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-   -   How to rescue a losing position? (http://www.forexfactory.com/showthread.php?t=400463)

incomeideas Dec 14, 2012 12:55am | Post# 1

Hi All,

This thread is NOT about whether to use stop loss/hedging, but searching for some practical and feasible recovery method(s) on how to rescue a losing position.

Please vote whether you are using any rescue method, do share more if you are using one.

Thanks in advance.

Background :
#21, #37

Interesting posts :
#46, #49
http://www.forexfactory.com/showthread.php?t=58511
http://www.forexfactory.com/showthre...31#post1723631

Book(s) :
1. Turning Losing Forex Trades into Winners
Author - Gerald E. Greene
John Wiley & Sons, Inc

TPOTrader Dec 14, 2012 2:25am | Post# 2

Hi All,

Am searching for some practical and feasible recovery method(s) on how to rescue a losing position, anyone has any idea ?

Thanks in advance.
If by rescuing you mean not accepting the loss; there are many ways:
1. hedging - opening trades in pairs with high negative correlation
2. grid trading - assuming you started your initial position with small size you can keep buying/selling at "better" prices until your margin runs out-hopefully you only need a small retracement to get out at b/e
3. No stop loss- just let that sucker go negative and pray

but if you really want to be a professional trader, getting out of losing position quickly is something you want to ingrain in your method, not 'rescuing' it. Just let it go and move on.

mfoste1 Dec 14, 2012 2:32am | Post# 3

Hi All,

Am searching for some practical and feasible recovery method(s) on how to rescue a losing position, anyone has any idea ?

Thanks in advance.

yea, close it

incomeideas Dec 14, 2012 2:49am | Post# 4

If by rescuing you mean not accepting the loss; there are many ways:
1. hedging - opening trades in pairs with high negative correlation
2. grid trading - assuming you started your initial position with small size you can keep buying/selling at "better" prices until your margin runs out-hopefully you only need a small retracement to get out at b/e
3. No stop loss- just let that sucker go negative and pray

but if you really want to be a professional trader, getting out of losing position quickly is something you want to ingrain in your method,...
Thanks for your reply TPOTrader.
Yes, I've looked into hedging but not with high negative correlation pair, but using another account for opposite trade on the same pair.
For your point 2 & 3, I don't see their feasibility.

kinspk Dec 14, 2012 2:49am | Post# 5

You may wait for retracement to cut losses. Or either check out higher tf for direction, if its against ur trade, close it then if its not, wait for it to turn it your way. I consider it as part of hedging, scaling, etc in a smaller tf. If entry is enter base on flexibility, losses can be cut down easily, but usually this is like sniping for entry. *yawn* anyway this is my opinion, may not work for others.

incomeideas Dec 14, 2012 2:52am | Post# 6

yea, close it
Thanks for your reply mfoste1.
Not that I don't accept losses as part of my businsess. But I believe accepting loss should be the last option, there should be some ways to minimise or alleviate the loss.

mfoste1 Dec 14, 2012 2:59am | Post# 7

Thanks for your reply mfoste1.
Not that I don't accept losses as part of my businsess. But I believe accepting loss should be the last option, there should be some ways to minimise or alleviate the loss.
No secrets, close a losing position as soon as you realize its a loser. Cut your losers fast, simple as that.

incomeideas Dec 14, 2012 3:25am | Post# 8

You may wait for retracement to cut losses. Or either check out higher tf for direction, if its against ur trade, close it then if its not, wait for it to turn it your way. I consider it as part of hedging, scaling, etc in a smaller tf. If entry is enter base on flexibility, losses can be cut down easily, but usually this is like sniping for entry. *yawn* anyway this is my opinion, may not work for others.
Thanks for your reply kinspk.

I guess the main challenge is when to engage hedging and when to release it.
The FIFO policy also affect how we scale.

FerruFx Dec 14, 2012 3:57am | Post# 9

But I believe accepting loss should be the last option
Absolutely not. It should be the very first option ... and even the only option you should use.

realjumper Dec 14, 2012 4:04am | Post# 10

No secrets, close a losing position as soon as you realize its a loser. Cut your losers fast, simple as that.
Amen to that

WideEyed Dec 14, 2012 6:45am | Post# 11

Hi All,

Am searching for some practical and feasible recovery method(s) on how to rescue a losing position, anyone has any idea ?

Thanks in advance.
Read this: Phantom of the Pits. Long winded but invaluable advice on scaling into and out of positions.

ddinnov Dec 14, 2012 6:52am | Post# 12

Absolutely not. It should be the very first option ... and even the only option you should use.
This

incomeideas Dec 14, 2012 7:02am | Post# 13

Read this: Phantom of the Pits. Long winded but invaluable advice on scaling into and out of positions.
Thanks for the article WideEyed.

Ezekiel Chew Dec 15, 2012 1:15am | Post# 14

Thanks for your reply mfoste1.
Not that I don't accept losses as part of my businsess. But I believe accepting loss should be the last option, there should be some ways to minimise or alleviate the loss.
Options to rescue a losing position:

 

  1. Stop loss and realise your losses the sooner the better
  2. If you have ample excess margin you can excercise straddling or averaging but sometimes its risky, averaging at support/ressistance, retracement level
  3. hedging using another ccy pair or cross-rate pair
** But the best option will still be stop loss

2+2=4ex Dec 15, 2012 1:36am | Post# 15

You don't rescue a losing position. You just make trades to the best of your ability and they either make a gain or a loss in the end. There is nothing else to do. You can't will a trade to profit. Therefore you cannot rescue a trade that has already been made. You can only control when to get in and when to get out.

2+2=4ex Dec 15, 2012 1:38am | Post# 16

Absolutely not. It should be the very first option ... and even the only option you should use.
No secrets, close a losing position as soon as you realize its a loser. Cut your losers fast, simple as that.

saulimus Dec 15, 2012 6:23am | Post# 17

I agree with the guys here.
You can't do anything to a trade to make it profitable, so there's no way to rescue it.
(unless you possess the divine power to make someone buy/sell the instrument at will)
It's already a loss. You can only do new, better trades in the future.

hanover Dec 15, 2012 6:39am | Post# 18

Exit the position. There's no way of rescuing it. Price will do whatever it was going to do anyway, no matter what you do.

Hedging (in the same pair) offers no advantage — it is mathematically exactly the same as exiting, by returning your overall exposure to zero. Think about it.

Trade the probabilities offered by the market, or according to the rules of your plan. Making trading decisions based on your P/L is a losing game.

>Apocalypto< Dec 15, 2012 7:10am | Post# 19

Hi All,

Am searching for some practical and feasible recovery method(s) on how to rescue a losing position, anyone has any idea ?

Thanks in advance.
close it or let it hit stop, forget it move on and wait for your next set up.

Pipanator Dec 15, 2012 7:21am | Post# 20

1. Use an option
2. Accept the loss and change strategy to cut losses price will always retrace most of the time to 50%
3. If its a volatile news or any big move get out instantly if slow move half your losses.


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