Chapter 10 - Diary of a trader

Well sorry, but my continued survival as a trader has to come ahead of your continued entertainment as a reader of Sally Nicholl's Diary.

Don't get me wrong. When I first started writing, I envisaged a thriller a few little scrapes along the way, but by the time we got to Chapter Ten, I was planning to be in the driving seat of something other than a runaway train on a steep, downhill gradient. Apart from which, writing horror stories has never been my thing.

So I contacted the Welsh Bloke to ask if Sandy might be able to help. Even before I could say, "I'm willing to pay," he told me, "I think that would be an excellent idea."

Clearly, I am not one of Finspreads' success stories at the moment. With eight consecutive losing trades to my credit or, more accurately, debit probably the best thing you can do, if you happen to be reading this for tips, is to trade the opposite to whatever I do!

Would the Guru of Finspreads be able to help me? While I was waiting for an answer, Tony elaborated on his statement that going on Sandy 's course would not make an entertaining read.

"People think trading is exciting and fast-moving. One moment you're ten thousand up, then you're twenty thousand down. One minute you're in Gold, then you're in Brent Crude. Then you're short the FTSE. They think it's a white knuckle ride all thrills and spills," he began.

"But Sandy, he teaches a cool calm system. No drama, no thrills, no nasty surprises. You target something to happen. If it does you open your trade, set very tight stop levels, work out where to exit the trade with a profit, put in your limit order and forget about it."

Call me lily-livered, but cool and calm sounded infinitely superior to the nail-biting excitement of watching my £5,000 starter bank decreasing at about the same speed Manchester United seem to be sliding down the Premiership this season.

Could Sandy Jadeja become my Wayne Rooney?

Well first of all, he told me I couldn't come on his course. "You don't know enough, yet," he explained. "You'd be out of your depth. Waste of time and money."

Then came the good news. "I'm going to give you a private coaching session, instead." His tone of voice suggested he's a man who relishes a challenge.

A week later, we sat down together. Sandy didn't pull any punches.

"They say that you trade your personality," he began. "I've been looking at your trading record, and so far as I can tell, you're a schizophrenic."

This wasn't quite as bad as it seemed. Sandy had identified that I've been dabbling. A little bit of this. A little bit of that. Or as I preferred to call it, experimenting.

"So what's your trading plan?" he asked.

"Er, well."

Er, well indeed.

Thirty minutes later, and I am the proud possessor of a trading plan.

It goes something like this.

• Conserve remaining funds.
• Refrain from entering reckless trades for no good reason.
• Rely more on charts.
• Rely less on gut feeling.
• Avoid heavy losses: not only will I fix stop-losses, but I'll also stick to them!
• Have a target/understanding for how much I want to win on a particular trade as well as how much I am prepared to lose and make sure the risk/reward ration stacks up.
• My immediate objective is to understand what I am doing, and restore my confidence with some winning trades.
• My longer-term objective is to get back to break-even, before moving into profit.

"So what are you going to trade?" Sandy asked.

By now, I'd got the hang of his technique: like all good coaches, Sandy doesn't tell you what to do. Instead, he makes you do the work.

"I've been following sterling/yen," I say.

"That's a bit too volatile for someone in your position," Sandy says. "You can lose too much too fast if you get it wrong."

"How about the Dow?"

I reckon that at least I have some sort of understanding of how the Dow works. And Sandy reckons it's better for me to stick to one particular instrument for the time being, instead of spreading myself too thin, and playing the field.

We move on to discuss my preferred trading period. Am I a day trader? A longer-term position trader? Or somewhere in between?

I think I'm in between. Don't want to watch the screen all the time, and would be happy to hold my position for a few days or more especially if it were winning!

Now the charts come out. Sandy decides to explain them in language that matches my personality and disposition as a writer. "The market is a language," he tells me. "It tells a story. In essence, it is a mystery that unfolds before your eyes, minute by minute, hour by hour, day by day.

"Every day, in every market, four things happen." Sandy switches to an OHLC Chart. "The market opens. It closes. It records a high. And it records a low. That's its structure. It really is that simple." He pauses, and allows himself a smile before adding, "And it really is that complicated, in that no-one on earth can be certain what's going to happen."

So back to the Dow. For the past few weeks it's been rising. And as of now, I have decided to follow that trend. Thanks to Sandy , I understand when to place a trade, and where to set my stop-losses: by looking at the charts, instead of relying on impulse and wishful thinking laced with optimism. I know how much I'm prepared to lose, as a result of consulting recent lows. And I have a realistic picture of how much I might win.

As for my reading. Sandy recommends I start with Toni Turner's book on short-term trading. So that's what I'm going to do.

If you think this has been a boring chapter, too bad! But your reward for reading this far, is a link from someone called Real Ale, who tells me I could have done with it nine chapters ago. I can only agree!

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Sally Nicoll is a writer and a Finspreads customer whose career to date has embraced journalism, broadcasting, and advertising copywriting She lives in London and is currently writing her second novel. Feel free to contact her at veryluckymoney@hotmail.com.
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