My trading has been at best erratic over the last two weeks. I have gone from nice gains to heavy losses. The main catalyst behind this is a position I took out on PLS.IR which I had been monitoring for some time. The share dived and I saw it as an opportunity to buy. Unfortunately it hadn’t completed its swan dive and at 8 euros a cent it cost me dearly. As a small stock the spread was quite large and to begin with I was down 250. By the end the trade cost me 550 and left my account in bad shape. I still firmly believe my trade was right and thanks to a good stop I was out before the share dived 12%. I am still looking to buy once the dust settles but over a longer duration.

Since then I have completed a number of erratic trades losing me another 200 euros. This is a clear sign I am overtrading and hence this post to confirm that and remedy it. I have done well in the only trading method I seem to have which is to wait for a down trend and ride it lower. This hasn’t worked for the up trends as the markets have been in a state of disarray. The FTSE is just above 6000 and the Dow Jones has gone under 13,000 for the first time since August.

My trades from now on will consist of waiting for the right moment to pile into a down trend with tight stop losses. My only saving grace is that I only lost 550 and didn’t wipe the account out which could have easily have happened.

Spread betting comes with many highs and lows. This week I built up my balance to 2300 and between last night and today I have managed to push that back down to 1950. This is the result of moving my stop (previous post) and placing my stops too close.

US inflation report came out today and is relatively tame. I took out a buy position on the FTSE at 6414 and it looks promising but we shall wait and see. US markets have just opened and after a rally of 330 points there seems to be a lack of direction. Hopefully the inflation results prove the stimulus they need to continue the rally thus pushing the FTSE higher too. At the moment the Dow is up 42 points lets see if it has legs.

I knew it, I had practiced it before but on this occasion I ignored it. Trailing your stop loss behind your winnings is the only time you should ever move your stop. Over the past few days in search of my trading Zen I have been waiting for the FTSE to rise to a resistance level and then shorting it. This has worked quite well gaining me 300 euros.

Then the rebound came. This was due to Wal-Mart who had good earnings and then comments from Goldman Sachs, Morgan Stanley, JP Morgan and other big banks speaking at a Merrill Lynch-organized financial conference. All of them had optimistic and good news which caused the Dow Jones to rally 320 points. I was short and bam 160 losses so I moved my stop loss. In the light of day I moved it back and took the hit because it looks like another strong rally is on the books for today.

In the denial I also took out a buy on Wall Street and set the stop loss to close stopping me out for another 60 euros. Wall Street went on to rally another 40 points which I missed. Not a good trading day. The lesson is never, never move your stop.

Over the past few weeks I have been playing around with the new trading platform and trying to develop a new trading system. Working during the day I don’t have the flexibility to keep track of my trades and make decisions when necessary. Whilst I can keep an eye on the markets I can’t devote time to managing trades. Too many occasions have arisen where trades have been stopped out because I had to leave my desk for twenty minutes.

IG Index has a beginner’s offer that allows me to trade at .30 cent for the first few weeks. The result of this is that I have lost only a few euros instead of a few hundred euros while learning the ins and outs of their package. No matter how good a trader you are each trading platform is different and each company has individual ways of operating. Learning these differences can cost you allot of money which is why I always like to use either a demo account or trade in small amounts to start with.

Initially I tried to manage trades during the day but quickly realised this was a losing battle. Since then I have been looking for my trading Zen. Most trading packages allow you to trade futures after the markets close (most trade futures anyway and not the markets). So when I go home in the evenings I have been trying to establish trends and find some type of system that suits my style. Whilst this may seem like an easy enough task, it has proven quite the opposite.