Baruch's Forex System Journal

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Hello again

Scientist, Jayford and others...

I am always very wary of the risk associated with trading futures. By "risk" I am now referring to a event when the market will move so quickly that you can not get out even if you have proper tight stops in place. In index futures it is simple to calculate how much of the underlying you are controlling per contract and estimate what is the worst case scenario. But how about currency futures (6e, 6b etc)? What is the worst that one can reasonably expect? What is a reasonable amount per contract that one should have in the account?

In index products some kind of minimums I would consider (I am talking intraday here) would be:

ES $10.000 per contract
Dax EUR20.000 per contract

What would be similar "reasonable minimums" for 6e, 6j etc? (On side note, what do you think about these minimums for ES and DAX?)

The margin for these is actually LOWER than for ES for example, but I would be very scared to trade one 6E contract per $10.000, because of the volatility.

Again I am referring to a "catastrophe event" where stops do not matter not to normal taking of losses.

Any comments very much appreciated.

Bungle
 
Quote from DrBungle:

Hello again

Scientist, Jayford and others...

I am always very wary of the risk associated with trading futures. By "risk" I am now referring to a event when the market will move so quickly that you can not get out even if you have proper tight stops in place. In index futures it is simple to calculate how much of the underlying you are controlling per contract and estimate what is the worst case scenario. But how about currency futures (6e, 6b etc)? What is the worst that one can reasonably expect? What is a reasonable amount per contract that one should have in the account?

In index products some kind of minimums I would consider (I am talking intraday here) would be:

ES $10.000 per contract
Dax EUR20.000 per contract

What would be similar "reasonable minimums" for 6e, 6j etc? (On side note, what do you think about these minimums for ES and DAX?)

The margin for these is actually LOWER than for ES for example, but I would be very scared to trade one 6E contract per $10.000, because of the volatility.

Again I am referring to a "catastrophe event" where stops do not matter not to normal taking of losses.

Any comments very much appreciated.

Bungle
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So you want a lot of cash, to just just sit in your account in case of a catastrophe. What kind of logic is behind that?:confused:
 
Quote from Ditch:

So you want a lot of cash, to just just sit in your account in case of a catastrophe. What kind of logic is behind that?:confused:
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First, I did not necessarely mean that the sums I mentioned has to sit in the brokers account but more of money that I can risk and that I have "allocated" to be risked in the markets. For example if I had $100.000 trading account I might have $35.000 at one brokers account, another $35.000 at another brokers account (good to have two brokers) and $30.000 for example at a normal bank account.

Secondly, if your margin is used in such a event your broker will liquidate your positions, and the changes are that they will be liquidated at about the worst possible price. Its better to be able to decide where to liquidate. This is a reason to have sufficient amount at the broker account.

The logic in being carefull is simple, its nasty to loose your trading account but its even nastier to end up owning your broker a ton on top of that!

Bungle
 
Scientist

Just wondering. I havent seen you mention the dax lately. Are you still trading it? Is it similiar to the EUR as far as liquidity and volatility?
 
Quote from Baruch:

Had some nice days in Rome.
Did get back today to catch the sell signal. So far I am ahead with 210 pips.
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I am flat now - because it's soon weekend.

Did some thinking in Rome about my strategy. I will now try to let the profit get a free ride - like today. I don't care about my wins ratio - only the pips counts now.
 
Quote from Baruch:

I am flat now - because it's soon weekend.

Did some thinking in Rome about my strategy. I will now try to let the profit get a free ride - like today. I don't care about my wins ratio - only the pips counts now.
More...


Just curious as to how much size u trade per a position? Are u trading more than 1 lot?
 
Quote from Trend Fader:

Just curious as to how much size u trade per a position? Are u trading more than 1 lot?
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Hi Trend Fader,

I (and my broker) don't trade in lots.
 
Quote from Scientist:

I exited rest here at 108, +50

I've had enough for today folks. I'm up over +250 per contract (you can count), and it's starting to bore me, no real trend or anything today. I would have loved to have been riding a 300+ trend on top of this, but here we go. It's one of those choppy no-direction days. I did countless trades on other things, too, such as ER2, ES, and another currency, but I decided to keep it to EUR, to keep it short & simple.

Now, I wanted to post a string of my trades for just one day (rather than just sporadically, like before), so you and everybody else get an idea what I do, and that it works, and how to do it.

Another reason of course was a little voice in my ear to give Trend Fader a good one on his eye! So, you should all be grateful towards brother Trend Fader, because without his comments, perhaps I would have never bothered! Long live Trend Fader! :D

Seriously though. I hope you had fun and picked up something. It's really rather simple stuff. Most entries were fine-tuned with tape-reading, but this can be done via experience only. Keep watching tapes, and you'll get there. Apart from that, just channels and fibs, the simplest things work best, because they work out of self-fulfilling prophecy.

I will try to answer any questions that arose as to my methods / trades, as soon and as best as I can. I have nothing to hide.

A great thanks also to the host, Baruch, for having me here. Baruch own3z! :cool:

Best Regards,
Scientist
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