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Can I recover trades with only 10% equity left? Please help!

  • #161
  • Edited 3:17pm Nov 29, 2014 2:59pm | Edited 3:17pm
The monthly 200SMA is sitting around the 1.2225 area and has been supportive of price for several years now. Price may need to check in with this area before we see a significant bounce. As you can see, a very simple 8-5-3 Stochastic indicator might have offered you a clue to shy away from a long position at the 1.36 level as it was showing overbought conditions while price was at your long entry level. I do not use this indicator myself, but it is relatively easy to see that it is fairly in tune with the turns in price.

That being said, we can see now that the indicator is again 'oversold'... and price is again approaching the 200SMA . Will price bounce a third time off of the 200SMA ? Will price break below the 200SMA and continue to the downside? No one knows for sure... Offered here is a "simple" example of technical analysis... a very very very simple example that might have helped you stay away from the 1.36 long... or might help you stay out of the next bad trade... eventually it might help you enter a winning trade... again, a very basic example of TA.

A stop at 1.34 would have been a big loss, 200 pips - right? Using that 1.34 level to exit the market & take your loss would have been painful... however, spending the next several months learning some real simple and basic technical analysis would have been far less painful & costly than the 1200 pip drawdown you now sit on...

For four, five, six months now - or so - you have spent countless amounts of psychological energy trying to figure a way out of a very very bad trading situation. As traders we have two (2) accounts, our trading margin account and our psychological account... A trader can re-up the margin account, the psychological account can take some traders years to repair.

Now, knowing price CAN run against you, will that fear effect your next trade? How many winning trades did you miss out on because the energy you had was solely directed at getting out of a bad situation? these are questions you may have to deal with in the future....

I won't tell you when or where to open & close your positions... I won't tell you the wrong or right way & time to hedge...

My 2 pips worth is a suggestion of education & knowledge in technical analysis, margin, risk, paytience and discipline. (Yes... I spelled paytience this way on purpose)...

Keep an eye on that monthly 200SMA while your learning... IF price is going to bounce off of it, you can anticipate where price may bounce to - as well as how long it may take for price to get there... if it breaks below, your new education might help you anticipate how low it could fall.

To blindly enter $800K into the market without educating yourself IS gambling... your odds may be better at a blackjack table in Vegas.

To educate yourself, develop & practice a specific trading strategy until you know what to do in any outcome - including a move against you - before entering the market with $800K is putting yourself into a higher probability trading situation.

wishing you success on your situation and your education. Best Regards
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  • #162
  • Nov 29, 2014 3:39pm Nov 29, 2014 3:39pm
OK, I’ll throw my hat into the ring, FWIW.

I’d be very cautious about doing anything until the gold vote has resolved itself, especially as EUR and CHF are generally highly correlated. Jarratt Davis (my primary economic read) was overall bearish on EURUSD last week, and the numbers came out pretty much as he thought that they would; reading between the lines, he apparently believes EU can go lower in the medium term. I would wait for his weekly commentary for the upcoming week.

Technically, EU remains in a downtrend, although this appears to be slowing, with a double bottom at 1.2360, which I see as offering resistance, at the bottom of the demand zone. I definitely wouldn’t be looking to buy EU unless/until there was a dramatic trend change, both FA and TA wise, but if I had to trade EU, I would look to take cautious sells, if I could find suitable bearish PA in lower TF supply zones, above the white median line (see attached chart) and preferably above/around the green line, allowing low risk entries, and allowing up to ~ 100 pips worth of profit following price down into the major demand areas. For a hedged trader this would mean closing buy positions, at a loss if necessary, to leave himself net short.

But the gold vote could potentially have a very significant effect.
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  • #163
  • Nov 29, 2014 5:36pm Nov 29, 2014 5:36pm
Quoting srt
{quote} Seems pretty likely to me. Pimco had $1.92 trillion in AUM @ the end of 2013. Typical asset managers receive a 2% management fee & 20% incentive fee. Just taking the 2% management fee would be $38 billion for 2013 so giving $290 million & $230 million in bonus is a pretty small part of the $38 billion management fee. The numbers are just hard to believe because they're so large.
No, dude. You did not understand what I mean haha. It may exist, but it is not real to me haha
Fix up, trade sharp ...
  • #164
  • Nov 30, 2014 6:57am Nov 30, 2014 6:57am
@stewrigh
Quote
But atm its going south and I'm in dd
I know why you're in DD. But do you know why you're in DD?

What made you take a long silver position stew if i may ask? And how exactly are you hedging it?
Just trying to understand your reasoning behind that trade.

Rgds
  • #165
  • Nov 30, 2014 8:54am Nov 30, 2014 8:54am
Quoting skfx
@stewrigh {quote} I know why you're in DD. But do you know why you're in DD? What made you take a long silver position stew if i may ask? And how exactly are you hedging it? Just trying to understand your reasoning behind that trade. Rgds
I'm a long term PM bull - I have been buying physical(stacking) for abt 5 yrs.

Back in May I bought at 19 and took some profit at 21, but when it started to fall - I decided to hedge rather than sell.

I reasoned that there was limited down side but unlimited upside and as they are futures it costs me nothing as long as the margin is covered - which it is.

This way I am taking profit on the way down and I'm already in for the turn when I shall start closing the shorts and adding to the longs.

Have you read any of Graeme or Vexs posts?
  • #166
  • Nov 30, 2014 9:10am Nov 30, 2014 9:10am
Quoting skfx
@stewrigh {quote} I know why you're in DD. But do you know why you're in DD? What made you take a long silver position stew if i may ask? And how exactly are you hedging it? Just trying to understand your reasoning behind that trade. Rgds
S - Can I ask what, if any, is your connection with Norberts insider?
  • #167
  • Nov 30, 2014 9:14am Nov 30, 2014 9:14am
Quoting skfx
@stewrigh {quote} I know why you're in DD. But do you know why you're in DD? What made you take a long silver position stew if i may ask? And how exactly are you hedging it? Just trying to understand your reasoning behind that trade. Rgds
I am in DD bcos I went long and price went south - I also decided to hedge it rather than take the hit and that was always the plan.

Why do you think I'm in DD?
  • #168
  • Nov 30, 2014 9:45am Nov 30, 2014 9:45am
@stewrigh

Buying physical makes sense to me completely. The only way i'd do it.

I wouldn't do it currently while the USD is so bid though.
It has been closing yield spreads lately, cutting into most(if not all) higher yielding counterparts.

But if your afraid to miss out, then that emotion will certainly take over and you'll buy.

Yes, i have read posts by these guys.
They look to position build to capture huge trends.
From memory Graeme calls it a 'millipede' .
It's absolutely a great strategy. What makes it work though, is running with 'price drivers' and not against them.
Young Bender got himself into a pickle because he had an idea(or system or whatever, only God knows), but his positions weren't aligned with reality.
You can millipede all you want, but if you have no idea how the market works then you won't get any of his little legs going lol.
And if you don't know how the market works and you put little legs on and you keep putting them on despite running against huge flows,then you'll end up with a very expensive little millipede.

Why take heat when you don't necessarily need to?
I'm not saying its a bad idea buying silver, but surely you want to make an educated well thought out decision,no?


Quote
And how exactly are you hedging it?
Didn't get your answer on this one Stew.
How are you going about it?

Rgds
  • #169
  • Nov 30, 2014 9:59am Nov 30, 2014 9:59am
Quote
Why do you think I'm in DD?
One-way trade into the U S D, across the board.

Here is a word of advice to anyone reading this post.
Never ever ever look at a chart and make a decision of that alone.
You MUST find out what is driving it(the chart) either upwards/downwards. If you don't know why, then you shouldn't be trading until you do.
Trading solely from a chart is a huge mistake. If someone doesn't understand why, then i'll elaborate.

A chart is a tool for measuring risk and market condition.
rgds
  • #170
  • Nov 30, 2014 10:01am Nov 30, 2014 10:01am
Quote
S - Can I ask what, if any, is your connection with Norberts insider?
Who/What is this Stew?
I have no idea lol

Rgds
  • #171
  • Nov 30, 2014 10:02am Nov 30, 2014 10:02am
Quoting skfx
@stewrigh Buying physical makes sense to me completely. The only way i'd do it. I wouldn't do it currently while the USD is so bid though. It has been closing yield spreads lately, cutting into most(if not all) higher yielding counterparts. But if your afraid to miss out, then that emotion will certainly take over and you'll buy. Yes, i have read posts by these guys. They look to position build to capture huge trends. From memory Graeme calls it a 'millipede' . It's absolutely a great strategy. What makes it work though, is running with 'price drivers'...
I'm not afraid of missing out - I just decided to hang on to my longs rather than close them - and I am position building or dollar cost averaging - whatever you want to describe it as.

IMO I am not going against the price drivers - silver is very near, if not at the bottom and I have been building a long position(millipede) to catch the up trend I believe will materialise

I am also not taking any heat I am builing a position and planned/expected some DD - this was a well thought out plan and decision on my part.
  • #172
  • Nov 30, 2014 10:05am Nov 30, 2014 10:05am
Quoting skfx
{quote} One-way trade into the U S D, across the board. Here is a word of advice to anyone reading this post. Never ever ever look at a chart and make a decision of that alone. You MUST find out what is driving it(the chart) either upwards/downwards. If you don't know why, then you shouldn't be trading until you do. Trading solely from a chart is a huge mistake. If someone doesn't understand why, then i'll elaborate. A chart is a tool for measuring risk and market condition. rgds
Totally agree and that is why I am long silver.
  • #173
  • Nov 30, 2014 10:07am Nov 30, 2014 10:07am
Quoting skfx
{quote} Who/What is this Stew? I have no idea lol Rgds
Just somethin in my mailbox seemed a connection obviously not.
  • #174
  • Nov 30, 2014 10:12am Nov 30, 2014 10:12am
Quote
IMO I am not going against the price drivers
You're hedging.
You most certainly are going against price drivers.

It's not about where we think silver should be. What is important as a trader is aligning ourselves with reality.

Quote
I am also not taking any heat I am builing a position and planned/expected some DD - this was a well thought out plan and decision on my part.
All the best with it Stew anyways.
I just wondered why you were buying it. If you have a plan then that's all that matters.
And if your plan says i'll be taking heat and i know it, then that is great. Not sure why one would do that, but who am i to say.

Rgds
  • #175
  • Nov 30, 2014 10:13am Nov 30, 2014 10:13am
Quote
Just somethin in my mailbox seemed a connection obviously not.
lol
No, not me Stew.
All the best mate.
Rgds
  • #176
  • Nov 30, 2014 10:16am Nov 30, 2014 10:16am
Quoting srt
{quote} He had all positions shown at one time. When I saw it he had approximately 80-100 lots of EU long & all hedged short. He had about 10-12 lots of GJ long & all hedged short. The EU lots were entered in 4 or 5 trades about 18 lots each trade. The GJ lots were entered in 3 trades. With all positions fully hedged (locked), in reality he has no exposure so could just close all trades but it would just cost more in commissions to re-establish new positions so might as well slowly remove positions watching the swings up & down.

I have not idea...
Regardless if it was real or some practice account for testing EA, he will need to publish T Explorer to be able to give him suggestion. Without knowing the account leverage how to suggest which position to close to avoid forced closure. As to GBPJPY, that will need someone who understand what is driving GBP and JPY and when - same to EURUSD. Technical alone is not enough.
  • #177
  • Nov 30, 2014 11:40am Nov 30, 2014 11:40am
Quoting stewrigh
{quote} I'm not afraid of missing out - I just decided to hang on to my longs rather than close them - and I am position building or dollar cost averaging - whatever you want to describe it as. IMO I am not going against the price drivers - silver is very near, if not at the bottom and I have been building a long position(millipede) to catch the up trend I believe will materialise I am also not taking any heat I am builing a position and planned/expected some DD - this was a well thought out plan and decision on my part.
Call me ignorant but this logic doesn't make sense at all. Holding on to losing positions only ever incur increasing opportunity cost. It creates the illusion of a trade recovering from a large negative P/L, when you could have exited early at a minor loss and re-enter at a more profitable position with greatly reduced risk. You are paying extra transaction cost and bearing unnecessary risk to receive a mentally comforting thought that "you were right all along" after the bad trade finally goes positive.

If you are expecting DD, why not wait on the sidelines until price reaches your expectation. To any logical person, it is always less risky to participate on the way back up, not when it first head down, especially if you are expecting draw-down in the first place. You are holding on to the position precisely because you are afraid of 'missing out' on the absolute bottom or first turn of the market and are even willing to bear additional risk for it. Dollar averaging on the way down is hoping that you will catch the very bottom, if you don't it will cost you dearly.

If you are hedging profitably with different instruments such as options you might as well say so, or you will just be misleading others. Because otherwise a flat trade "hedge" equates to not in a position at all AND paying extra transaction cost.
  • #178
  • Dec 2, 2014 4:52am Dec 2, 2014 4:52am
Quoting nobodygsm
{quote} Call me ignorant but this logic doesn't make sense at all. Holding on to losing positions only ever incur increasing opportunity cost. It creates the illusion of a trade recovering from a large negative P/L, when you could have exited early at a minor loss and re-enter at a more profitable position with greatly reduced risk. You are paying extra transaction cost and bearing unnecessary risk to receive a mentally comforting thought that "you were right all along" after the bad trade finally goes positive. If you are expecting DD, why not...
My objective here is to build multiple legs a la millipede method - I started doing this in May when the price was at 19.

I am also hedging or diversifying if you like and I am continually closing both longs and shorts during that process. Sometimes I am fully hedged sometimes not but I always have open positions both long and short.

They are all options so there is no cost involved apart from the rollover. It's not a case of being afraid of missing the bottom - it's more to do with participation and diversifaction

I maybe can't explain it very well but if you read Graeme @ the millipede thread you will maybe understand.
  • #179
  • Dec 2, 2014 6:10am Dec 2, 2014 6:10am
Quoting stewrigh
{quote} it's more to do with participation and diversifaction
Very important both these aspects Stew.
Good USD offer yesterday, short squeeze in both XAU and XAG would have helped you clear longs under/around 16 if you had them.
Volatility on a neutral USD will have you clearing both ways. When market condition is like this, longs and shorts through ranges works.

Obviously just as the dealers do,you want to net out on the side of fundamental/macro.
As an example, a dealer at a bank, would want to be running book with macro flows. Take the EUR or JPY for example, they'll want to always be looking to run net short both these currencies. But making position adjustments as things go along.
If you can do this too, then you'll pick up profits on the side, while at the same time expose yourself to macro flows.

Keep it up and hope silver keeps popping out for you.
Rgds
  • #180
  • Dec 2, 2014 6:52am Dec 2, 2014 6:52am
Quoting nobodygsm
{quote} Call me ignorant but this logic doesn't make sense at all. Holding on to losing positions only ever incur increasing opportunity cost. It creates the illusion of a trade recovering from a large negative P/L, when you could have exited early at a minor loss and re-enter at a more profitable position with greatly reduced risk. You are paying extra transaction cost and bearing unnecessary risk to receive a mentally comforting thought that "you were right all along" after the bad trade finally goes positive. If you are expecting DD, why not...
I've been slowly building a long position in silver too along with Stewrigh. Yesterday's action is precisely the reason I don't want to wait for a bottom to form. Silver can be pretty wild so if I didn't have a long position, would I want to buy after yesterdays big rally? Even if it doesn't hold, I feel that at some point you could see a strong rally that could continue for 20-50% in a short period of time. I'm not good @ chasing a market higher so I'll start slowly building a position. I won't do it in gold as fundamentals are completely different even though they are highly correlated.

With regards to the thread topic, hope he sold some on the rally in EU yesterday. I'd continue to sell on any rallies to reduce longs.
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