Diary of a Novice CFD Trader

[waza1960]

Thought I might give a insight to my experiences into CFD trading which I have being involved in for 4 weeks now, hopefully for the benefit of anyone starting to trade cfds.

 

[ozymick]

hi

Would be a great idea Waza.

I am looking forward to reading your posts


Michael

 

[CanOz]

Me too, looking forward to it. I've been trading CFD's for about the same time. I definately can give advice on what NOT to do..LOL!

Cheers,

 

[Holdon]

Double check every order you want to place, mistakes fortunately made me some money but it could have gone the other way quite easily.

 

[waza1960]

I might start with a little background have traded Shares personally and in smsf for last five years and options for the last two all successfully. I read books and magazines for last three months on CFDS.This thread is inspired by Catherine Daveys Book "Making money from CFD trading". Catherines' Book for those who haven't read it takes the form of a trading Diary and deals I think very honestly and candidlywith the emotional ups and downs of trading .So after reading the book I felt I had the discipline to trade CFDS with reasonable confidence and in hindsight I was probably a little overconfident (being a male did not help) So my first step was to find a cfd provider after checking the forums and checking their different trading platforms I decided to go with IG Markets which I have to say so far have being very good.I put 5k into the account to start with and another 5k a few days later.I guess I was a little cautious transferring money to somebody whom I had no prior dealings.Anyway I was happy to start with 10k and see how I went.I felt I started with good money management rules and I have never traded without a stop loss and never will and to date I have not used Guaranteed Stop Loss which just seems too expensive.

 

[R0n1n]

Are you gonna start a blog or post ur diaries here?

 

[waza1960]

Just post here.

 

[waza1960]

First Week Summary: I had a profit of $3553.50 a Win/Loss Ratio of 2.25:1 Profit Breakup was FX CFDs 2.23% Aussie Index CFDs 76.7% and Share CFDs 21.07% .I had 26 Trades for the week.My first Mistake was confusing the Value of Mini Index and Buying Long 10 Contracts and being stopped out for a loss of $600.I didn't make any other mistakes that week and my maximum single loss on a single trade apart from mistake was $220.Life experience told me this was too good to be true making this sort of money in a week but human nature took over and I was really happy and looking forward to more CFD trading and more profits.Unfortunately the next three weeks after were all down.Obviously one major mistake which I didn't realise I was making then which I am sure the more experienced traders will point out was that I was risking too greater percentage of Account on a single trade

 

[Uncle Festivus]

Too much on one trade - maybe - depends what your stop loss regime is I guess. Out of interest, what is your entry/exit criteria for the Index cfd's? I trade the index's exclusivly, more profitable.
My tip - try not to overtrade after some good wins - don't stretch the luck too far

 

[waza1960]

Was using Indicator entry and exits as well as support and resistance.

 

[waza1960]

Week 2 Summary: Started off by requesting payment of 1st week profit of $3553 which was deposited into my account following day.Lost $2905 day 1 mostly on the index putting too much faith in fundamentals and not on trend how many times does one need to be told trend is your friend and ignoring it but in my defence i was buying on short term trend and ignoring longer term.Ended up -$1409.00 at end of week.Had 30 trades win/loss ratio .88/1 max profit on trade $1225.00. max loss $440.Stupidly after first week increased amount at risk per trade which in hindsight was already too high.By the way all these trades are intraday or two days max.

 

[waza1960]

Week 3: (Short Easter Week) down -$2587 for the week .17 Trades.Wins6/Loss9 Max Loss on individual trade $480 Max Profit on individual Trade$875

 

[waza1960]

WEEK 4: loss for week -$5590.25 win18/Loss 33 most losses on index max loss $1125 max profit $1805.Made many mistakes lost discipline.

 

[waza1960]

And finally after disasterous week 4 am disappointed and down with results of my start to CFD trading. But will review all trades.Learn much more technical analysis and am now even more determined to eventually succeed.Will Transfer 1st weeks profit back into account.Lessons learnt:Stick rigidly to smaller % of account for individual trades.Always follow Trend it seems you must actually make this mistake before it sinks in.Do not overtrade.Do not overtrade CFDs at expense of other Derivatives.Stop trading after down 50%of orginal balance.So there you are probably should have titled thread everything you should not do trading CFDs lol

 

[professor_frink]

And finally after disasterous week 4 am disappointed and down with results of my start to CFD trading. But will review all trades.Learn much more technical analysis and am now even more determined to eventually succeed.Will Transfer 1st weeks profit back into account.

I'd highly recommend you don't do that waza. Out of 10K you deposited before you started, you've lost most of it already. What makes you think you won't lose the rest if you put your first week's winnings back in your a/c?

It sounds like you may be better off doing some real time papertrading to try and fine tune things. Then when you have established that you do indeed have a workable method, deposit the money in and try again.

Just my worth

 

[waza1960]

I was only going to redeposit profit into account as a pschological boost will not trade cfds until I learn more.Will slowly build account back up to 10k using profits from options.but thanx for the advise agree wholeheartedly

 

[bingk6]

I was only going to redeposit profit into account as a pschological boost will not trade cfds until I learn more.Will slowly build account back up to 10k using profits from options.but thanx for the advise agree wholeheartedly

If you are confident with building profits using options then why use CFDs. Stick with what you know and are successful with. If you are really good at it, just stick with it. At the end of the day, you are trading to make money, not to show people that you can trade a dozen instruments. Resist the temptation to keep looking for greener pastures.

Just my

 

[waza1960]

I like the flexibility of CFDs and won't give up on them until I master them.I also like trading multiple products.Its just that I need more education and experience but I won't give up but you are right if my personality was different it would probably be wiser just to stick to what you know

 

[woodrel]

Interesting read waza1960. I have been trading CFD's for around three months after 5 years of successful equity trading. I am currently around even on my CFD trades after making some silly errors at the beginning and then getting hit at the end of March. I am writing a personal blog too which I haven't 'released' yet. It's a diary of my thoughts, feelings and trades and how I am managing in this very strange game. I recommend writing and reviewing a trading diary. It can really help when you want to go over your successes and failures and to see where you might be going wrong.

 

[Tech_king]

Good luck with your cfd trading. I have only tried it once on a new trading platform with no money at risk, i made 50K with it, but they just don't seem my cup of tea!

When i started trading i had a few wins like most i guess, then it is funny because (well not funny really!) but like it seems most people including i not knowing enough, breaking the rules i set, even after i reviewed them, broke them again only to have a $15000 loss.

I started again 6 months later, after a short break thinking of why i lost, then paper trading again. I learn't alot of why i had lost, and intern gained 200% more dicipline!! I have now erased my loss completly and am now well into profit trading full time.

It takes patience but if you are committed you will eventually get there with any form of trading!

Good luck getting back on the bike after your falls!, when you have healed of course!