Firstly Hi to everyone complete Newbie here- so forgive if this post is in the wrong place and for any stupid questions ............so here goes!! I have been trading a few weeks, basically scalping and generally getting the feel for things, however am I on the right track, Only using a £2 stake at the moment an my returns are understandably low.when I make a mistake £2 is wiped off and its a hard slog to get it back. Is this me as a newbie or is this generally what happens. I only ask as I have enjoyed things so far but as i get somewhere ( yesterday placed about 25 trades built up £3-4 profit and then £2 goes on a mistake or wrong judgement) Is the £3-4 profit good on £2 stakes considering most returns are between 15-30p ? Any help/ideas/criticism great fully received,
Thanks
Full Chat
Basic First Trades
Hi Full Chat, welcome to the forum.
It is fairly typical for new traders to experience what you describe. I spent my first year or more breaking even or making small profits. I only really became profitable after learning to cut my losses when a trade goes against me and avoid opening the disastrous trades that were responsible for my losses.
Scalping can be like backing long odds-on horses, you win most of the time but the loser wipes out your profits. Scalping works well in strong, stable markets that have a fair amount of liquidity and the prices don't change much, but it can be disastrous in the lower-grade, more volatile markets.
Have you thought about swing trading? While you're on £2 stakes it's a good time to experiment.
It is fairly typical for new traders to experience what you describe. I spent my first year or more breaking even or making small profits. I only really became profitable after learning to cut my losses when a trade goes against me and avoid opening the disastrous trades that were responsible for my losses.
Scalping can be like backing long odds-on horses, you win most of the time but the loser wipes out your profits. Scalping works well in strong, stable markets that have a fair amount of liquidity and the prices don't change much, but it can be disastrous in the lower-grade, more volatile markets.
Have you thought about swing trading? While you're on £2 stakes it's a good time to experiment.
-
ShaunWhite
- Posts: 9731
- Joined: Sat Sep 03, 2016 3:42 am
In simplistic terms, scalping is taking one or two ticks, swing trading is taking more.
You mentioned using £2 stakes so how are you managing to lose £2 on a trade? Are you forgetting to close your position? If you're scalping for one tick, you really shouldn't be having any loses more than 2, possibly 3 ticks.
The fast interpretation of situations and the fast reactions needed to prevent disproportionately large losses are why imo scalping isn't the best introduction to trading for a newcomer. Swing trading gives you much more time to actually watch how markets work and to respond.
You mentioned using £2 stakes so how are you managing to lose £2 on a trade? Are you forgetting to close your position? If you're scalping for one tick, you really shouldn't be having any loses more than 2, possibly 3 ticks.
The fast interpretation of situations and the fast reactions needed to prevent disproportionately large losses are why imo scalping isn't the best introduction to trading for a newcomer. Swing trading gives you much more time to actually watch how markets work and to respond.
Scalping has been getting progressively harder on prerace markets over the years, it makes good practice for a newbie but not really sure you can consistently expect gaining a bunch of ticks without all the market reading skills that you probably still lack. A lot of traders have started from scalping, myself included, but swing trading offers better risk/reward ratios and is easier to stomach since you're not worried that one bad race can wipe out all the hard work.
But I don't agree with using 2 stakes, it may be fine for scalping but you can't really practice good swing execution with 2 stakes, it's too one-dimensional with just 1 entry and 1 exit. I would suggest using like 10 stakes so that you can better manage your positions, entering with 10 all at once and then managing your position with 2 stake exits. You can even start entering with 2 stakes to average out your entry price as well.
The problem with trading pennies is that you don't really care about pennies (similar to practice mode) so you don't have a real incentive for good trade execution or to learn from mistakes. But you also can't start with bigger stakes because the emotions will most likely drive you insane and the market will push you around, so there needs to be a more balanced approach to get the best of both worlds imho.
If you're going to give swing trading a chance then the latest Bet Angel video is probably a perfect example for that, just start by breaking down every trade into two main parts - setup and execution.
https://www.youtube.com/watch?v=laJGJ6ZYXfo&t=1105s
But I don't agree with using 2 stakes, it may be fine for scalping but you can't really practice good swing execution with 2 stakes, it's too one-dimensional with just 1 entry and 1 exit. I would suggest using like 10 stakes so that you can better manage your positions, entering with 10 all at once and then managing your position with 2 stake exits. You can even start entering with 2 stakes to average out your entry price as well.
The problem with trading pennies is that you don't really care about pennies (similar to practice mode) so you don't have a real incentive for good trade execution or to learn from mistakes. But you also can't start with bigger stakes because the emotions will most likely drive you insane and the market will push you around, so there needs to be a more balanced approach to get the best of both worlds imho.
If you're going to give swing trading a chance then the latest Bet Angel video is probably a perfect example for that, just start by breaking down every trade into two main parts - setup and execution.
https://www.youtube.com/watch?v=laJGJ6ZYXfo&t=1105s
It all depends on your mindset. If you're trading £2 and losing 10p a race, some may think it doesn't matter, it's only 10 pence while others would realise they're not making any progress, although at 10p a market you'd have plenty of time to practice.
-
ShaunWhite
- Posts: 9731
- Joined: Sat Sep 03, 2016 3:42 am
100% agree, It misses so much of what manual trading it's about. If you enter with £10 and then take say £4 out when it's moved a few ticks your way it will move the break even point away from you, locking in some profit and buying some much needed breathing space. If it doesn't go your way you can also reduce your position a bit and therefore not carry so much liability if it continues to run against you. Likewise if you enter and the market heads off in your direction like a train, you can add to your position and capitalise on it.Kai wrote: ↑Thu Jul 18, 2019 11:37 amBut I don't agree with using 2 stakes, it may be fine for scalping but you can't really practice good swing execution with 2 stakes, it's too one-dimensional with just 1 entry and 1 exit. I would suggest using like 10 stakes so that you can better manage your positions, entering with 10 all at once and then managing your position with 2 stake exits. You can even start entering with 2 stakes to average out your entry price as well.
I think Peter may have described it once as a dance with the market (presumably it leads), so allow your position to rise and fall with it, rather than just doing the hokey-cokey.
-
ShaunWhite
- Posts: 9731
- Joined: Sat Sep 03, 2016 3:42 am
-
ruthlessimon
- Posts: 2094
- Joined: Wed Mar 23, 2016 3:54 pm
Can. Of. Worms.
Given the context (i.e. First trades) I have to disagree. There is nothing better than 1 entry, 1 exit. Keep it as rigid & basic as possible. So much easier to spot the errors that way - with the plan, & our own demons (assuming a new trader has a plan!!)
A trader could make £10k a yr with a 1 entry, 1 exit strategy - yet there's a 90% failure rate. Personally, I believe it's caused by people believing they'll have the gift for discretionary trading, right off the bat.
I hear what you're saying but being a discretionary trader isn't exactly mutually exclusive to being a rule-based trader, he can be extremely rigid regarding the setup by simplifying a single strategy and actively looking for it in the market whilst ignoring everything else, but still be flexible enough with the staking and managing of the position.ruthlessimon wrote: ↑Thu Jul 18, 2019 5:04 pmCan. Of. Worms.
Given the context (i.e. First trades) I have to disagree. There is nothing better than 1 entry, 1 exit. Keep it as rigid & basic as possible. So much easier to spot the errors that way - with the plan, & our own demons (assuming a new trader has a plan!!)
A trader could make £10k a yr with a 1 entry, 1 exit strategy - yet there's a 90% failure rate. Personally, I believe it's caused by people believing they'll have the gift for discretionary trading, right off the bat.
It's never too early to start creating good execution habits before bad ones set in, with a one-dimensional approach he has to constantly make absolute decisions where to enter and where to exit which can be very stressful, even if the trade is going well there's always that fear of the price quickly pulling back, so why not exit half of the stake at some point to secure a bit more breathing space both on the ladder and in his mind to feel more in control. We're all aware that good execution and proper risk/position management is an edge in itself even by trading completely at random by cutting bad trades and letting the good ones run, so why not start learning towards that.
-
ShaunWhite
- Posts: 9731
- Joined: Sat Sep 03, 2016 3:42 am
I agree with keeping it simple but you can simplify to the point where you're impeding yourself.
Apologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious
Well it's nothing overly complex even though it may seem like it at first, it's all about getting familiar with how the ladder works so you can manage your positions better depending on how the trade is going and how confident you feel. The reason why traders use this approach is because nobody can really consistently get that perfect entry or exit so traders have to settle for optimal entries and exits, it's a small price to pay to get that comfort in your trading and to keep the variance in results lower.sniffer66 wrote: ↑Fri Jul 19, 2019 5:33 amApologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious
It's best you look at the videos because it's harder to explain textually, but lets say a runner is currently trading in a narrow 4 tick price range and you flat out lay him at the very top tick of this range expecting him to drift but he doesn't drift right away and he instead keeps trading in this range. It may seem to you like the trade is doing badly since you're looking at -3 ticks already and thinking of getting out for a loss but nothing has really changed, it's just the current market noise. But if you averaged out your entry with a bit more patience by splitting the stake in half and laying at the two ticks at the bottom of this narrow 4 tick price range then you would feel a lot more comfortable and confident holding this position until you get that drift, and if it doesn't come you can take a scratch or a small acceptable loss, or even end up with a scalp for your troubles.
With more experience you will later realize how to scale out of a position and you'll realize when and where it makes more sense to average out your entry/exit, because not every tick is worth the same and not every price range behaves the same. For example it makes a bit more sense to average out your entry/exit on price ranges that are generally weaker and more volatile like the prices just below 2.0 or below 3.0 instead of dumping your entire position in one go since the tick increment % will be vastly different, but with more experience you'll get to grips with ladder mechanics and you'll be able to execute your setups much better, you'll even turn a profit from bad trades sometimes.
Just make sure you don't get into the habit of "doubling down" when a trade starts going against you because you can quickly rack up hefty losses if you're on the wrong side of momentum, so don't overdo it with averaging out your entries, compared to averaging out your exits where you can't do too much wrong.
Not sure if there's a specific tutorial for it but you can probably see this in most videos on the Bet Angel Youtube channel, the very first one on the prerace playlist is already a good example of this approach.
https://www.youtube.com/watch?v=BtFQ_jo ... dex=2&t=0s
Kai wrote: ↑Fri Jul 19, 2019 12:46 pmWell it's nothing overly complex even though it may seem like it at first, it's all about getting familiar with how the ladder works so you can manage your positions better depending on how the trade is going and how confident you feel. The reason why traders use this approach is because nobody can really consistently get that perfect entry or exit so traders have to settle for optimal entries and exits, it's a small price to pay to get that comfort in your trading and to keep the variance in results lower.sniffer66 wrote: ↑Fri Jul 19, 2019 5:33 amApologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious
It's best you look at the videos because it's harder to explain textually, but lets say a runner is currently trading in a narrow 4 tick price range and you flat out lay him at the very top tick of this range expecting him to drift but he doesn't drift right away and he instead keeps trading in this range. It may seem to you like the trade is doing badly since you're looking at -3 ticks already and thinking of getting out for a loss but nothing has really changed, it's just the current market noise. But if you averaged out your entry with a bit more patience by splitting the stake in half and laying at the two ticks at the bottom of this narrow 4 tick price range then you would feel a lot more comfortable and confident holding this position until you get that drift, and if it doesn't come you can take a scratch or a small acceptable loss, or even end up with a scalp for your troubles.
With more experience you will later realize how to scale out of a position and you'll realize when and where it makes more sense to average out your entry/exit, because not every tick is worth the same and not every price range behaves the same. For example it makes a bit more sense to average out your entry/exit on price ranges that are generally weaker and more volatile like the prices just below 2.0 or below 3.0 instead of dumping your entire position in one go since the tick increment % will be vastly different, but with more experience you'll get to grips with ladder mechanics and you'll be able to execute your setups much better, you'll even turn a profit from bad trades sometimes.
Just make sure you don't get into the habit of "doubling down" when a trade starts going against you because you can quickly rack up hefty losses if you're on the wrong side of momentum, so don't overdo it with averaging out your entries, compared to averaging out your exits where you can't do too much wrong.
Not sure if there's a specific tutorial for it but you can probably see this in most videos on the Bet Angel Youtube channel, the very first one on the prerace playlist is already a good example of this approach.
https://www.youtube.com/watch?v=BtFQ_jo ... dex=2&t=0s
Thats great - thanks for the detailed response Kai. I've actually looked at spreading the exits as a percentage of the entry before and dragging them if the price doesnt move as far as hoped. Not looked at spreading the entry though. Will take a look at the vid
Cheers again