Gday.
Have been interested in Stock market
Since High School Economics Classes... 27years ago
Have been Studying a couple hours per night since April 2017.
Paper Trading Since June 13 and Also on the ASX Game making reasonable profits after a bit of drawdown from overtrading , no patience etc...
Longer Term plans 10 years max. are to Make majority of income from trading , being supplemented by My Self employed Tradie income
MId Term: 1year + is To supplement my Tradie income, and grow capital assets to Size large enough to achieve Longer Term Goal. Will have 1 CFD acc to Start.
2 accounts When Capital Reaches Amount Large enough to Split.
Another 3rd CFD Acc For "Pocket Money" for new golf Clubs ,Holidays etc
At each pre determined level of Profit I will be Transferring Funds into a Standard Broking Acc. ie $5 or $10 K at a time .
May also Look into Forex , Gold futures , etc later
Short Term .. Trade Small CFD acc as a way of learning with "real money"
Reach B/E with acc and also deposit a bit at a time to gradually move to larger Pos Sizes
gain Live experience with little to no Stress .
Build account with what the market provides.
The Risks and their management.
So Starting with a $1000 acc.
If I lose this I wont lose sleep.
Of Course I would be disappointed but would hopefully learn from mistakes.
Now I could trade up to $ 20000 with $1000 using 5% margin .[Don't do this!!]
But nothing left for margin calls and quick way to get your account closed !
Your broker does not want to have to chase you for margin!They will close your trade before that happens if they have the time!
So Will be using 5-10% margin Stocks with the same % left in Free equity for Margin Calls.
Therefore a 10% margin Stock will have 20%[ 10%+10%] in margin for the dreaded Gap Down.
This also means that The account will only ever be 50% in active margin with the other %50
Ready for any nasty crash or big gap down of one Stock
Remember CFDs are Risky , The above Should be enough to make you think about the Risks and assess for yourself if you can tolerate losing you entire CFD account in one Bad Day.
eg market collapses in USA overnight and Most ASX Stocks Drop 10-25% on open nxt day.
Scary thought ,but possible.
So To Start I will be risking 8% of account or less per trade + costs which will be at least $20
in /out. + finance costs. so about 10% Risk per Trade!! High Risk Trading!/Gambling !?
Stop Trading if acc gets to $500 and re assess.
This will give position Sizes of around $1500 - $2500 . I figured this is a good min size as costs will be around 1% so not to eat up too much in profits and only add 1% to losses
Cost s cans Skew P/L Ratio too much if they become too large in relation to pos size.
As acc grows position size will remain the same until Risk is down to 2% of acc
ie. as account grows risk reduces,but trade number can increase or higher margin stocks traded
So $80acc risk + $20In/ Out ...Finance about $5 Average =$105 Risk per trade
This is 2% of $5250. After This, pos size can grow with acc.
Have been interested in Stock market
Since High School Economics Classes... 27years ago
Have been Studying a couple hours per night since April 2017.
Paper Trading Since June 13 and Also on the ASX Game making reasonable profits after a bit of drawdown from overtrading , no patience etc...
Longer Term plans 10 years max. are to Make majority of income from trading , being supplemented by My Self employed Tradie income
MId Term: 1year + is To supplement my Tradie income, and grow capital assets to Size large enough to achieve Longer Term Goal. Will have 1 CFD acc to Start.
2 accounts When Capital Reaches Amount Large enough to Split.
Another 3rd CFD Acc For "Pocket Money" for new golf Clubs ,Holidays etc
At each pre determined level of Profit I will be Transferring Funds into a Standard Broking Acc. ie $5 or $10 K at a time .
May also Look into Forex , Gold futures , etc later
Short Term .. Trade Small CFD acc as a way of learning with "real money"
Reach B/E with acc and also deposit a bit at a time to gradually move to larger Pos Sizes
gain Live experience with little to no Stress .
Build account with what the market provides.
The Risks and their management.
So Starting with a $1000 acc.
If I lose this I wont lose sleep.
Of Course I would be disappointed but would hopefully learn from mistakes.
Now I could trade up to $ 20000 with $1000 using 5% margin .[Don't do this!!]
But nothing left for margin calls and quick way to get your account closed !
Your broker does not want to have to chase you for margin!They will close your trade before that happens if they have the time!
So Will be using 5-10% margin Stocks with the same % left in Free equity for Margin Calls.
Therefore a 10% margin Stock will have 20%[ 10%+10%] in margin for the dreaded Gap Down.
This also means that The account will only ever be 50% in active margin with the other %50
Ready for any nasty crash or big gap down of one Stock
Remember CFDs are Risky , The above Should be enough to make you think about the Risks and assess for yourself if you can tolerate losing you entire CFD account in one Bad Day.
eg market collapses in USA overnight and Most ASX Stocks Drop 10-25% on open nxt day.
Scary thought ,but possible.
So To Start I will be risking 8% of account or less per trade + costs which will be at least $20
in /out. + finance costs. so about 10% Risk per Trade!! High Risk Trading!/Gambling !?
Stop Trading if acc gets to $500 and re assess.
This will give position Sizes of around $1500 - $2500 . I figured this is a good min size as costs will be around 1% so not to eat up too much in profits and only add 1% to losses
Cost s cans Skew P/L Ratio too much if they become too large in relation to pos size.
As acc grows position size will remain the same until Risk is down to 2% of acc
ie. as account grows risk reduces,but trade number can increase or higher margin stocks traded
So $80acc risk + $20In/ Out ...Finance about $5 Average =$105 Risk per trade
This is 2% of $5250. After This, pos size can grow with acc.
