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Seek for advise on EU Trades

  • #1
  • First Post: May 13, 2010 2:45pm May 13, 2010 2:45pm
Hello everyone,
beeing quite an unexperienced manual trader (mostly trated with EAs so far only) I would like to seek for your advice on my following account situation which is getting more and more critical for me :

I have some EU BUY trades taken at 1.37 , total 0.3 lots
which were left over by a signal service who suddenly dissapeared from market about a month ago.
Hoping for a EU recovery,
I entered another 0.3 lots BUY about 1 week ago,
at 1.2690 , so I could close all trades at BE when reaching about 1.33

Unfortuantelly the EU recovery does not seem to take place, instead the downtrend is rather more accelerating, bringing me in a more and more difficult situation. Free margin now down to 800% I am on 1:100 leverage.

So what whould you advise me to do ?
Enter 0.6 lots SELL (or more) to hedge the trades (my broker allows hedging) ? Or go for another BUY trade ?

Many thanks in advance for everybody's help.

B/R Michael
  • #2
  • May 13, 2010 3:04pm May 13, 2010 3:04pm
Quoting brc021
Hello everyone,
beeing quite an unexperienced manual trader (mostly trated with EAs so far only) I would like to seek for your advice on my following account situation which is getting more and more critical for me :

I have some EU BUY trades taken at 1.37 , total 0.3 lots
which were left over by a signal service who suddenly dissapeared from market about a month ago.
Hoping for a EU recovery,
I entered another 0.3 lots BUY about 1 week ago,
at 1.2690 , so I could close all trades at BE when reaching about 1.33

Unfortuantelly the EU recovery...
Hello Michael,

Let me just start by saying I am sorry to hear about your predicament. I am not qualified to tell you what you should do but if I were in your situation I would definitely not add any more buy's!

If I understand you correctly you have 0.3 lots sitting on a drawdown of over 1000 pips and another 0.3 lots with a drawdown of around 200 pips. Is that right?

The problem you have with hedging them is that you have let the trades go an awful long way into the red before placing your hedge - suppose you sell 0.6 lots and then the price starts going up - you will recover your current losses but you will create a whole new set of losses in doing so.

How certain are you that the EU is going to make a recovery soon? Personally I see the current trend as down and would not be buying (I don't mean that in a condescending way).

I think if it were me I would close the trades and learn from the mistake - but that is just if it were me!

In terms of your account was % loss are you looking at?

I hope that helps!

Regards,

Dan
  • #3
  • May 13, 2010 3:24pm May 13, 2010 3:24pm
hope has gotten you this far so you may as well let it take you all the way to margin call.
In trading, there is no bullshit. You either make money or you don't.
  • #4
  • May 13, 2010 3:24pm May 13, 2010 3:24pm
Quoting DanUK
Hello Michael,

Let me just start by saying I am sorry to hear about your predicament. I am not qualified to tell you what you should do but if I were in your situation I would definitely not add any more buy's!

If I understand you correctly you have 0.3 lots sitting on a drawdown of over 1000 pips and another 0.3 lots with a drawdown of around 200 pips. Is that right?

The problem you have with hedging them is that you have let the trades go an awful long way into the red before...
Hello Dan,
thanks for your reply. Yes, you understood my account situation correctly.
Closing the trades at this moment would cause me about 30 % loss on my account. But to make things worse I have some more EURCHF and EURCAD BUY trades, also left over from that signal service, not really looking much better , so if closing all of them I would be about 50 % down, this I am quite reluctant in doing so, and rather looking for a strategy to help me out of the situation.

On EU I was thinking of taking a slightly larger sell trade, than my buys,
eg. 0.8 lots, so when EU further trending down, I would be reducing my overal loss, and so eventually could close some of the buy trades step by step.
If price would retrace and move up to the entry of the sell, I would close the Sell trade at BE and let the Buys trade run.

Any thoughts on this "mergency" strategy ?

Anyway, many thanks for everybody's comments & help

B/R Michael
  • #5
  • May 13, 2010 3:41pm May 13, 2010 3:41pm
Hi Michael
Sorry to hear about your problem, but, and this is just my personal opinion, i would just close the trades.
If you can get out with any part of your account intact, then thats a bonus.
Presumably these trades were taken without any stoploss being placed.
Hedging, or doubling up in the opposite direction, could open up new problems, and would really be a last throw of the dice.
To me the trend is down, has been for quite a while.
If it were me, i would get out, count it as an expensive lesson on taking signals, and re-evaluate my whole trading perspective.

Sorry if it's negative, good luck whatever you decide.
  • #6
  • May 13, 2010 3:49pm May 13, 2010 3:49pm
Quoting brc021
Hello Dan,
thanks for your reply. Yes, you understood my account situation correctly.
Closing the trades at this moment would cause me about 30 % loss on my account. But to make things worse I have some more EURCHF and EURCAD BUY trades, also left over from that signal service, not really looking much better , so if closing all of them I would be about 50 % down, this I am quite reluctant in doing so, and rather looking for a strategy to help me out of the situation.

On EU I was thinking of taking a slightly larger sell trade, than my buys,...
Hi Michael,

50% loss is very bad of course but it could be worse... you could loose the whole lot!

Holding onto your positions any longer seems very dangerous to me. It's easy for me to say cut the positions because it is not me who would loose out but I honestly think if I were facing the possibility of a complete wipe out I would close them now and try to recover as best I could. Of course you would be extremely pissed off if you did that and then price were to turn around and go up BUT unless you have any evidence of that happening I wouldn't do it on hope alone!

If you do hedge your trades you may recover your losses assuming the trend continues but as you know there is no guarantee... you could end up increasing your losses if the trend suddenly changed.

To be honest at this point I would have to pull out. I would cut my losses and step back from trading until I had re-funded my account. I would also not start trading again until I had become profitable (again?) on a demo account.

Sorry if that isn't very positive!

Regards,

Dan
  • #7
  • May 13, 2010 4:11pm May 13, 2010 4:11pm
Your in a bad situation friend. No matter what trade decisions you make at this point, your going to be a loser because your psychology is compromised. If you have any hope of being in this game much longer, I suggest you close everything and take the summer off. Pull you rmoney out and close your account. Come back in October and start over with a fresh mind on demo. Make some bank and then open a new account with a new p&l.
  • #8
  • May 14, 2010 2:02am May 14, 2010 2:02am
1.25 is an interesting level and there might be a bounce here but get out now, while you can. I tell you not many professional traders will be betting the farm on a bounce off 1.25.

I mean "like a ton of bricks" doesn't properly describe the Euro...
Gone to a better place
  • #9
  • May 14, 2010 3:12am May 14, 2010 3:12am
As I see it, you have two options.

1. Exit the trades and take your loses
2. 'hope' the trades come back, risking the rest of your account.

I guess a lot depends on how important the money is to you.

Number 1, is the best option, but possibly the hardest to take, but being able to take a loss is a very important aspect of trading.

If the money is insignificant, well I guess it doesn't matter as much, but also if you take option 2 it clearly shows you aren't ready for trading a live account yet.
  • #10
  • May 14, 2010 3:20am May 14, 2010 3:20am
Your Problem is not your floating loss your problem is that you are afraid of taking responsability. Otherwise you wouldn't waste time with EAs and Signal Services. It is guaranteed that you will never make any money this way you could aswell just flush it down the toilett.

No one knows where EU will be in 3 months and your questions just proves what I already said. Close the trade. Go back to demo. Take it as a lesson.
Live with it.
  • #11
  • May 14, 2010 3:46am May 14, 2010 3:46am
Quoting TJPLD
Your Problem is not your floating loss your problem is that you are afraid of taking responsability. Otherwise you wouldn't waste time with EAs and Signal Services. It is guaranteed that you will never make any money this way you could aswell just flush it down the toilett.

No one knows where EU will be in 3 months and your questions just proves what I already said. Close the trade. Go back to demo. Take it as a lesson.
Live with it.
I will agree with this comment wholeheartedly. You are looking for someone to bail you out of a situation that you should not have been in in the first place. To trade without SLs and then hoping for a recovering is a fundamental error in judgement. Do yourself a favour. Take responsibility for the trade. Close the positions and re -evaluate your approach. 50% drawdown is recoverable overtime which you still have. TO hope for a major rally on a currency that is falling like a stone is a waste of time and you will just kick yourself if the 1.25 barrier is eclipsed like so many other support zones. Hedging would be at cost, more buys will average out your position and leave you short changed in the event a recovery doesnt happen/

Taking losses is a part of the game. Not utilising a SL, whether it is mental or a hard positioned SL is reckless and you are now experiencing why few people do it. Take the loss, re evaluate and move on. Learn some basics, go back to demo/paper trading and forget the signal services. Those guys are right and wrong 50% of the time anyway.

BTW this message is meant to sound harsh. It is a reality that this realm is a killer for the ill prepared so I do not sugar coat messages for those who know what they need to do but seek someones advice on whether they should or shouldnt do what is needed.

Razor
  • #12
  • May 14, 2010 4:04am May 14, 2010 4:04am
Quoting Razor_trader
killer .... ill prepared ......so I do not sugar coat messages .....
Goodness me! I'm feeling suicidal now...
Gone to a better place
  • #13
  • May 14, 2010 4:26am May 14, 2010 4:26am
Quoting smikester
Goodness me! I'm feeling suicidal now...
I know a good building where there are plenty of options Ill even let you borrow my little avatar if you need... Oh I didnt see the little yellow fella rolling on the floor there my bad
  • #14
  • May 14, 2010 4:57am May 14, 2010 4:57am
If you will notice.... all of the advice here has been very much the same. Take note.

As far as adding or adjusting your current position..... No one can tell you what to do. Do you think that we "know" exactly what is going to happen next ?? Of course we do not. So....

Any new positions or changes that are taken must be taken by you. And they need to be taken on a market strategy that has merit. Even if someone here convinced you that the Euro will in fact continue to fall, you may very well enter your new positions at the wrong time causing further drawdown, and further personal pain.

The point here is that decisions must be made based on a sound method. Without that you're just guessing.

Guessing right now..... will likely wipe your account all the way out. There is no difference to entering new positions now --and entering new positions after you have closed these all out and taken the time to get yourself started in the right direction next time.

1.25 has now been tossed on the Euro (124.40), but it is also about 6am New York..... in my experience >> not the best time to be adding new positions.

It is never a good time to add on fear, hope, and desperation.

Me ?? Close it before it's all gone.
  • #15
  • May 14, 2010 11:19am May 14, 2010 11:19am
Well I can only hope that you heeded the words to cut the trades. EUR/USD is now to the point when the Sub Prime debacle occured and I see nothing stopping this pair heading well past the double dip point. 1.2500 didnt even register, the pair, like and express train on route to a destination when right past that station.

Razor
  • #16
  • May 14, 2010 11:52am May 14, 2010 11:52am
Quoting Razor_trader
1.2500 didnt even register, the pair, like and express train on route to a destination when right past that station.

Razor
Yep... and I was hoping for a little bounce there to add to my shorts lol!
  • #17
  • May 14, 2010 12:20pm May 14, 2010 12:20pm
Quoting DanUK
Yep... and I was hoping for a little bounce there to add to my shorts lol!
best way to add a little bounce to your shorts is to wear looser underwear, at least that will offer a better chance than relying on the Eur/usd
  • #18
  • May 14, 2010 6:56pm May 14, 2010 6:56pm
Quoting ToxicChili
best way to add a little bounce to your shorts is to wear looser underwear
That is gold
  • #19
  • Last Post: May 15, 2010 4:36am May 15, 2010 4:36am
Quoting ToxicChili
best way to add a little bounce to your shorts is to wear looser underwear, at least that will offer a better chance than relying on the Eur/usd
nice one!
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