5% - 10% profit per day trading

[coolshades]

"I haven't LOST any money, ive simply SPENT £3,345 to purchase the experience that ive gained from this.
"


from a pure business view, you havent LOST any money.

the only money you had to lose was the original capital. you have already recouped that capital several times and have actually withdrawn from your account.

therefore, you have been trading on pure profit. i wouldnt call that a loss.

if you had to fund your account again - then that would be a loss..

 

[citygent]

Quote from spanish89:

iSo arent all traders just being complete thickos by not buying thousands of barrels today at £36, and then tomorrow selling all those barrels tomorrow for $42??? :eek: :eek:

Well done Spanish. You’ve beaten your critics by surviving – actually doing rather better than surviving – to the end of the year. I’ve enjoyed reading your blog which has showed some real development in your trading skills. Good luck for 2009. Three thoughts for the new year (meant sincerely).

First, you need to understand better the markets you are actually trading – not the fundamentals necessarily, since if you are simply trading off charts then it doesn’t matter if you are trading oil or index futures, but the futures markets themselves – your comments above about why there might be a gap between the Jan and Feb contract pricing is a case in point. You need to know this stuff because then you won’t be tempted to take advantage of opportunities that aren’t there.

Second, why don’t you try and reign in the lifestyle and build up your account in 2009? You’ll never become wealthy if you just spend everything you earn and your account size is always £5-10k, in essence you’re just a salaryman with a very insecure job. Compounding is a powerful tool – you’ve got the talent perhaps to become ‘a player’ – wouldn’t that be more satisfying than constantly raiding your bank account for a few thousand here and there?

Thirdly, you’re becoming a decent trader but jeez you come across as a nasty bit of work. Make a new year resolution to stop scamming, thieving and lying. Start paying your hot water bills and council tax rather than nicking the neighbours’ and sponging off everyone else. Being a decent person and a good trader are not mutually incompatible, and you’re likely to find life more pleasant if you treat others (and society) as you would like to be treated. Happy Christmas and all the best for 2009.

 

[NO:1 OILTRADER]

Quote from spanish89:

Normally the inventory number goes fine.


I saw it come and saw market fall, i bought in at the very low of the spike for the bounce at 42.60

Had set target at 43.92.


Market the bounced back to a few ticks above that target, however the badluck of the month continued..
Every other time that i set target it got touched, but then market went trhough it and i missed over £1000 most days cos of it..


However cos they were all shouting 4.2million barrels cut i cancelled that target was was thinking it would spike to $45/6+.
The target was just over 100ticks and was right at the top of where market spiked, so would have been a beautiful end to the year...

And i still feel the pain from that trade on tuesday night when i put the trade in through the wrong account, and then next morming it was £1,300... for teh virtual account.



But ive still made £7,277 profit tis month, from a starting acocunt of under 4k,
so not gna be too sad.


I has set stoploss to 39.60 btw so was out at the top before that big crash to the low 38s came.

hi spanish,

I cant see you on msn and am very worried, the trade that i got in with you, the one we agreed to buy at so i got feb contract at 46.99 is now at 41.83. i'm now over 500 points out and at 50p is not alot to you amounts to over £250 to me and is a hell of a lot. i see you got out at lower price but we never set a stop for me and am now a bit worried when i see ppl looking to go short to drive it down some more.

what should i do, please help.

 

[citygent]

Quote from NO:1 OILTRADER:

what should i do, please help.

Never, ever, ever go into a trade without a plan for how and where you get out if it doesn’t work. Let this be your £250 learning experience from this one. In the absence Spanish, and as you’re obviously a bit stressed, try this. A few deep breaths and ignore your P&L. Look at the chart calmly and dispassionately as you would if sizing up an entry. Would you be going short or long here, or no view? Let the decision from that inform your current position, ie to hold it or cut it. As you have no plan for your current trade, you have to treat it as you would a brand new position, starting now. If you would go long here, where would you exit and place your stop? If you wouldn’t enter here, but might do a bit lower, don’t hold on, cut and put the trade on again when it reaches the level you wanted. But most of all, never, ever enter a trade i) on someone else’s say so, and ii) without a plan for the exit if it goes wrong. Please learn this lesson if nothing else. And a newbie calling themselves ‘No1 Oiltrader’ is never a good idea, even if done with a sense of humour rather than hubris…

 

[NO:1 OILTRADER]

Quote from citygent:

Never, ever, ever go into a trade without a plan for how and where you get out if it doesn’t work. Let this be your £250 learning experience from this one. In the absence Spanish, and as you’re obviously a bit stressed, try this. A few deep breaths and ignore your P&L. Look at the chart calmly and dispassionately as you would if sizing up an entry. Would you be going short or long here, or no view? Let the decision from that inform your current position, ie to hold it or cut it. As you have no plan for your current trade, you have to treat it as you would a brand new position, starting now. If you would go long here, where would you exit and place your stop? If you wouldn’t enter here, but might do a bit lower, don’t hold on, cut and put the trade on again when it reaches the level you wanted. But most of all, never, ever enter a trade i) on someone else’s say so, and ii) without a plan for the exit if it goes wrong. Please learn this lesson if nothing else. And a newbie calling themselves ‘No1 Oiltrader’ is never a good idea, even if done with a sense of humour rather than hubris…

Your right, sorry about the name, how can I change it. Didn't mean to come over as a know it all, more totally the opposite and was done very quickly when I first joined. I was hoping to be farely good by now but seems i am still losing my money. i know spanish is good and has a lot of good to give to others.

i want to learn but would like to earn at the same time if possible, that way i could give up my job(which is on the rocks at mo) and put more of my time and effort into doing this. currently my time is spent mostly on other things, mainly work commitments and getting ready and travelling ect, i could save all this time by just sitting at my computer desk and trading for a living.

at the moment i am looking at the gragh but dont see anything that says pullout, thsi may be that im biased so am not sure what to do. my gut feeling and my mind is telling me the moment i close the trade for this massive loss it will jump back up again. after all 5 dollars isnt that much in oil terms.

 

[citygent]

Quote from NO:1 OILTRADER:

Your right, sorry about the name, how can I change it. Didn't mean to come over as a know it all, more totally the opposite and was done very quickly when I first joined. I was hoping to be farely good by now but seems i am still losing my money. i know spanish is good and has a lot of good to give to others.

i want to learn but would like to earn at the same time if possible, that way i could give up my job(which is on the rocks at mo) and put more of my time and effort into doing this. currently my time is spent mostly on other things, mainly work commitments and getting ready and travelling ect, i could save all this time by just sitting at my computer desk and trading for a living.

at the moment i am looking at the gragh but dont see anything that says pullout, thsi may be that im biased so am not sure what to do. my gut feeling and my mind is telling me the moment i close the trade for this massive loss it will jump back up again. after all 5 dollars isnt that much in oil terms.

First, you need to be realistic – there are people out there you are competing against (which in essence is what trading is: a competition with a binary outcome win or lose) who have been doing this for decades, have enormous proprietary knowledge, skill and institutional backing. Saying you’d hoped you’d be quite good by now, is a bit like saying you hoped you might be on the professional golfing circuit or getting the odd first-team Premier League game after taking up the sport a few months ago. In one sense Spanish’s thread is hugely unhelpful to newbies – he is the incredibly rare example of a natural talent, which is the only reason I, as a pro-, read his blog, because its fascinating seeing a raw talent coming on like this particularly as (for better or worse) he is a bit of a character. I’m not exaggerating but he could actually have a very bright future if he applies himself and takes it seriously.

On your current problem, I’m not going to advise (after all, I advised you not to take advice on specific trades!) – but one thing you will need to learn if you are to be successful is that you have to be able to be dispassionate about trades you are in. If you had just turned on the computer and were looking at the chart for the first time today with no existing positions, would you enter a long (in which case where would your stops and targets be), a short (in which case cut your position now) or no trade because you’d be looking at entering at another level – if the latter then how do you think the price will move to get there, and only then apply that thinking to the fact you’ve got a position open and what to do with it. If you hold the trade open for now – make sure you know where your new stop is.

Finally, you say $5 is not much in oil terms! That’s a 12.5% move which is massive by any historical standard – we’re living in exceptionally volatile times: don’t build a technique that purely relies on extreme volatility.

 

[JHardy0690]

When in Doubt, Get out!!!

 

[pocrel]

i think spanish has hit the bottle hard again last night so he is in a coman in bed ha good on ya mate you deserve it you have had a great month and its time to relax and enjoy christmas
also citygent could you possibly explain the huge difference in the jan and feb contracts and why spainish could not be right? if you dont mind

 

[Trader_Dante]

I was speaking to a big oil trader last night that believes there is a large scale attempt to drive the oil price down in order to force Russia into default and curtail its power.

He believes that the oil price could come as low as $25 which certainly fits in with some analysts calls also.

Whether he is correct or not, it is a fact that when bubbles burst, they don't revert to the mean but also massively undershoot that mean.

Although oil seems very low at the current price, it's not that low by historical standards.

I am personally long the Feb contract in equal increments from $45 and $43.90 and plan to try and average this one out but I am not adding anymore now until $35.50 area.

 

[citygent]

Quote from pocrel:

also citygent could you possibly explain the huge difference in the jan and feb contracts and why spainish could not be right? if you dont mind

A spreadbet is like a cash-settled future insofar as once the bet closes, its over, its settled at that price and you can move on to the next expiry. There's no way of taking advantage of the spread between the two months through the rollover process, although of course there are innumerable ongoing spread trading strategies (if you try and roll-over the contract with a spreadbetter they'll most likely charge you the difference - the exact process will be in your firm's T&Cs).

Ultimately though this market is about physical settlement futures. Remember you are trading a physical commodity. Other than a toy for traders to play with, this is essentially a mechanism by which oil producers and users can hedge or insure against price changes. If you hold a future at the point at which it expires you have to pay $35/bl or whatever and arrange to take actual physical delivery in line with the contract terms. For Nymex light sweet crude (the CL contracts) that means arranging for physical delivery at "F.O.B. seller's facility, Cushing, Oklahoma, at any pipeline or storage facility with pipeline access to TEPPCO, Cushing storage, or Equilon Pipeline Co., by in-tank transfer, in-line transfer, book-out, or inter-facility transfer (pumpover)." according to the contract terms...

Exploiting the contango is exactly what many big players are doing at the moment - lots of tankers are getting pressed into service as people start to buy oil to put in storage to exploit the contango. But - you need deep pockets to play the game. As each contract matures you have to put up the full value of the oil you buy, so the gearing effect disappears - 1 contract of oil = 1000 barrels = $35,000. You'd pay something like $10/bl per annum in financing and storage costs , ex-delivery - although that assumes you play in enough scale to justify chartering a 26 million barrel oil tanker. In the current market, the problems are i) having the financing to settle the contracts in a climate of deleveraging and ii) physically finding somewhere to store the oil. Assuming you can sort out these problems, then yes it makes sense and its exactly what big oil companies and very big financing houses are doing at the moment. You'd make about 15-20% after costs (storage and financing) buying physical today and selling the Jan 2010 contract.

As to why the contango exists to the degree it currently does... you could write a thesis on it. Just accept that it does and unless you are Shell or Morgan Stanley then there's not much you can do about it other than trade the spread.