You’ll remember I started the New Year feeling exceptionally
bullish. I’d identified a good-looking share – CSR – placed my
trade, then lo and behold! The little darling leapt 150 points
within 24 hours.
I took the money and ran, right?
Wrong.
Given my firm resolve to become a position trader, I sat back
and waited. Inevitably, CSR dropped back. Excellent. I bought some
more.
Meanwhile, however, my plan to invade Poland was going
horribly wrong.
My friend Ula, who comes from Krakow, is always telling me her
home-country economy is going from strength to strength. Given that
the WIG20 chart indicated that the only way was UP – from 1800 to
3000 in a year – I was sure my two £1 trades would rival CSR in
performance.
Which they duly did. Although not as I had hoped. The WIG20
managed to drop 120 points within a matter of hours. What had gone
wrong? Nothing Polish showed up in the BBC headlines, so I did a
frantic Google.
My search led me to a mournful report: the Polish press was
already referring to its stockmarket nosedive as Black Tuesday.
Apparently, the meltdown had been triggered by a copper producing
company called KGHM.
KGHM makes up 19% of the WIG20, and had self-combusted –
assuming copper can self-combust – by a monumental 12.6% in a
single trading session. Its collapse had prompted Polish
stockholders the world over to sell, sell, SELLLLLLLLL!
Trading volumes had been the fourth highest in the
history of the Warsaw Stock Exchange, I discovered. I also learned
the Polish word for February is Lutego. Neither piece of
information offered much consolation.
“You are a position trader,” I sternly reminded myself. “This is
a setback. Nothing more. Might even represent an excellent buying
opportunity.”
In the time it took me to ponder an additional £3 a point trade,
the WIG continued to decline. I took my finger off the BUY button.
This turned out to be a smart decision, because by the time they
closed for business in Warsaw (mysteriously, at 3.10pm), I would
have been an additional £105 down.
At least my adventures in Japan had been more successful.
Right?
Alas, not. I lost £486.50 when the Nikkei Dow declined from
16583 to 15610 and my March contract expired. I’d been hanging on,
confident of recovery. Which duly happened a few days later.
Unfortunately, I was still licking my wounds, instead of cashing
back in on a rising market. Ironically enough, the amount I lost
was almost exactly the same I had already won, back in January.
I consoled myself by taking profits of £175.5 on two FTSE
trades
By this time, my remaining trades were lurching towards their
March expiry dates. CSR had long since failed to live up to its
earlier star status. And in Poland, there continued to be more
sellers than buyers.
I was almost relieved when the Finspreads system automatically
closed my trades. I’d taken a serious hammering: total losses of
£462 on the WIG and CSR. (Can you feel me wince as I wrote that
last sentence?)
I’d finally had enough. Time for me to fold my
calculator and bid farewell to Finspreads while I still had £1,400
left in my account. One final deed to perform before I went: to
reward a reader who’d been doing even worse than me.
In the last chapter, I invited readers to share their trading
stories. And yes, there’s always someone who is worse off than you
are.
Here’s an extract from the winning email, sent by Y.G. of
London:
A few weeks ago I found Finspreads
having never attempted spread betting before. I had been trading
shares a bit with moderate success for a couple of months. I was
patient, worked out what I thought might be a sensible strategy;
put on lots of 1p bets. After a couple of weeks I figured I would
just trade on the FTSE 100 cash as I had found a fairly good source
of market prediction.
I transferred £8,000 of my savings into my Finspreads
account with dreams of untold wealth. From now on I was going for
£50/point trades.
First day, I made £200 and felt completely
vindicated.
Next day was a disaster. I placed a Sell bet on the FTSE 100
for Wednesday 1st of February. All the pre-open predictions were
saying the FTSE would suffer a down day. Market of course went up
to a 4-year high and I hadn't placed a stop-loss. Instead of
pulling out with minor losses I held on, convinced that the market
would tumble later that day. It didn't and I lost just over
£5,000.
By way of consolation, Y.G. has been readmitted to the
Finspreads Trading Academy and can now experiment with lots more 1p
bets for the next four weeks. Which means he’ll have plenty of
opportunities to road-test the new trading platform – which, I have
to say, seems to have all kind of tasty improvements, especially
when it comes to the charts.
I’ll be trying it personally in the next few days. Because like
Y.G., I too will live to trade another day.
How so?
It’s all to do with my Great Uncle Gareth. As I’ll explain in
the next chapter...
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.
Copyright 2004-2008 Finspreads.