Chapter 5 - Diary of a trader

This message from Richard F is typical of several I've received from my fellow traders in the past week. Thanks guys for looking out for me; I appreciate it.

Richard observes that at £25 a point, I could have lost £18,175 of the Nicolls Life Savings in just a few hours. Meanwhile, my risk-averse pals convinced I shouldn't be trading at all have been chorusing, "Told You So!" ever since I reported on my first adventure.

But they're missing something important. Had I been trading £25 a point, there's no way I'd have been using last week's suck-it-and-see strategy. I might be inexperienced. But I'm not daft.

The strength of Finspreads is that it enables a complete beginner like me to learn, without risking anything even approaching serious money. I've got another seven weeks of being able to penny trade experiencing what works, and what needs to be avoided and I intend to make the most of it.

Anyway. When I logged on on Monday, I was surprised to see I was losing £1.63. That was another lesson I hope I've learned: open trades will continue to win and lose, even when I've forgotten all about them!

It wasn't all bad news though. I'd switched on Friday from selling to buying Cable, and now I was £2.97 up for a stake of 3p. Marvellous! Decided to quit while I was ahead. But in my enthusiastic greed, I stabbed the wrong button, and discovered I had increased my stake, instead of cashing in. Three hours later, and I was 39p down on this new trade, so I decided to cash in on the original bet, while sticking with the losing position.

By the end of the day, thanks to my incorrect predictions about the Dow's recovery and Sterling/Swiss my remaining trades were down £4.84.

At which point, I decided to give up.

This turned out to be an excellent idea. When I looked again 36 hours later, every remaining trade was moving in the correct direction, for a combined profit of 235 points. In particular, my loser bet on Cable had shifted 131 points into the black. Cool!

So maybe the thing to do is to hold your nerve when you're losing? And even as I write these words, I realise how much easier that must be when you're playing for pennies instead of pounds.

My do nothing except watch the screen' strategy continued to pay off. I never imagined until now that my computer could give me such enormous pleasure. My 3p buy bet on the May Dow the one that seemed such a bad idea as soon as I made it was soaring like an eagle to the dizzy heights of 237. And then

Then, alas, Wall Street took a tumble, and most of my winnings vanished before you could say, "Refresh your browser in case it's a mistake."

Which brings us to Friday. Expiry date for the May Dow, so I decided to sweat it out to the bitter end. Meanwhile, I decide to be clever and back the Daily Dow to fall and at 5p a point. I think this is hedging, but even as I make the trade, I wonder if I'm digging a big hole for myself.

Thanks to some judicious hand-eye coordination, I manage to take 15 points from the falling Dow. And I flog off my remaining Cable for a profit of 154 points.

Oh, and I had better own up to my foolish bet on Yahoo Rolling; I had noticed the company was due for an announcement on Friday and the price had risen steeply so I backed it to fall, just on a hunch. This cost me 57 points. (Mind you, it could have been even worse; it was up 97 points at one stage in the session.)

By the end of Week Two of my career as a trader I have won 460 points and lost 178, with one position (Swiss/Sterling) still held.

Things are looking up!

For my next trick, I'm going to explore one of the ideas from the Finspreads Trading Academy, and pick out some equities for longer-term trading. Next time, I'll tell you which ones I'm selecting and why.

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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