An amateur starts a thread

chompdown · 20-07-2016 8:34am #1

Hello all. I am starting a thread here which will most likely end in a balance of zero, but I want to give it a go and see how it works out.

I will start with a balance of 1,000 and my spread betting positions will all be with a common theme of stock markets & commodities rising, and the dollar dropping.

I receive guidance on trades from a very successful traders club I am a member of.

The biggest killer of any amateur trader is a lack of discipline, and I am certainly guilty of that. Using boards.ie as a way to track my progress has been a great way to curb my over-enthusiasm on the gambling forum, so I will try it here also. Some basic rules for me to follow:

Starting balance July 2016: 1,000
Additional deposits: Max 500 per month thereafter
Markets: strictly limited to the S&P, Dollar index, Gold, Silver, Oil.
Positions: Strictly limited to one at a time.
Limits: my first position will be in the dollar index and my max stake is 1 point per 1,000. Other limits to follow.
Trades: Absolutely no day trading allowed. Buy and hold until I am advised to sell.
Long/Short: If I am long and advised to close a position as it is about to turn, I will simply close the position rather than be greedy and attempt to short it.

I receive guidance on trades from a very successful traders club I am a member of.

These positions are 'old turkey' which means I want to hold them longer term. I am sticking to markets with no funding charges.

I will post balance updates to this thread, and comment on any thoughts / challenges I have.

This thread is an exercise to attempt to improve my self discipline.

If my balance ever reaches 5,000 I may alter the rules slightly, but not before then!

I will have no stops in place

I will probably place my first this week!

chompdown · 21-07-2016 12:51pm

Quick update to say that my account is funded now and it looks like I will need to wait until next week before opening my first position. My guy says there should be further dollar strength until just before the FOMC meeting. Will wait until I get the nod.

Just to add two more max position limits.

Gold max 20 euro per point
Silver max 15 euro per point

I doubt I will be getting involved with the s&P or oil for a good while yet.

Francie Barrett · 21-07-2016 1:44pm

I tried something similar to what you're doing around the time of the Dot-Com crash 15 years ago, trading the NASDAQ, S&P and Dollar (as well as Sterling and Euro at times). I managed to keep my discipline with stops, but I think they ultimately contributed to my slowly bleeding my capital, especially during times of high volatility where you could have a position stopped out within minutes of opening it. It seems to me like trading either ends up with a slow bleed if you stay disciplined, or else a spectacular blow-up if you don't bother with stop losses. Either way, it seems very hard to win and I don't know anyone who makes it pay.

Sorry, don't mean to put a downer on your thread or anything

It's just I don't know a single person who has paid their way trading over a long-term period. I think buying stocks and holding is the better proposition, but would be happy for you to prove me wrong. Good luck.

chompdown · 21-07-2016 2:25pm

OK so today's report has been posted and my guy says that the intermediate cycle low for the Euro is very close and expected within the next week, so I have decided to short the USDX 0.2€ per point today, tomorrow, Mon, Tue and Wed. Only if I get the nod that the bottom is in before then, I will bring the trades forward. That will bring me to €1 per point and hopefully a decent average price near the low.

Starting balance: €973.14
First trade: Short USDX 0.2€ @ 97.070.

chompdown · 21-07-2016 2:50pm

Hi Francie, thanks a lot for your comments. You're not putting a downer on it at all

You're talking sense as the liklihood of this thread ending badly is very high.

Funnily enough, your comments about stops were only recently spoken about in the group I am a member off. The main man said that we should not have tight stops in place for long term trades, but to mitigate risk by having smaller stakes. I have no stops in place, but my stakes are too high and hence I will have to time this trade almost perfectly in order to get out of this alive.

If I am lucky and time the trade well and if my bank grows I plan to be disciplined not to increase stakes up to a point, and rather use that increased balance as a buffer against those high volatility days.

topper_harley2 · 22-07-2016 8:20am

chompdown wrote: »

OK so today's report has been posted and my guy says that the intermediate cycle low for the Euro is very close and expected within the next week,

I think this is my dislike for trying this approach. What crystal ball is the source of the information.....

BrokenArrows · 22-07-2016 11:34am

When trading currency what is considered a point? One cent?

chompdown · 22-07-2016 11:53am

Trade 2 just executed.

Short USDX 0.2€ @ 97.180

chompdown · 22-07-2016 12:08pm

@Topper, agreed yes it's v high risk to try and time any trade so precisely but with a starting bank of 1,000 I do have some room for maneouvre.

There is no holy grail of exact entries but I have been following one trader who has an extremely good record and now I am following him with his calls. He is a sentiment and cycles trader.

@Broken Arrows, it is actually per one tenth of a cent.

So at 1€ per point a move from 97.070 to 96.070 generates a €1,000 gain.

ixus · 22-07-2016 5:07pm

Trading on some other "guru's" advice is a recipe for disaster. I am wary this is a sales pitch.

You're short $, long commodities idea is essentially the same trade. If you don't know why that is you should figure it out.

Do you know what important $ is next Wed?

chompdown · 22-07-2016 5:32pm

Yes, there are a lot of clowns out there, even some criminals, and maybe this is not gonna work out, but I have outsourced my trades to someone who I believe knows more than me, and I'm tracking the success or failure of it here.

I know the FOMC meeting is next week.

And yes of course I know long commodities and short the dollar are basically the same thing, but you should also understand that they are not always correlated (positively or negatively), for instance the big move in gold this year came while the USD remained strong.

Your post is very condescending by the way. I am not trying to big myself up here, the opposite in fact!

poeticjustice · 22-07-2016 6:29pm

chompdown wrote: »

Your post is very condescending by the way. I am not trying to big myself up here, the opposite in fact!

Have to agree with this. No need to be condescending ixus.

Good luck with it chompdown. You have the right attitude anyway, it may all go wrong but at least you're prepared. Will watch with interest

ixus · 22-07-2016 10:19pm

As mod I am wary of you bigging up some random traders club punter and this being a way to recruit.

Saying you are entering and exiting trades with no stops based upon the advice of others is possibly the worst thing to do. Forums and twitter are littered with scams and people whonhave lost significant sums of money.

You had previously indicated no knowledge of anything related to a trade of a specific product other than the advice to enter or exit from someone else. I think it was fair to ask and warn you if you didn't.

Two days ago, I witnessed a twitter account with a 4/800 following talk about being balls deep long dax at 1040. £500 a point. Next morning the dax traded as low as 9910,.£65k or so loss. The user deleted all his tweets and didn't reappear until the dax was at 1050 the next day. Multiples of his followers took the trades on his bravado and took a beating.

chompdown · 22-07-2016 11:11pm

That's fair enough ixus. There are a huge amount of scams online for sure, even one I remember a huge pump on this very forum not too long ago, so I can see why you might be wary.

Anyway, I was just trying to be transparent by saying that I am not a know it all, very green, etc.

Here's my first update (which reflects that!).

Week 1 update
Starting balance: €973
Position: Short USDX (Sept) 0.4€ @ 97.125
Current price: 97.420
P/L: -€118 / -12%

Francie Barrett · 22-07-2016 11:49pm

ixus wrote: »

Two days ago, I witnessed a twitter account with a 4/800 following talk about being balls deep long dax at 1040. £500 a point. Next morning the dax traded as low as 9910,.£65k or so loss. The user deleted all his tweets and didn't reappear until the dax was at 1050 the next day. Multiples of his followers took the trades on his bravado and took a beating.

In fairness, Tw@tter is an absolute cesspit of ramping and lies.

iainBB · 23-07-2016 6:30am

chompdown wrote: »

That's fair enough ixus. There are a huge amount of scams online for sure, even one I remember a huge pump on this very forum not too long ago, so I can see why you might be wary.

Anyway, I was just trying to be transparent by saying that I am not a know it all, very green, etc.

Here's my first update (which reflects that!).

Week 1 update
Starting balance: €973
Position: Short USDX (Sept) 0.4€ @ 97.125
Current price: 97.420
P/L: -€118 / -12%

At least a screen shot perhaps that the standard way of showing actual results.

Your first week with this magic voice that tell you future price movement got it wrong. ?

chompdown · 23-07-2016 7:47am

I can start adding screenshots if I ever get in the green. Not much point faking a 12% loss in week 1.

Nobody knows the absolute perfect time to enter a position.

For ever odd · 24-07-2016 8:59am

DXY has had 2 weekly closes above historic 96.39 support /resistance level, also a weekly close above the 61.8% fib level.
Traders would be targeting 98.3/6 zone to the upside, while 96.39 and 50% fib level should offer solid support in any move to the downside.

Good luck.

For ever odd · 24-07-2016 8:59am

DXY has had 2 weekly closes above historic 96.39 support /resistance level, also a weekly close above the 61.8% fib level.
Traders would be targeting 98.3/6 zone to the upside, while 96.39 and 50% fib level should offer solid support in any move to the downside.

Good luck.

chompdown · 24-07-2016 10:26am

Cheers odd! When you put it that way, I need your wishes of good luck

The intermediate cycle high for the dollar is now set for Wednesday or Thursday, so my plan to slowly add to the position until the day of FOMC is changing slightly.

My max position before the FOMC announcement on Wednesday will be 0.5 per point (currently 0.4).

The top could come sooner but if the Fed raises, I will be thanking myself that I wasn't in too deep and will also have some funds available to add.

ixus · 24-07-2016 10:46am

I don't expect the FED to raise but, if they did, adding would be the last thing you should do. The $ move would be parabolic.

I see two scenario's; signalling for a move in Sept based upon current data and it staying on path for Aug or, dovish talk as they refer to Brexit and Geopolitical issues causing massive uncertainty. Given US data, they should to the former but then, Yellen....

Your short $ trade is betting the FED are dovish and/or that Bank of Japan don't launch a massive easing program on Thurs. Basically, the opposite of what's expected.

chompdown · 24-07-2016 2:35pm

I agree that a rate increase is unlikely. The Fed Funds Futures have a 96% of no rate hike. What is most likely imo is a hawkish version of no rate rise, a slight rise in the dollar leading to a high on Wed / Thurs and then that's it, the intermediate cycle top.

Bold prediction: By Friday I will be 1 per point short and in profit

Let's see what actually plays out!

chompdown · 25-07-2016 2:29pm

Trade 3 just executed.

Short USDX 0.1€ @ 97.470

BrokenArrows · 25-07-2016 2:47pm

chompdown wrote: »

Trade 3 just executed.

Short USDX 0.1€ @ 97.470

I must be missing something when it comes to spread betting but I don't understand what you're doing.
You are placing the same trade again and again just at different rates? Are you closing out your previous position and then making a new trade?

chompdown · 25-07-2016 3:02pm

Hey Broken, I'm planning to have a position of 1.0 Euro per point by Wednesday / Thursday.

As I don't know when the dollar will start to turn downwards I decided to buy into my full position in bits and pieces.

Now I'm holding 0.5 Euro per point and the remaining 0.5 will be added when it looks as though the dollar has reached its intermediate top and has started to go down.

Like I said earlier, this will very likely end badly!

BrokenArrows · 25-07-2016 3:27pm

chompdown wrote: »

Hey Broken, I'm planning to have a position of 1.0 Euro per point by Wednesday / Thursday.

As I don't know when the dollar will start to turn downwards I decided to buy into my full position in bits and pieces.

Now I'm holding 0.5 Euro per point and the remaining 0.5 will be added when it looks as though the dollar has reached its intermediate top and has started to go down.

Like I said earlier, this will very likely end badly!

Whats the point in doing that?
You're basically saying "im going to lose with the first .5 and then when i think im about to start winning ill invest the other .5".

If you have the ability to recognize when the "intermediate top" is then why not just invest the whole amount then.

chompdown · 25-07-2016 4:26pm

Because it is impossible to know for sure when the high is. It is most likely to be Wednesday or Thursday but could absolutely have been last Thursday, Friday or could be today.

I know exactly why you mean and yes in hindsight yes it looks like a bad move, but the high could easily have been a couple of days earlier than expected.

Francie Barrett · 25-07-2016 4:43pm

Tough crowd

chompdown · 25-07-2016 5:20pm

Francie Barrett wrote: »

Tough crowd

Ah it's the Irish way. Healthy scepticism! Imagine I was trying to big myself up!

BrokenArrows · 25-07-2016 6:00pm

chompdown wrote: »

Because it is impossible to know for sure when the high is. It is most likely to be Wednesday or Thursday but could absolutely have been last Thursday, Friday or could be today.

I know exactly why you mean and yes in hindsight yes it looks like a bad move, but the high could easily have been a couple of days earlier than expected.

Of course its impossible.
But your approach seems to be "keep betting on the same thing, its bound to turn around eventually".

If you're not confident in your first bet then why did you place it at all. By placing any money on Trade 1 it means you thought that that was the correct time otherwise you wouldn't have placed it.

chompdown · 25-07-2016 6:16pm

It's only week 1. I plan on holding these for at least a couple of months.

I am confident in my first bet. I have a stake in mind, 1 point, and rather than going all in at one price I wanted to average in a different prices.

I didn't expect the top late last week but I also didn't expect it to go much higher. I wanted to have some exposure to the Dollar already in case there was a drop.

Also, mentally it's quite difficult to hold off on opening a position when you have your account funded and you expect a big move. Discipline is something I really suffer with (hence the thread) and maybe a more disciplined approach to wait for the most appropriate point and then go all in would have been a better. It's a learning curve.

chompdown · 26-07-2016 6:26am

A celebratory moment this morning when I wake up to see all three positions are green

That calls for the first screenshot!

Pablo Escobar · 26-07-2016 7:03am

chompdown wrote: »

A celebratory moment this morning when I wake up to see all three positions are green

That calls for the first screenshot!

It's not the most diversified portfolio, is it!?

iainBB · 26-07-2016 11:48am

Pablo Escobar wrote: »

It's not the most diversified portfolio, is it!?

In fairness It is hard to get diversified portfolio with 1000 euro unless you use ETF.

chompdown · 26-07-2016 2:46pm

Trade 4 just executed.

Short USDX 0.2€ @ 97.047

"The dollar has formed a swing high".

Looking good!

chompdown · 27-07-2016 8:52am

Time for a quite update before the big FOMC announcement later today.

My current aggregated position is 0.7 EUR @ 97.152

The deathzone when I start getting margin calls is around 98.290

Current price 97.265

For ever odd · 27-07-2016 4:28pm

I don't think you will listen, but I have to say it anyhow.... Close or hedge your position.

Way too much firepower out there, this evening and early tomorrow morning, especially in USD/JPY.

If you are gonna make a go of this, one trade is not the be all and end all of the game. Best watch and start over again. Two things you need to get your head around...

1)It doesn't matter if your right or wrong.
2) it's all about not losing money.

Pablo Escobar · 27-07-2016 8:42pm

iainBB wrote: »

In fairness It is hard to get diversified portfolio with 1000 euro unless you use ETF.

True, but if you're making 3 trades.......

chompdown · 27-07-2016 8:58pm

Thanks for the comments lads. I had to be out and away from a computer this evening, but I was happy to see no surprises from the Fed. I have a lot of reading to do now to catch up on the day's events.

I'll then post replies to the comments above.

I was able to add Trade 5 during the sell off after the initial spike in the dollar, just 0.1 @ 97.395

chompdown · 27-07-2016 10:27pm

Pablo Escobar wrote: »

True, but if you're making 3 trades.......

It's one trade; short the dollar at its cycle high. The fact I bought into it with partial stakes every day doesn't really make a difference. I take your point though, and I would class this as a bet rather than an investment.

Also, the dollar index is a basket of currencies against the dollar so it's *slightly* diversified in that respect.

chompdown · 27-07-2016 10:36pm

For ever odd wrote: »

I don't think you will listen, but I have to say it anyhow.... Close or hedge your position.

Way too much firepower out there, this evening and early tomorrow morning, especially in USD/JPY.

If you are gonna make a go of this, one trade is not the be all and end all of the game. Best watch and start over again. Two things you need to get your head around...

1)It doesn't matter if your right or wrong.
2) it's all about not losing money.

I completely agree that I am dangerously overleveraged. I also agree with your other points!

I have written off the money already, but I still harbour some hopes that I have timed an intermediate cycle high in the dollar almost perfectly. My current position is 0.8 per point out of a max of 1.0 per point. As it stands now I will be wiped out at around 98.985. The dollar double topped at 100 imo and it's not going back there for a long time.

chompdown · 27-07-2016 10:49pm

Would anyone else be interested in starting a thread and playing with a bank (demo or real) of 1,000? Seems to be a good group here who know what they are doing and we could see how different strategies work for different people.

chompdown · 28-07-2016 12:34pm

The Dollar index has again dropped below the 200 day moving average, and I believe this is the beginning of a bear market in the dollar. Despite this, I will keep my stake at 0.8 for now. I have taken on board the comments on this thread and starting to realise how it is very important to stay alive, and not go balls deep, especially with such a small starting bank.

One thing that came up on this thread already is the use of stops. Did anyone see the knee jerk reaction to the FOMC announcement yesterday? Quite a nice little jump in the Dollar, and those with short positions and tight stops probably got stopped and missed on the subsequent large sell off.

More volatility expected tomorrow with the results from the European banking stress tests, and an announcement about easing from the Bank of Japan, so another reason not to go all in.

chompdown · 29-07-2016 8:31am

ixus wrote: »

Your short $ trade is betting the FED are dovish and/or that Bank of Japan don't launch a massive easing program on Thurs. Basically, the opposite of what's expected.

chompdown wrote: »

I agree that a rate increase is unlikely. The Fed Funds Futures have a 96% of no rate hike. What is most likely imo is a hawkish version of no rate rise, a slight rise in the dollar leading to a high on Wed / Thurs and then that's it, the intermediate cycle top.

So it looks like the amateur was spot on and the market was wrong, at least in round 1! Looking forward to my end of week screenshot... just need the Euro Stress tests to be nice and stress free

For ever odd · 29-07-2016 9:26am

July 22, 2016 at 3:00 AM
Copper at neckline/resistance on weekly chart.

Any retracement in dollar, and I will look to buy around the 96.3/5 area for third and final entry to dollar long.

Took short Yen at 106.5 a weekly close below this level...

Still long US - Short Europe equities, but getting itchy fingers, will give it another week or two to evaluate.

Edit

July 22, 2016 at 4:39 AM
Yen: Short USD/JPY @ 106.5

Posted the above last week on another site. We are on different sides of the trade, but I don't swim naked.

chompdown · 29-07-2016 4:11pm

Good to hear! Could be an interesting couple of months ahead if you stay on the other side of the trade. You may have been stopped out already today though.

I'll offer some advice now - the yen and the euro have bottomed against the dollar this week. Do not go long the dollar. It will gradually make its way lower over the next weeks and months.

I may be a total novice, especially when it comes to trade sizes, discipline etc, but with the guidance I have, I am confident my directional calls will be more often right than wrong.

dasdog · 29-07-2016 4:18pm

chompdown wrote: »

So it looks like the amateur was spot on and the market was wrong, at least in round 1! Looking forward to my end of week screenshot... just need the Euro Stress tests to be nice and stress free

Well done, I say you enjoyed today's GDP also.

For ever odd wrote: »

July 22, 2016 at 4:39 AM
Yen: Short USD/JPY @ 106.5

Hi FAO,

With 102.5/6 support now broken it will hopefully clear the way down to 100.48 (2 week low) where I have my TP.

chompdown · 29-07-2016 4:25pm

dasdog wrote: »

Well done, I say you enjoyed today's GDP also.

I really did, yes

3/3 so far. The stress tests are the only slight worry now.

ixus · 29-07-2016 7:30pm

Strong EU bank stress test should result in stronger euro. Euro looks like retracing brexit, similar to equities at this stage.

chompdown · 30-07-2016 7:30am

chompdown wrote: »

Bold prediction: By Friday I will be 1 per point short and in profit

Let's see what actually plays out!

Well the weekly results were way beyond my expectations, with a lower than expected stake too. I was also able to increase my aggregated price. Here's the update.

Week 2 update
Starting balance: €973
Position: Short USDX (Sept) 0.8€ @ 97.182
Current price: 95.540
Current balance: €2287
Weekly change: €1431
Total P/L: €1313 / 135%

For ever odd · 30-07-2016 8:44am

Nice one! Enjoy.

An amateur starts a thread

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