9th June 2014 – Day 1
I started trading today, I added £1,000 from my current account to an online trading platform, I’d never heard of the website before but once I got over the initial visual impact of all the numbers I realized that it’s not actually that complicated. I set up a watch list with just three things on it, (Dow FTSE and what Nick calls Cable, that’s the UK pound against the US dollar to you and I called cable because the first transatlantic ‘cable’ was laid to carry the exchange rate data apparently) all I needed to be able to access and on Nick’s advice I decided to trade in the Dow (called US 30 on this platform) looked for some data to guide me where to start, I found a chart, the kind of thing I remember from Bloomberg on TV. It was largely meaningless to me so in the end decided that as it was near to an all time high it would likely go down from here… felt a bit like playing The Generation Game so went ‘lower’ and placed a sell trade of £3 per point at a price of 16,935.2 with a stop loss at £100 of loss and a take profit at £300 this ration was the first of Nicks ‘rules’ as it would turn out.
Out of curiosity I left the screen open and had a look around the platform. This is where it got quite interesting. Within a few minutes I was in profit, only £20 but I liked that I had already ‘made money’ and enjoyed telling Claire when she passed by… a few more mins and the trend turned and I was down 5 then 10 then 40 then £80. Hmm… Crap! Ok, not feeling very worried as it’s only £100 but wondering if I should just ‘cut my losses’ and ‘save’ myself £20 by cutting the trade out now… Nick raised his eyebrows “ that would break the ‘rules’ prove nothing and serve no useful purpose at all” so I left it alone and in fact closed my laptop and continued my chat with Nick for a couple of hours. Logged in again, UP £67. Well that’ll teach me to think of cutting losses, back in profit and lesson learned. I decided not to look at it again for the rest of the day.
First day trading for Ali, he’s picked up the mechanics of putting on trades and setting stop loss and take profit orders really well and seems ok with using the internet platform I recommended.
Interestingly, day one and he’s already looking at ways to break the rules I set for him. With a loss sitting at £80 he asked me if he should cut his trade there to save himself £20, he’s clearly ‘predicting’ that the market is going to go all the way to his stop loss level. Begs the question why have rules at all J I patiently advise him to close the platform and do something else, “the market will do what it does, don’t second guess it, you have your stop loss in place and your ‘take profit’ order so detach now and let’s see what happens”.
