6th December

Trading – I’m a slow learner

Hi John

I’m not sending you an analyser this week as I was most demo’ing and trying to find my feet with Deal Book.

Yesterday I traded with Darren and will go back to spending time with him. I bet you have this huge question mark over your head but here are my reasons. When I traded with Darren before he used to go into trades that made little sense to me. Sure he made money but he also lost money. Since he’s been on the Dealbook he’s been trading differently and I spent yesterday afternoon watching him. He’s really fine tuning what he’s doing now and I admire him – I have always admired him but I can see he’s had this revelation and the effect it has on his trading. I still want to enter trades on my own but I think it has finally sunk in with me why I am making these losses.

1 I enter trades too late – that’s my hesitation and also fear of being wrong
2 I buy at resistance and sell at support. Darren and I were both guilty of this previously but he’s worked out we need to sell at resistance and buy at support. I have lost money doing the opposite. I look for a breakout which doesn’t necessarily come and then I enter a trade thinking it will continue in the direction its going and wham it turns and hence my losses of 20 pips as it goes against my stop

I now have to practice getting in at the right time and heading in the right direction. Right now my trades are hit and miss. I need to let the MACD work better for me. Yesterday we did the Dow. I tried to enter a live trade but it gave me a different response to what it does on the demo and I cancelled the order. I am glad I didn’t go in as it would have gone 30 against me before bringing me into profit. I had tried to buy at resistance. Darren did the same. He managed to hold on till he broke even and then afterwards we saw it was at resistance and we should have sold and not bought. Sure it did return and then broke the resistance and went on into a beautiful rally upwards. However I’d have baled at 20 and made a loss and not let it turn and go in my direction. Fear.

The Dow is definitely the way to go. I’m picking up points there I never did before. It is very volatile and I need to be sure of a good run as I found that when I demo the volatility is such that when I try to get out in a profit by the time it lets me out I’m in a loss. I have a strategy for getting out that I want to put to the test on Deal Book. I can see the importance of the stops with the Dow – on any trading really but especially with a volatile market like the Dow. There are a few things that don’t make sense with the Deal book. For instance, every time you enter a one click you need to then reconfigure the ticket to allow for 1 click. It let me in the first time and then when I tried to sell it took me through two clicks before I got out. This cost me valuable points. When I had a run of 27 points and I wanted to get out it took me out at 21 points loosing me 6 in the process of getting out. Now I can’t work out whether this is my internet connection or if the volatility doesn’t allow me to trade shorter runs and therefore boots me out at a loss. It happened three times in a row and the 4th time I was so well in profit I was able to get out in profit. This is still on the demo.

The Dow compared to currency is so interesting. Darren and I compared a candle on the Dow to one on the Euro. The Dow’s candle was 20 points and the equivalent on the euro was between 2 and 4 pips.

I think although I so want to go into real time trading I need to go back to the Demo for a few days to get the entries and exits right. I’m so keen to trade but until I can get to grips with Dealbook and my entries etc I am going to be throwing money away as I’ve been doing. I will stay at £1 a pip and if I see a good rally up or down I will enter the trade and let it work for me but I need to perfect a few things. So back the course again. I can see where Darren learned a lot from watching you trade. Nothing comes close to watching a master at work. I will have Dealbook open on my desktop pc as the live account and the demo on my laptop. That way I can practice the shorter runs with s+r and enter live the longer runs and have the time to put in stops and manage my trade without getting into a flap. If my internet connection doesn’t allow for serious volatility then I will need to be content with longer runs that will give me leeway either side. There are enough good trades for me to wait for them. Yes I hear you say don’t sit in front of the computer but until I get this system licked, I have to spend time practicing.

Yesterday I committed a cardinal sin. I entered a trade on the Euro as it shot up – two lessons learned. I should not have entered this trade because it went up so fast that I was mesmerised by it and forgot my stop. When it reached the top – over 30 pips away I tried to get out. It took my deal ticker away and replaced it with a green box. Nothing happened for quite a while and I thought ok I’m nicely in profit. NOT. About a minute or more later it came back with a re-quote of negative 39 pips. Looking back all the markets moved at that point and I guess I have no idea why but maybe it wasn’t a good time to trade. Had my stop been in place I’d have been ok. I feel safe with stops but this one went so fast it took me by surprise and only afterwards did I reprimand myself for being an idiot and then I closed VT and went out and had my hair cut.

I felt so low about yesterday but today a new day I have new insight and ready to try again. I’ve recognised my stupidity and now can work on getting it right. I learn something new about myself every day. In the past I’d have chucked in the towel but not now. I have found a career that can work for me and I want to get in on it. I’m so grateful to have you and people like Darren and Leigh and my son to support me.

Hope you got back ok and your wine nicely stored in your cellar!! Its cold here and I’m about to head out for a walk. The pavements are scarily slippery. Hey, I may be in Japan for Christmas. Leigh is in Tokyo and the loads are so wide open I can go along. So it will be nice not having to spend a lonely Christmas on my own in a country where I don’t know anyone close-by.

John, have a good weekend and we’ll chat on Monday. I’ve given my CMC account and money to my son. He can’t afford an account with Dealbook but I’ve left just under £300 in my CMC account for him.

Cheers for now

Desiree