If there's anyone out there who can spare some advice for an index trading newbie, I'd appreciate it.
I've been trading in various stocks with a good deal of success in the last 12 months (consistently hitting a strike rate of 4 out of 5 trades) but out of interest and after following the XJO thread for ages I've tried my hand at index trading in the last few weeks. I started using the same system I've employed successfully for individual stocks, where I rarely use stops, and I nailed the first 7 out of 10 trades, but then I started adding stops in and have completely reversed the trend, and today I struck out with my 5th trade in a row (a mix of shorts and longs). I started using the stops because of the out of hours trading (on IG) which I'm not used to with stocks.
The question I have is I've been using stops of 10-20 points on the XJO and Dow - is that too tight? What is a tight stop on these indices and what would be standard?
I havent done too much damage so far cos I'm only using mini contracts so I can afford to make some mistakes while I learn, but I dont like to keep losing espcially when its taking my attention away from other trades I could be making money on, and now its starting to dent my overall confidence!
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help - index trading sucks so far
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