Archive for May, 2009

I am going to take in mid June a month of work. First of all I need a break and to do something else. Second I want to feel how is it to be a ‘Real’ trader that eat and breath the market all day long.

My target in this month is quite ambitious to take £2000 and make them £20000. In other words I want to make 1000% in just one month. For doing that I will use 4 strategies:

1) Going with the trend – By using tight stop loss, try to ride on a daily trend. The idea is simple you may lose more trade than you win but those you win will generate big profit.

2) Over sold / over bought – try to guess where the market is going to change direction and then buying on the opposite direction. For example if on a day the market is going down strongly, I will try to understand where is the turning point and open a long position. With this strategy there is no stop loss and I limit the profit for 100 points on the Dow.

3) Entry point. Open a position, long or short it doesn’t mater without a stop loss and with profit limit of 100 points.

4) Buying an option. Buying an option that are close to the money and wait for it to double. For example if the Dax is 5000 then my plan is to buy the 4900 put

It will be interesting to see which method will generate more profit. I will keep you updated

I took advantage of the latest rally and sold all of my shares:
Tesco, Royal Dutch Shell, Dana petroleum and BAE.

I do feel that this current rally is more like wishful thinking than a real turning point. Yes the media has lost interest in the current recces ion and they are already looking for green shoots, but I honestly believe that the problems are still here. Central banks all over the world give free money (0% interest rate) and these was the reason why we had the global crises in the beginning. Money was very cheap in the last 6 years and it is very cheap now.

This will take inflation to rocket high and although it is very good to my mortgage is not very good for the economy. And I also feel that something has been changed with people. They don’t happy to spend as they used to. You see less people taking flights or buying new cars.

So I may be wrong and the rally will continue over the next month, but I feel that it is better for me to protect my profits and sit on the fence for a while.

Because you won’t see the money…
I opened an account with them called them twice to confirm that my account is qualified to the cash back offer and twice I’ve been told I was.

So I put money and did one trade with this offer in mind. I would never else open a position on the DAX with just 25 points stop loss. Because it was more like a bet than a trade I lost which is fine.

I called worldspreads, the company that you always talk with the same person, and asked my cash back. They say no problem but nothing happened. I’ve waited 3 days to call them again and they promised me that it will be sorted on the same day. Nothing happened again. I waited 3 more days and called them today.

And their answer:
Due to the terms and condition you are not qualified to this offer. Good bye.

But I had enough. I wrote a long letter to the FSA the financial authority that should govern these companies and copied the Guardian and the Independent newspapers. And now you know about it too:
Don’t open an account with Worldspreads because there is a good chance you won’t see you money back. And also they have one of the worst platform out there.

Hi all,

IG Index has a new website and from first impression it is a big improvement from the old one! There is a new section about market update so you can get the news in one place without searching for it on the net.

The design of the site is nicer. They didn’t change the platform deal though. As I always say it is one of the best platform out there but also the ugliest! I don’t know what about you but I really don’t like to sit in front of it more than 10 minutes.

Hi all,

I am not a big fan of stop loss. I think they make you lose money. So I don’t use them. But today I had sometime and I decided to use Worldspread offer of £250 cash back.

I saw the Dax up strongly today and I know that the 4950-4975 is the upper resistance at the moment. So I opened a position to sell the Dax on 4946 with 25 points stop loss – £10 a point.

At one point I was £150 up, but my target was £1000 or 100 points. But an hour later the Dax was strong again and peaked 4978. I was out. 2 hours later it was 4900… and the again it was up to 4975 and down again.

25 points stop loss is a joke. If you really serious about trading and you still want to use stop loss then use 200 points on Index like the Dax. Otherwise you will be out before you know it.