Thursday, 7 June 2007

Lesson #1 - Look before you leap

So, I have just been doing some small trades. My stake at the moment is £10, which is 10% of my total bank. I was playing the UK horse races, as they have a lot more liquidity to them to the US ones. This way I can engage it with plenty of time till the off (more than 15 minutes), so I don't have so much time pressure to close a trade.

I had just finished one trade, where the money turned against me and I narrowly got out without a loss. Feeling a bit silly, not noticing the trend starting to turn, I jumped straight into another race. I watched the screen for a couple of seconds and saw the price ticking up steadily, so I quickly put in a lay order. No sooner had I done this than the odds started dropping away. I could have kicked myself. I pulled up a price/volume graph and saw an obvious (totally obvious to even a blind penguin) down trend. What an idiot! I had jumped in and put in a trade without looking.

I scrambled and worked till the race suspended and managed, with a lot of luck, to just lose a few pence, but I learnt the lesson. I could have made a nice win there, but I managed to snatch failure from the jaws of success, by acting before I'd properly checked out the situation.


Kamran said...

Hi Richard,

I saw your advert for a banner on GetAFreelancer. This looks to be an interesting site, with a good concept.

How far have you got with your £100? oh and Good luck for your 100k !

Richard said...

Thanks for your support Kamran. I've only just got started and as I mention in a recent post I managed to wipe out half of my meagre bank by not closing a trade and gambling (and losing)! Lesson learnt and back to square 1