big loss' was not out of the question, ie. it is GAMBLING.
With this in mind I thought the best route to take would be an IG demo account and to see how it went. I ended up doing probably 4+ demos with IG Aus and even Sing for a comparison (seems the leverage is super different, wasn't able to buy anywhere near the same number of contracts on Sing even with about 5x the real 'virtual Demo-money'. Anyway, I think I may have lost on the first demo, but I 'won' on all the following ones and so thought that I'd give it a try.
* Disclaimer - I enjoy mathematics, and am quite comfortable sitting up late at night staring at a graph(s) - however I am a terrible gambler (so I don't) and I barely know the difference between a derivative and a stock.
Anyway, I began a humble IG account with AUD5k and took the plunge. My weapon of choice seems to be Wall St ($500 contracts), after a brief affair with BHP and Rio on the FTSE where I learnt that for me, spread trumps commission. I based my trading on the current trend (bull/bear if I can!) and Bloomberg amongst other things like expected news for the day, and some of my own attempted interpretations of the current movements of the graph.
I think I increased my account up to around 8k before I took out 2k and then managed to make a 'newb' click-error and accidentally closed an open position which was a fair way down losing $900. After this my confidence was a bit struck and I aborted a couple of the few 'strategies' I had, and made a few other small losses (not totaling much more than $100), and at this point I was quite confused. I genuinely didn't know whether to get out and just quit while I was ahead (the account would have been around $4,700 at this stage), but I decided to keep going.
I managed to regain composure so to speak, and get back to my rules and have managed to raise the account up to just under 10k after having withdrawn a total of almost 4k - and all of this in about 5 weeks.
I believe there is no 'magic' here and my rules are pretty simple.
1. 1 500-dollar Wall St. position (DJIA) for every $5000 in account size.
2. Target revenue range on one position: $100 - $1000 (based on current situational-risk)
3. Do NOT sell.
4. Do NOT close in the RED
5. Don't plan to stay in over night, but...
6. Chase a falling graph in a positive environment with further purchasing (build this into initial contract size)
7. Be prepared to hold - up to a week.
That's about it really. I have only just started using limits and they have worked for me as much as against me - but I think I am getting better there. I am not a big fan of the 'stop loss' or whatever it is called as my 'strategies', if you can call them that..lol, require holding positions which have fallen a long way until they come back. I also often have Germany30 open as it seems to correlate well, and I want to have a go at that in the future as the movements often seem to suit me.
Now I can easily see that I am gambling, and there is a chance I could lose everything in the event of some freak crash (see the AFP-twitter-account-White-House hacking rubbish???) for an example of how easily things can go pear. So I believe I am limiting my risk at 10%, and as much as it would still hurt - I am only playing with what I can afford to lose.
After a bit of contemplation over this whole 'crash' thing I got to thinking: if I want to be in this for the long-term (which I do), and I live in a developing country where I don't need a large volume of big payments from the account - I need to reeeeealy minimize my risk. It seemed the prospect of the AFP-drop was not to be ignored and had to be factored in.
So I figured I will create a second account at IG and load it with 3k (30%) with the aim of building it to a minimum of 5k ASAP. I would never allow both accounts to be trading at the same time (at least in the same direction). My thoughts for this second account are:
1. It makes a good trading-backup. (I know banks provide interest but it means there is no trading downtime)
2. I would go back to my initial deposit is things hit the fan (Not really the end of the world)
3. I am not chasing millions, just a modest consistent revenue stream which is built to handle the odd unexpected-interruption.
4. I will obviously have to initially work to gain back the equity given to the second account.
There it is, this is where I am at and I appreciate the time you guys take to read this!
Advice is most welcome and flame away - but the more constructive the better
I obviously have plenty of reading to do - but I learn better on the job and also have a tendency to learn from my mistakes!
Cheers,
Newb to CFDs...
