I hate this situation

F

farmerjohn1324

Apparently I didn't think my strategies through good enough before starting again trading last Thursday. Before yesterday, I had gained $5,000 on initial $40,000 account. I was feeling very confident.

Then things started going wrong. Specifically... Copper future started going down, 30-year Treasury future started going down, EUR/AUD started going up, and EUR/CHF started going up. I'm now down about $25,000.

Due to the high leverage, this happened just in 2 days of bad movement. It could totally turn around in a few days and I honestly think the fundamentals are there to support that happening! But I just hate being in this position. I don't have any margin left to make new trades that I would like, and I'm stuck just waiting and hoping.

All I hope is that it doesn't completely blow my accounts and I lost it all.

I know I need better protection strategies next time. What should they be? How to avoid this in the future?
 
nooby_mcnoob said:
Trade 1 thing on one time frame only. Then trade 2 things on one time frame only. Lose money? Start again at 1.
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1. My account leverage dictates my timeframe unfortunately. I usually have at least a 10% gain/loss on my margin within just a few hours. I don't know how to avoid this. It's forcing my trades to be shorter term than I might want them to be (although I only complain when it's a loss).

2. Trade just one instrument repeatedly? But what about watching the news and having that tell me where to find the bull market? Russia invades Ukraine = go bull on oil, wheat, gold. Go bear on EUR. Doesn't that make sense?
 
newwurldmn said:
Not trade so big that you can lose 60percent of your account in 2 days.

we’ve all made this mistake. Hopefully 25k isn’t everything you have.​
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My problem in trying to do that is...

The leverage is so high on these Forex and Futures... If I were to set a Stop-Loss to exit the trade before it gets too bad, then that would subject me to random market noise as opposed to fundamentals.

I'm not arguing just for the sake of it. I'm just clearly stating my problems and concerns.
 
farmerjohn1324 said:
Apparently I didn't think my strategies through good enough before starting again trading last Thursday. Before yesterday, I had gained $5,000 on initial $40,000 account. I was feeling very confident.

Then things started going wrong. Specifically... Copper future started going down, 30-year Treasury future started going down, EUR/AUD started going up, and EUR/CHF started going up. I'm now down about $25,000.

Due to the high leverage, this happened just in 2 days of bad movement. It could totally turn around in a few days and I honestly think the fundamentals are there to support that happening! But I just hate being in this position. I don't have any margin left to make new trades that I would like, and I'm stuck just waiting and hoping.

All I hope is that it doesn't completely blow my accounts and I lost it all.

I know I need better protection strategies next time. What should they be? How to avoid this in the future?
More...

Risk management is job number 1. Never risk more than 2% on each trade. I added another rule, since, I am 65 years of age and retired. That is, never invest or trade more than 10% at any given time. So, whatever happens, my maximum risk is 10%, on a worst case scenario. This is designed to avoid blowing up your account. Leverage is fine if you know how to use it properly. Always consider the worst case scenario because, it happens a lot more often than you think it can happen. Last thing you want is an unpleasant surprise like you experienced.
 
farmerjohn1324 said:
My problem in trying to do that is...

The leverage is so high on these Forex and Futures... If I were to set a Stop-Loss to exit the trade before it gets too bad, then that would subject me to random market noise as opposed to fundamentals.

I'm not arguing just for the sake of it. I'm just clearly stating my problems and concerns.
More...

I tried Forex and did not like the very high leverage. Way too high risk in my opinion. Stock options is what I buy, calls and puts so that, worst case scenario is I lose 100% of the option premium. That is the most I can ever lose but, my upside is unlimited on calls, limited gains up to zero in the case of puts. With this leverage, earning 100%, 200%, 300% is possible risking only $100-$600 per contract. Other times, you will get 50%, 80% 90% which is fine too.
 
smallfil said:
Risk management is job number 1. Never risk more than 2% on each trade. I added another rule, since, I am 65 years of age and retired. That is, never invest or trade more than 10% at any given time. So, whatever happens, my maximum risk is 10%, on a worst case scenario. This is designed to avoid blowing up your account. Leverage is fine if you know how to use it properly. Always consider the worst case scenario because, it happens a lot more often than you think it can happen. Last thing you want is an unpleasant surprise like you experienced.
More...

Ok. So for example if I had $40,000 in my trading account... 2% of that would be $800. At my leverage on EUR/AUD, that's the equivalent of a 0.00225 price movement.

Are you saying I should set Stop-Loss at that level, even if it subjects me to random market noise? Or are you saying I should have more than $40,000 in an account so that my 2% is higher than $800? Or a little of both?
 
farmerjohn1324 said:
1. My account leverage dictates my timeframe unfortunately. I usually have at least a 10% gain/loss on my margin within just a few hours. I don't know how to avoid this. It's forcing my trades to be shorter term than I might want them to be (although I only complain when it's a loss).

2. Trade just one instrument repeatedly? But what about watching the news and having that tell me where to find the bull market? Russia invades Ukraine = go bull on oil, wheat, gold. Go bear on EUR. Doesn't that make sense?
More...

Until you master 1, how can you master multiple?
 
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