What Does Slippage Mean? The difference between the expected price of a trade, and the price the trade actually executes at. Slippage often occurs during periods of higher volatility, when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.
Slippage is a term often used in both forex and stock trading, and although the definition is the same for both, slippage occurs in different situations for each of these types of trading.
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Investopedia explains SlippageIn forex, slippage occurs when a limit order or stop loss occurs at a worse rate than originally set in the order. Slippage often occurs when volatility, perhaps due to news events, makes an order at a specific price impossible to execute.
In this situation, most forex dealers will execute the trade at the next best price.Slippage in the trading of stocks, often occurs when there is a change in spread. In this situation, a market order placed by the trader may get executed at a worse than expected price.
In the case of a long trade, the ask may have increased. In the case of a short trade, the bid may have lowered. Traders can help to protect themselves from slippage by avoiding market orders when not necessary.
New I Phone 4 G
Tuesday 30 June 2009
Trading Diary June 30th
Tuesday trading began with me opening up the charts to see that oil (Brent Crude Oil on I.G) had a range of 190. Something had spooked it?
By 11 it was at a high of the year, I found out it was partially due to the attack on Nigeria bringing fears of lack of oil? Anything to push the price up!
Today's trading was similar to Monday, Cable had a huge break out on the back of the housing news. Nationwide gave better numbers on the UK housing industry which made cable fly when the European markets opened!
By 11 it was at a high of the year, I found out it was partially due to the attack on Nigeria bringing fears of lack of oil? Anything to push the price up!
Today's trading was similar to Monday, Cable had a huge break out on the back of the housing news. Nationwide gave better numbers on the UK housing industry which made cable fly when the European markets opened!
I entered the trade at 16665.8 as it broke the high of day at 16662. It was moving quickly and before I had a chance to get out with 20 pips, I was taken out by my limit order with 30pips.
Its a 5min candle that you see on the charts and I was in the trade for all of 2 minutes. If only they where all so easy....
I have now taken 45 pips this week on the breakout strategy. Not done many on the hour which can yield the bigger points. This weeks focus is to get some big movers. No more trading today for me!
Trade well!
Monday 29 June 2009
Trading Diary June 29th
Monday breakout on Cable today was my only trade. The trade went as follows... At around 7am cable broke the range it had been channelling in from 4.15.
It broke this with the first sequence of the three red candles on the chart at entry point.
My entry point was 69 and after spread was 16.466.6.
I am much happier when my entry is broken on the first candle due to the higher percentage of it creating 3 candles of the same colour (80%). My exit was just around 50 and I clicked out at 51.9 for 15 - 16 pips!
Cable had a Major spike for no particular reason around 9 as you can see on chart. This put me off trading for the rest of the day as all FX markets were going in opposite directions to signals?
As my trading partner Neville would say.....The market is the market Kofi!
On to tomorrow!
It broke this with the first sequence of the three red candles on the chart at entry point.
My entry point was 69 and after spread was 16.466.6.
I am much happier when my entry is broken on the first candle due to the higher percentage of it creating 3 candles of the same colour (80%). My exit was just around 50 and I clicked out at 51.9 for 15 - 16 pips!
Cable had a Major spike for no particular reason around 9 as you can see on chart. This put me off trading for the rest of the day as all FX markets were going in opposite directions to signals?
As my trading partner Neville would say.....The market is the market Kofi!
On to tomorrow!
Monday 22 June 2009
Trading Diary 22nd June
Monday was a strange day, I was not happy with signals on cable for the breakout I usually trade in the morning. It had a huge drop and I should have been in the trade at 16478. It continued to drop even more and I was pissed!
The Fx hour strategy was good to enter also for 8am. I was very weary of what caused the drop so watched to see what happened. It continued on short trade and gave an opportunity to get 30 pips. Retraction was fast when it got near 16400.
Anybody looking for more than 30 pips would have been in the trade for more than two hours. The Bollinger bands started to pinch again and no clear direction on where it was going. Will update on where cable finally it finished tomorrow.
Have a great Monday!
The Fx hour strategy was good to enter also for 8am. I was very weary of what caused the drop so watched to see what happened. It continued on short trade and gave an opportunity to get 30 pips. Retraction was fast when it got near 16400.
Anybody looking for more than 30 pips would have been in the trade for more than two hours. The Bollinger bands started to pinch again and no clear direction on where it was going. Will update on where cable finally it finished tomorrow.
Have a great Monday!
Saturday 20 June 2009
Trading 5 Pillars To Wealth!
Hi all,
Many people are fear full of trading, but are you aware that trading should be used as part of your five Pillars to wealth, even if you are a beginner?
Here is your free 60 min audio recording of the Beginners Guide to the Stock Market!
Press here to listen
I recommend that you listen to this recording as soon as possible to really get the learning's. You will also get a FREE 45 minute 1-2-1 telephone consultation to maximise the value you get from this recording.
The wealth consultation is conducted by an experienced consultant. This 45 minute session, held on the telephone, will reveal valuable information you need to become financially wealthy.
You will discover where you want to go, where you are currently, what has held you back in the past, and how to speed up that process.
To Your Success!
Many people are fear full of trading, but are you aware that trading should be used as part of your five Pillars to wealth, even if you are a beginner?
Here is your free 60 min audio recording of the Beginners Guide to the Stock Market!
Press here to listen
I recommend that you listen to this recording as soon as possible to really get the learning's. You will also get a FREE 45 minute 1-2-1 telephone consultation to maximise the value you get from this recording.
The wealth consultation is conducted by an experienced consultant. This 45 minute session, held on the telephone, will reveal valuable information you need to become financially wealthy.
You will discover where you want to go, where you are currently, what has held you back in the past, and how to speed up that process.
To Your Success!
Wednesday 17 June 2009
Trading Diary June 17th
Ig charts had a problem on Monday so I could not trade much. I also had a few meetings on Tuesday, so again I could not trade much.
Wednesday had many announcements that could throw trades for or against you. I took 21 pips on gbp
/usd (Cable) as it broke over the 50 mark at 16454.4, exit was 16476.7.
Cable then dropped horribly on fear of high Job losses due to be announced for 09:30 (GBP Claimant Count Change) and (GBP MPC Meeting Minutes) Many of the FX markets dropped with fear.
The Graph shows the spike Created at 9.30, there was a false rise then continued to plummet!
Wednesday had many announcements that could throw trades for or against you. I took 21 pips on gbp
/usd (Cable) as it broke over the 50 mark at 16454.4, exit was 16476.7.Cable then dropped horribly on fear of high Job losses due to be announced for 09:30 (GBP Claimant Count Change) and (GBP MPC Meeting Minutes) Many of the FX markets dropped with fear.
The Graph shows the spike Created at 9.30, there was a false rise then continued to plummet!
Tuesday 16 June 2009
Trading Diary 15th June
Some of the skype Trading Group are now taking some extreme points on FX !
Toj has taken the record and not often will I do this but here is his skype chat of how it happened!
15/06/2009 16:40:40 Tojomul: I had a great day. Was short USD CAD from Friday and just closed out with 169 pips. Also shorted EUR/USD at 8am this morning and just Closed out with 106 pips, total 275 pips, well happy :), still short GBP/USD.
So Toj now holds the record for most points on FX in one trade (169 pips) and most pips in a day. He has slightly modified the strategy and used it intra day to cane some pips from Friday.
Ftse continues the current pattern of going virtually first time! 20 points in 10 minutes has become a regular occurrence recently!
I will be testing the strategy on the Dax!
Toj has taken the record and not often will I do this but here is his skype chat of how it happened!
15/06/2009 16:40:40 Tojomul: I had a great day. Was short USD CAD from Friday and just closed out with 169 pips. Also shorted EUR/USD at 8am this morning and just Closed out with 106 pips, total 275 pips, well happy :), still short GBP/USD.
So Toj now holds the record for most points on FX in one trade (169 pips) and most pips in a day. He has slightly modified the strategy and used it intra day to cane some pips from Friday.
Ftse continues the current pattern of going virtually first time! 20 points in 10 minutes has become a regular occurrence recently!
I will be testing the strategy on the Dax!
Monday 8 June 2009
How to Achieve Spectacular Gains Trading!
BREAKING DOWN YOUR GOALS!
The way to achieve great results is to take an ambitious goal and break it down into small, achievable pieces.
When I give a seminar or address a group of traders, I sometimes ask the following question: “How many people in the room feel that a goal of a 100 percent annual return is an aggressive goal?”
Many people in the room will raise their hands at this point, because a 100 percent annual return does seem to be an ambitious target.
Then, I’ll follow up with this question: “How many people in the room feel that a goal of a consistent 6 percent monthly return is too aggressive?” The hands go down, as almost nobody in the room feels that this is an aggressive target.
The punch line is that the goals are one and the same. If a trader can increase
the value of the account by just 6 percent per month on a consistent basis, he or she will achieve an annual gain of about 100 percent. I know what some of you are thinking.
“Wait a minute—6 percent per month multiplied by 12 months per year equals a 72 percent return, not a 100 percent return! Ed has surely lost his mind—from all that loud music, no doubt!”
Perhaps, but don’t fit me for a straitjacket just yet. Whip out a calculator
and perform the following exercise:
Starting with a base number of 100 (the “account”), multiply by 1.06 (a 6 percent gain) to calculate your first month’s result (106).
Then multiply that result by 1.06, and keep doing this until you have calculated an entire year’s worth of results (12 months). You should end up with the following (note that some numbers are rounded, but this has no material effect on the results):
Month 1: 100 × 1.06 = 106.00
Month 2: 106 × 1.06 = 112.36
Month 3: 112.36 × 1.06 = 119.102
Month 4: 119.102 × 1.06 = 126.248
Month 5: 126.248 × 1.06 = 133.822
Month 6: 133.822 × 1.06 = 141.852
Month 7: 141.852 × 1.06 = 150.363
Month 8: 150.363 × 1.06 = 159.385
Month 9: 159.385 × 1.06 = 168.948
Month 10: 168.948 × 1.06 = 179.084
Month 11: 179.084 × 1.06 = 189.830
Month 12: 189.830 × 1.06 = 201.219
The account has climbed from a base of 100 to over 200 in one year, an annual gain of just over 100 percent. In order to replicate the results for different-sized trading accounts, add zeros to the base as necessary.
In other words, if the base were 1,000, or 10,000, or 100,000, the percentage
gains would remain the same. Because the gains are a consistent 6 percent, we are building off of a higher base every month. This is similar to the power of compounding.
CONSISTENCY IS THE KEY
This is not to suggest that a monthly gain of 6 percent is easy to achieve, but it does demonstrate the power of breaking our goals down into manageable targets. Consistency is the key; it is not that difficult to achieve a 6 percent return in any given month, but it is considerably harder to achieve a minimum 6 percent return every month.
We said at the outset that we’d start with a relatively easy target, and gradually work our way to the next plateau. Instead of starting out with a monthly goal of 6%, why not begin with a monthly goal of just 1 percent or 2 percent? A goal like this is unlikely to put much pressure on a trader, which is good—trading can be stressful enough without any additional pressure.
Achieving a goal of just 1 percent per month would put you well ahead of most traders, since the majority of traders lose money. While a goal of 2 percent per month may not sound awe inspiring, if we can achieve it consistently, the annual gain will be just shy of 27 percent—and you’ll have outperformed most mutual funds and hedge funds.
If you have successfully achieved your modest goal for three months in a row, raise the goal to the next plateau—from a 1 percent monthly goal to 2 percent, or from 2 percent to 3 percent, and so on. Don’t rush through this process; remember, as you gain experience and confidence, you will be a better trader in the future than you are now, and you’ll be better suited to
more aggressive goals.
Here is the breakdown of monthly goals and their annual equivalents (again, please note that some numbers are rounded, but this has no material effect on the results):
1 percent every month = 13 percent annual return
2 percent every month = 27 percent annual return
3 percent every month = 42 percent annual return
4 percent every month = 60 percent annual return
5 percent every month = 79 percent annual return
6 percent every month = 100 percent annual return
7 percent every month = 125 percent annual return
8 percent every month = 151 percent annual return
9 percent every month = 181 percent annual return
10 percent every month = 214 percent annual return
TAKE CONTROL OF YOUR TRADING DESTINY
By the time you work your way up to consistent monthly returns of 3 percent and then 4 percent, you’ll be putting up respectable numbers, and you’ll have gained the benefit of months of experience.
At this point, you’ll no longer be like that teenage driver with a learner’s permit; instead, you’ll be more like a driver who is comfortable and confident behind the wheel, in complete control of your vehicle, with the ability to anticipate trouble before it happens. You will have progressed to a higher plateau.
Of course, there will still be goals for which to strive. If you can achieve consistent monthly gains of 5 percent or 6 percent, you will have truly joined the elite.
At this point, you can continue to increase your goals, or perhaps you will have found your “comfort zone.” Remember, you don’t have to continually increase your goals if you don’t feel that you’re ready to do so—or if you just don’t want to. Your personal comfort with your goal
should also be a consideration.
WHAT HAPPENS WHEN I REACH MY GOAL?
Once you’ve achieved your goal, you don’t have to stop trading, but you can take precautions to safeguard your gains. In trading, we use a stop on every trade to limit losses and protect gains. Why not use that same philosophy to protect your monthly returns?
For instance, assume that a trader’s goal is a consistent monthly profit of 5 percent. After reaching this goal, she continues trading, and her gain for the month climbs to 10 percent.
The trader now calculates a “stop” for the entire account, at the point where the gain was equal to 5 percent. If the monthly gain falls back from 10 percent to 5 percent, she stops trading
for the month, and has still achieved her monthly goal. She can continue trading in a demo account for the remainder of the month.
What if you encounter problems and can’t meet your objective? If you are consistently failing to meet your goals, they may be too aggressive. Try for an easier target. If things get really tough, cease live trading and switch to a demo account until you regain your footing.
Some traders feel that demo trading is beneath them, but sometimes you have to sacrifice your
ego if you’re serious about making money as a trader. Don’t allow foolish pride to stand in the way of your long-term success.
The way to achieve great results is to take an ambitious goal and break it down into small, achievable pieces.
When I give a seminar or address a group of traders, I sometimes ask the following question: “How many people in the room feel that a goal of a 100 percent annual return is an aggressive goal?”
Many people in the room will raise their hands at this point, because a 100 percent annual return does seem to be an ambitious target.
Then, I’ll follow up with this question: “How many people in the room feel that a goal of a consistent 6 percent monthly return is too aggressive?” The hands go down, as almost nobody in the room feels that this is an aggressive target.
The punch line is that the goals are one and the same. If a trader can increase
the value of the account by just 6 percent per month on a consistent basis, he or she will achieve an annual gain of about 100 percent. I know what some of you are thinking.
“Wait a minute—6 percent per month multiplied by 12 months per year equals a 72 percent return, not a 100 percent return! Ed has surely lost his mind—from all that loud music, no doubt!”
Perhaps, but don’t fit me for a straitjacket just yet. Whip out a calculator
and perform the following exercise:
Starting with a base number of 100 (the “account”), multiply by 1.06 (a 6 percent gain) to calculate your first month’s result (106).
Then multiply that result by 1.06, and keep doing this until you have calculated an entire year’s worth of results (12 months). You should end up with the following (note that some numbers are rounded, but this has no material effect on the results):
Month 1: 100 × 1.06 = 106.00
Month 2: 106 × 1.06 = 112.36
Month 3: 112.36 × 1.06 = 119.102
Month 4: 119.102 × 1.06 = 126.248
Month 5: 126.248 × 1.06 = 133.822
Month 6: 133.822 × 1.06 = 141.852
Month 7: 141.852 × 1.06 = 150.363
Month 8: 150.363 × 1.06 = 159.385
Month 9: 159.385 × 1.06 = 168.948
Month 10: 168.948 × 1.06 = 179.084
Month 11: 179.084 × 1.06 = 189.830
Month 12: 189.830 × 1.06 = 201.219
The account has climbed from a base of 100 to over 200 in one year, an annual gain of just over 100 percent. In order to replicate the results for different-sized trading accounts, add zeros to the base as necessary.
In other words, if the base were 1,000, or 10,000, or 100,000, the percentage
gains would remain the same. Because the gains are a consistent 6 percent, we are building off of a higher base every month. This is similar to the power of compounding.
CONSISTENCY IS THE KEY
This is not to suggest that a monthly gain of 6 percent is easy to achieve, but it does demonstrate the power of breaking our goals down into manageable targets. Consistency is the key; it is not that difficult to achieve a 6 percent return in any given month, but it is considerably harder to achieve a minimum 6 percent return every month.
We said at the outset that we’d start with a relatively easy target, and gradually work our way to the next plateau. Instead of starting out with a monthly goal of 6%, why not begin with a monthly goal of just 1 percent or 2 percent? A goal like this is unlikely to put much pressure on a trader, which is good—trading can be stressful enough without any additional pressure.
Achieving a goal of just 1 percent per month would put you well ahead of most traders, since the majority of traders lose money. While a goal of 2 percent per month may not sound awe inspiring, if we can achieve it consistently, the annual gain will be just shy of 27 percent—and you’ll have outperformed most mutual funds and hedge funds.
If you have successfully achieved your modest goal for three months in a row, raise the goal to the next plateau—from a 1 percent monthly goal to 2 percent, or from 2 percent to 3 percent, and so on. Don’t rush through this process; remember, as you gain experience and confidence, you will be a better trader in the future than you are now, and you’ll be better suited to
more aggressive goals.
Here is the breakdown of monthly goals and their annual equivalents (again, please note that some numbers are rounded, but this has no material effect on the results):
1 percent every month = 13 percent annual return
2 percent every month = 27 percent annual return
3 percent every month = 42 percent annual return
4 percent every month = 60 percent annual return
5 percent every month = 79 percent annual return
6 percent every month = 100 percent annual return
7 percent every month = 125 percent annual return
8 percent every month = 151 percent annual return
9 percent every month = 181 percent annual return
10 percent every month = 214 percent annual return
TAKE CONTROL OF YOUR TRADING DESTINY
By the time you work your way up to consistent monthly returns of 3 percent and then 4 percent, you’ll be putting up respectable numbers, and you’ll have gained the benefit of months of experience.
At this point, you’ll no longer be like that teenage driver with a learner’s permit; instead, you’ll be more like a driver who is comfortable and confident behind the wheel, in complete control of your vehicle, with the ability to anticipate trouble before it happens. You will have progressed to a higher plateau.
Of course, there will still be goals for which to strive. If you can achieve consistent monthly gains of 5 percent or 6 percent, you will have truly joined the elite.
At this point, you can continue to increase your goals, or perhaps you will have found your “comfort zone.” Remember, you don’t have to continually increase your goals if you don’t feel that you’re ready to do so—or if you just don’t want to. Your personal comfort with your goal
should also be a consideration.
WHAT HAPPENS WHEN I REACH MY GOAL?
Once you’ve achieved your goal, you don’t have to stop trading, but you can take precautions to safeguard your gains. In trading, we use a stop on every trade to limit losses and protect gains. Why not use that same philosophy to protect your monthly returns?
For instance, assume that a trader’s goal is a consistent monthly profit of 5 percent. After reaching this goal, she continues trading, and her gain for the month climbs to 10 percent.
The trader now calculates a “stop” for the entire account, at the point where the gain was equal to 5 percent. If the monthly gain falls back from 10 percent to 5 percent, she stops trading
for the month, and has still achieved her monthly goal. She can continue trading in a demo account for the remainder of the month.
What if you encounter problems and can’t meet your objective? If you are consistently failing to meet your goals, they may be too aggressive. Try for an easier target. If things get really tough, cease live trading and switch to a demo account until you regain your footing.
Some traders feel that demo trading is beneath them, but sometimes you have to sacrifice your
ego if you’re serious about making money as a trader. Don’t allow foolish pride to stand in the way of your long-term success.
Trading Diary June 8th
FTSE:
Ok so ftse trade went well this morning and I gained a nice 29 pips! But, as with a couple of days ago. I got greedy on oil and went for maximum target of 40 pips!
At 35 pips up I should have taken the points....
But another good lesson, as you can see oil retracted and I lost 40 pips (Fig 2).
Ok so ftse trade went well this morning and I gained a nice 29 pips! But, as with a couple of days ago. I got greedy on oil and went for maximum target of 40 pips!
At 35 pips up I should have taken the points....But another good lesson, as you can see oil retracted and I lost 40 pips (Fig 2).
My saving grace was I protected revenue won on ftse. Not a happy bunny but purely my own doing!
I missed some fantastic trades on FX with many of the skype group making 60 and 70 pips on Eur/Gbp and Cable!
Peter Cullen of the Skype trading group broke the record and took 152 pips last week Thursday. Admittedly it was around the MPC announcement and at one time he was 250 pips up (Crazy)
Peter had the accolade taken away by Susannah when she let a trade run for 100 pips the previous Friday. So the bar has been set 152 pips on a two hour trade....Some good going!
Fig:2 Oil
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