Off the mark
Hello and welcome to my CFD trading diary!
My name's Andy - a 22 year old Australian who grew tired of working for a heartless multinational consulting firm. I've quit my job to start up an online/consulting business with three other smart people. But then I realised, how the hell do I feed my bank account before our business kicks off the ground?
CFDS!
For those who don't know what they are, CFDs (Contracts for Difference) utilise that wonderful thing known as leverage, allowing you to profit from both bullish and bearish stock price movement. Read all about them here: http://en.wikipedia.org/wiki/Contract_for_difference
If I were to trade regular shares, I'd need a huge amount of capital to build up a diversified portfolio, which would still be very inflexible. Fair enough for the 50 year old corporate fatcats out there, but how does a 22 year old, recently graduated kid get that kind of dough?
I've started with just $6000 dollars in my trading account, with which I can make many concurrent short-term trades at only 5% margin requirement per trade. The challenge is to see how much money I can make trading Australian CFDs, whilst still keeping my risk levels relatively low. Apart from a smallish holding in BHP ($4000) and online savings ($8000), I have no other assets. Therefore, I have no intention of being a cowboy and blowing it all through stupidity...
Which brings me on to the inspiration for this diary - the diary of another. I picked up a book from Borders written by an Australian blonde woman who turned 13k into 30k in three months. The blurb sounded great, a professional CFD/technical analysis consultant taking a human journey toward wealth and enlightenment! But only three weeks into her journey, she'd flushed almost a third of her dough down the toilet. All due to a combination of undisciplined, poorly planned trading and emotional problems.
I found myself picking off all the stupid mistakes she had made that I thought I would never do. For instance, she only regularly traded a very small selection of stocks, and entered into positions when there was no clear signal. Impatience, blaze riskiness and superstition summed up her trading style. She did eventually improve (slightly), but it was a frustrating read. If this moron can do it I figured, then what am I waiting for! After reading the bit where she said men are bad traders because they have ego problems, I lost the plot and signed up for an account.
So here I am, $6000 in the bank, ready with a clear plan, a conservative approach and well aware of what can turn a good thing into serious loss.
Here goes...
My name's Andy - a 22 year old Australian who grew tired of working for a heartless multinational consulting firm. I've quit my job to start up an online/consulting business with three other smart people. But then I realised, how the hell do I feed my bank account before our business kicks off the ground?
CFDS!
For those who don't know what they are, CFDs (Contracts for Difference) utilise that wonderful thing known as leverage, allowing you to profit from both bullish and bearish stock price movement. Read all about them here: http://en.wikipedia.org/wiki/Contract_for_difference
If I were to trade regular shares, I'd need a huge amount of capital to build up a diversified portfolio, which would still be very inflexible. Fair enough for the 50 year old corporate fatcats out there, but how does a 22 year old, recently graduated kid get that kind of dough?
I've started with just $6000 dollars in my trading account, with which I can make many concurrent short-term trades at only 5% margin requirement per trade. The challenge is to see how much money I can make trading Australian CFDs, whilst still keeping my risk levels relatively low. Apart from a smallish holding in BHP ($4000) and online savings ($8000), I have no other assets. Therefore, I have no intention of being a cowboy and blowing it all through stupidity...
Which brings me on to the inspiration for this diary - the diary of another. I picked up a book from Borders written by an Australian blonde woman who turned 13k into 30k in three months. The blurb sounded great, a professional CFD/technical analysis consultant taking a human journey toward wealth and enlightenment! But only three weeks into her journey, she'd flushed almost a third of her dough down the toilet. All due to a combination of undisciplined, poorly planned trading and emotional problems.
I found myself picking off all the stupid mistakes she had made that I thought I would never do. For instance, she only regularly traded a very small selection of stocks, and entered into positions when there was no clear signal. Impatience, blaze riskiness and superstition summed up her trading style. She did eventually improve (slightly), but it was a frustrating read. If this moron can do it I figured, then what am I waiting for! After reading the bit where she said men are bad traders because they have ego problems, I lost the plot and signed up for an account.
So here I am, $6000 in the bank, ready with a clear plan, a conservative approach and well aware of what can turn a good thing into serious loss.
Here goes...
posted by Trader Andy at 1:26 am
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