Managing my heavy losing position (demo).
I was surprised by Friday's up swing, and overenthusiastic in increasing the short, ending up with with 45% of equity 23 PiPs underwater at closing. The account is 400:1 (28 PiPs is around 100% of position). Margin call is at 100% margin level and stop out at 50%. Clearly a very bad situation. The yellow line is the average price of the short position, drawn by the Wolseley Panel indicator. Round Numbers indicator is applied on the price scale set at 25 PiPs interval. Both are free downloads.
I believe the down swing that started mid week is not over and that price will resume the down from Friday's high or from just above 1.105 (so, within the grey rectangle). Here's what I'll do. I will take out the biggest losing order (reduce the short) at the red dashed line. I will sell at the dashed green line (increase the short); I call it BLashing and SHabling, from buy low sell high, or reduce position upon favorable impulses and increase upon adverse impulses (as long as I believe I'm on the right side).
If price goes above the grey rectangle, I'll blow up the account (I am waaay overextended!). The cluster of red dashed lines are TPs for all the open shorts. They are placed lower than 1.094 where I see the first opportunity for the down swing to end and will close them manually before then. If price will go directly to 1.0925 that will be the green light to go lower still, but it won't happen without first going back up above Friday's close [*] before resuming down. Breaking a level is like booking the trend continuation, but it will go in the opposite direction first. The very same event I failed to notice on Friday! It broke the previous low (Tuesday's) technically breaking the up trend, and triggered a reflexive counter move up. Bigger picture (looking at the daily) I expect the up trend to resume (some time, from somewhere...)
On Friday I was in the same situation with my real money account but with much smaller size and higher position price which allowed me to get out unscathed during the down from the top. I will build my short fresh on Monday and manage it if they take price further up above the grey rectangle.
* Friday's low, I meant
Temperance (restraint in action, thought or feeling) is a virtue.
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