This was contributed by “Ingot54″a professional trader who is also one of the popular contributors to “Topstocks.”

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BIGGER 2008 Experiences.

I entered the stock market back in September of 2006 and I started with $100,000 and took brief positions, usually with one company at a time, trading on a daily basis.

If I took a position overnight which wasn’t often, I could not sleep very well; however I was, very successful with my trading strategy, making about 30 percent on my capital in 6 months.

Caution was the name of the game.

Then, the market turned nasty on me and the wonderful bull market of 2006/early 2007 began to go sideways mid 07 and soon I found my capital reducing in size.

Some reasons for this.

I looked back and noticed that a few of my trades were sold “premature”. One was FMG for instance bought at about $13.00 or so and sold for a profit the same day, making a few thousand. Had I continued to hold fmg of course, my profits would have been much greater as fmg went to about $65.00 before the split. Wow what a performance!

So I thought that while some of my trades were a loss, {not many mind} they were not that large, and more importantly for me, I “lost” an opportunity to profit greatly by selling rather than holding, so I decided, as my confidence grew to hold longer. First bad mistake.

I made some very bad decisions on what to buy and hold, so much so that by years end 2007, my capital had diminished to around $70,000.

Oh well I thought. Never mind.

So I bought back into a stock that had previously gone well for me and I saw my capital halve in value by the end of January. Took a punt on a stock that went from $10.00 to .335, buying in at .61 and saw that diminish to around .50.

Today I have about $30,000 left and I am not a happy camper at all.

So I am closing my “normal” share trading account and have signed up with IG Markets.

Now, I have been using the CFD trader simulator on the ASX web site to give me a taste of what it is like to trade cfd’s and I think I have learnt a great deal, as well as from what I have read here. No expert mind, but a little more confident than I was a month or so ago.

I have been trading only BHP shares for about a month now with great success on the asx sim.

How I will go when I begin trading cfd’s for real is another question of course.

No doubt the fear factor will be somewhat greater now with my financial position, such as it is and the reality of “real money” trading.

In basic terms, I have been taking a position on the simulator and trading very quickly -in and out.

For instance, I’ll put $100,000 down {treating it like $10,000} and buy as many BHP shares as $100,000 will allow me to buy. If I go long and I see red there, when it touches $1,500 DOWN I’ll go short. Sell it immediately and then wait, watch and try to get a feel on where the share price is going. If I feel it is going south, longer term, I’ll sell bhp.

I’ll take that position for as long as I think it will last or when I see $5,000 in the green, then buy, closing my position.

Yesterday, I went long on bhp at around $39.70 and put a sell order on it at $39.99. Hit that and went to an intra day high of $40.04 before retreating a little before close.

A tidy profit of about $5,000 which if I consider the trade was worth $10,000, means I finished the day around $500 UP. Not sheep stations I know but if I can emulate that every day during the week, that would be $2,500 a week x 48 weeks {got to give myself at least 4 weeks break} = $120,000 which is not a bad little earner…

My intention is to never go over $10,000 on any trade, AND STICK TO THAT RULE!

Initially, I intend to begin with $1,000 trades until I get a good feel for the platform etc.

I hope I will be in that 5 percent who are successful at this silly business.

If not, it is the park bench and dog food for me until I get at my super in 5 years time.

Bye for now and here’s to life.

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