Chapter 11 - Diary of a trader

Those of us who are prepared to confess that the FT is not our sole source of information will know the Mail's been waging war on the Government's new Gambling Bill.

Confronted with page upon page of Dire Warnings about the Evils of Gambling, there was only one thing for it

..I dosed myself with Lemsip and logged on to Finspreads.

While the Mail's virulent attack on gambling was enough to make me want to offer odds on which raindrop would get to the bottom of the window first, I'm never going to qualify as someone whose life was ruined by gambling.

Returning from Scotland in October, I continued to follow Sandy Jadeja's golden rules of trading. Or at least, I tried. Certainly I've learned about imposing a tight stop-loss. But like many other women, I seem to have a bad sense of direction: no matter whether I bought or sold, the price went the other way.

The bad news: eight consecutive losing trades. The good news: my losses amounted to only £175.27.

"That's not good news at all," I hear you chortle. At the time, I shared your opinion: it felt like death by a thousand cuts. Indeed, I stopped trading, and was in two minds about whether I would ever return, until, as I say, the Mail reignited my enthusiasm.

I scowled at the Dow, and then called up my watch list to see how the market had changed in my absence.

One name stood out a mile. And I relate it to you in the same way that Mrs Robinson hissed the word "Plastics" at Benjamin in The Graduate. That name was Google. One of my favourite companies, as it happens, although that's beside the point.

Google, or so it seemed, was one-way traffic. From the moment the company was listed, the price had been going up and up and up.

My days of being a smart-arse and thinking, "Well in that case, it's definitely coming down," are over. Oh no! These days, the trend is my friend.

I also noticed there's a whopping great spread to cover, and that the Google margin is astronomical. But at least I noticed these things before I placed the trade, rather than once I was on board.

Loyal readers may remember Sandy's good advice was that trading sterling/yen was far too volatile for someone like me, on the grounds that even with a realistic stop-loss I'll lose too much too fast if I get it wrong.

So I knew what Sandy would say if I consulted him about Google Google makes sterling/yen seem about as volatile as Vodafone.

Thinking I could always plead that the balance of my mind had been affected by Benylin (they do tell you not to operate machinery when you swig it, and I guess that includes computers), I made a 50p BUY trade.

Five minutes later, while I was still pondering exactly where to place my stop-loss, I was losing £65. Google, it seemed, could go down as suddenly, quickly and easily as Wayne Rooney in the Arsenal penalty box.

My finger hovered over the SELL button. Cut my losses, go back to bed and prepare to die, choking on a Fisherman's Friend. And then the miracle happened: a coughing fit so bad I had to walk away from the computer in search of water.

By the time I returned, I was only losing £15. What would YOU have done? Taken the loss? Neither did I. I sat tight. Fortune favours the brave, or so they say (except, I suspect, in Iraq). By the end of the session, I'd banked £200.

I wish I could tell you that my return to good fortune was accompanied by my return to good health. But it didn't work like that.

Over the next few days, as I got sicker and sicker, I won more and more.

Three separate, consecutive winning trades: £100, £319 and £436.45. Hurrah, I could afford private medicine!

I learned a lot during this period:

• Google is probably one of the most volatile stocks available to trade especially in the first 15 minutes of the session
• And because every cent equals one point, it's definitely not for the faint-hearted: today, for instance it's already moved in a range of 458 points
• It seems to me that a realistic stop-loss was about 400 points so with a minimum 50p bet, that means risking £200 on every trade.
• IMPORTANT: The Google honeymoon is clearly over. Having risen like Lazarus from 95.96 to 201.60 (I baled out long before the top, at around 190) it's currently trading at around 170
• One reason for Google's success has been down to plain old supply and demand there was a limited supply of stock to sell, and that pushed prices up.
• OPPORTUNITY? Extra supply is being created as the Google lock-up expires, and insiders can sell for the first time. The first tranche of shares became available on November 16th when a highly profitable SELL trade could have been made. Other tranches become available in mid December, January and February

I have to admit that after these four winning trades, I've been reluctant to enter the market again. There's currently £4,233.63 in the account and getting back to break-even of £5,000 is looking eminently possible; I might even have managed it if I'd been well enough to trade the Dow in the post-election fervour that hit Wall Street.

I'll let you know if Sandy tells me off, when he reads this! Meanwhile, I leave you to ponder on a government that is encouraging us to gamble, while telling us we can no longer smoke (except, perhaps, in Supercasinos?) or hunt foxes.

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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