A little while ago I posted a thread discussing CFD providers. Originally I was going to go with CMC but eventually I changed this to IG Markets. Their charting is much better and although it doesn't seem as simple as CMC I think that IG markets platform is much better.
I thought I would start a blog of a relatively new trader in CFD's. I think it may be a good resource for people looking to trade CFD's for the first time to see what its like.
Originally I was going just to invest in gold and silver (mostly silver) however I've since signed up to Slipstream trader and going to move into stocks as well.
Initial investment: $8000.
My first night trading was wild (trading silver), but it was good experience. After massive volatility I had been up and down all night, however after it calmed down I was able to be patient and buy at the bottom of a massive spike (at 1am). If anyone follows silver closely you can sometimes see 50c or more drops in seconds, its not a good thing if you had a long position slighty above...it can hit stops a $1 away in seconds.
This was put on a friday night and by monday morning I was up 11k. My total risk on the trade was $1250 (25pip stop). I eventually moved the stop loss up and took profit at $8500. Not bad for the first time - BUT THIS WAS JUST LUCK.
Unfortunately after that trade my confidence grew rapidily and I eventually (after a week or so) lost that $8500, but still had my original $8000.
Since then I signed up to slipstream and have managed to do well out of it, so far I have made back the initial investment (1500) + a bit more). I think signing up to a subscriber is well worth it if you're going to be in highly leveraged positions as you gain a lot of knowledge by watching the video updates. I also have a David morgan subscription, but hes a seasonal trader so theres not many updates.
I did manage to get up 3800 (through slipstream picks and a silver 1/2 contract) but eventually the silver let me down and I pretty much broke every trading room - i let emotions take over and was back down to my intial investment in less then one hr. Good lesson learnt here.
The last 4 weeks have been a huge learning curve and I've actually started to learn from my losses and mistakes. I think you need to lose money before you can start learning.
starting this week Ive changed my strategy - especially in silver. Before I was trying to get into a core position and the massive seasonal rally, but this is proving to be difficult, costly and greedy. I now am taking a different approach. I will now be patient and buy into what I think is a solid buying opportunity and take profits where possible. I will be limiting risk wherever possible.
- firstly my first priority is to trade to not lose money - im not thinking about profits.
- I am moving stop losses to buy in price upon 25pip moves and using smaller contracts to limit risk as much as possible
- I am setting targets to take profit, not leaving it opened ended like before. The profits will be much smaller but I think its much safer to take profits where I can rather then watch it go up and then shoot down - seen it countless times.
- Be more patient! Its hard to wait for a good position especially when its volatile and in the middle of a rally. But patience will get me in a safer position.
- I am not going to be buying in massive volatility.. as much as I want to.. its just not worth the risk. The only time I will take a small contract out is if there a massive down spike (these only last a couple of seconds and if you get one you can make 40-50c in 30 seconds)
- I will still keep my slipstream trader picks, but I limit risk as much as possible and try not to take his higher risk ones.
Last night was my first night trading these rules, I was lucky enough to get a down spike and caught the bottom. I pretty much got out 90% from the top after 2min and made myself a quick $670.
Will update on the next trade.
Also I am happy for any suggestions questions.