Wiped out in a day
- Thread starter schmiedelnyc
- Start date
I would assume that you're playing only paper money for the current position, and you would like to get some comments.
I would also assume that the current position was entered on (or before) Wednesday.
Questions:
Why didn't you take any profits after reaching the 1.0760 level? Probably no target was pre-defined (other than greedy)?
Why didn't you stop losses after (if no before) reaching (say) 1.1010 level? Probably no target was pre-defined, again?
Now what are the pre-defined targets for next decisions, whether exiting or staying? Probably no such targets have been considered yet, AGAIN?
Then what's your game plan?
I've observed in the past (with equity spread trading) that when someone is really hurt and is forced to capitulate (thru margin call or psychologically), it's usually a good sign that the direction is going to reverse soon and the reward *usually* is much higher than the risk involved.
The price is currently very far away from the 20SMA so that also gives me a good technical signal to enter.
My target will be the 20SMA. If the price drops to it, I will take the profit. If the 20ma catches up to the price, I will stop out. I am looking to enter short at around 1.1106.
DNAJ65000
The price is currently very far away from the 20SMA so that also gives me a good technical signal to enter.
My target will be the 20SMA. If the price drops to it, I will take the profit. If the 20ma catches up to the price, I will stop out. I am looking to enter short at around 1.1106.
DNAJ65000
Hi all, decided to contribute my 2c...
As for broker - yes, no one will call you unless you're really big client. You said to be new to FX, so how come you think it will come back? As I saw here some1 posted - thank your broker for closing you b4 you had a chance to add funds (and loose more). You know, even if it returns now and you say - if only I held little more, I would profit - thank your broker, as you learned your lesson. Next time you would bet all your money in the world as you would be confident in yourself and market will never come back to your price. I think you know what your mistakes were, but also, remember for the next time:
- use stops - always
- never risk more than 5% of your funds on single trade
- never add to loosing position (no matter how you call it- averaging, for ex.)
- never target less than your stops (keep profits bigger than losses)
- don't ever be confident about direction market MUST go - it goes wherever it wants, and we should be thankful for having chance to follow it. JpMorgan, UBS, citigroup and other BIGGEST sharks on this market make calls and as far as I follow them - they have 50/50 trades - don't be so sure about the direction.
- dont try to avoid losses, its part of this job and take it that way
- never stop learning and improving
- always try to criticise your trading and find mistakes...(this may be included in previous point)...
- and more...read some books, get some expetience - takes some time...
We have many examples in history when very successful traders lost all their money or/and the institution's money on market - so its never acceptable to relax...costs too much...want to relax - stop trading and have vocation...
I wish you have better aproach for money/risk management and better luck next time. After all, we are all togather in this in some way and know we have to accept losses...but dont forget all of the above...
regards,
Rezo
As for broker - yes, no one will call you unless you're really big client. You said to be new to FX, so how come you think it will come back? As I saw here some1 posted - thank your broker for closing you b4 you had a chance to add funds (and loose more). You know, even if it returns now and you say - if only I held little more, I would profit - thank your broker, as you learned your lesson. Next time you would bet all your money in the world as you would be confident in yourself and market will never come back to your price. I think you know what your mistakes were, but also, remember for the next time:
- use stops - always
- never risk more than 5% of your funds on single trade
- never add to loosing position (no matter how you call it- averaging, for ex.)
- never target less than your stops (keep profits bigger than losses)
- don't ever be confident about direction market MUST go - it goes wherever it wants, and we should be thankful for having chance to follow it. JpMorgan, UBS, citigroup and other BIGGEST sharks on this market make calls and as far as I follow them - they have 50/50 trades - don't be so sure about the direction.
- dont try to avoid losses, its part of this job and take it that way
- never stop learning and improving
- always try to criticise your trading and find mistakes...(this may be included in previous point)...
- and more...read some books, get some expetience - takes some time...
We have many examples in history when very successful traders lost all their money or/and the institution's money on market - so its never acceptable to relax...costs too much...want to relax - stop trading and have vocation...
I wish you have better aproach for money/risk management and better luck next time. After all, we are all togather in this in some way and know we have to accept losses...but dont forget all of the above...
regards,
Rezo
I don't trade FOREX, only equities, and have been only trading for over a year. Contrary to the law of averages, I have turned a profit my 1st year of trading. I attribute this to due diligence, a rock solid game plan, and most importantly, to being able to recognize (and execute) when to get out of LOSING positions. To me, this latter item, is the key to my profitability, and to ensuring you retain the gains that I work so hard for. I learned my lesson well my first month of trading last September (remember when the DOW went down to 7200+.....). I lost almost $ 5K that month, and I was devastated.....however, I learned my valuable lesson that month, which turned out to be great on-the-job training.
I believe this principle can and should be applied to all forms of trading.
I believe this principle can and should be applied to all forms of trading.
Schmiedelnyc : the following is from: http://www.fxcm.com/mini_dealing_details.html
â In the event that an account exceeds its maximum allowable leverage, the dealer has the right and will liquidate all positions in the account. This liquidation of all positions will occur, regardless of the size or the nature of positions held within the account.â
Given that fx currency pairs are âfutures spreadsâ, and that one âtradesâ the online brokerâs order entry software program rather than an open call marketplace, the client, unlike futures trading, is protected against âoverlossâ.
If youâd care to, have a look at my replies re the EUR/USD in the post at:
http://www.moneytec.com/forums/_showthread/_threadid-4228/_s-80bfacf6608300f2daa6a679ad6c9bd3
I recommend âElliott Wave Principle : Key to Market Behaviorâ by Frost and Prechter originally published in the 1970s (the last edition is 1990 I think), as a means of understanding price movement. Wallace.
â In the event that an account exceeds its maximum allowable leverage, the dealer has the right and will liquidate all positions in the account. This liquidation of all positions will occur, regardless of the size or the nature of positions held within the account.â
Given that fx currency pairs are âfutures spreadsâ, and that one âtradesâ the online brokerâs order entry software program rather than an open call marketplace, the client, unlike futures trading, is protected against âoverlossâ.
If youâd care to, have a look at my replies re the EUR/USD in the post at:
http://www.moneytec.com/forums/_showthread/_threadid-4228/_s-80bfacf6608300f2daa6a679ad6c9bd3
I recommend âElliott Wave Principle : Key to Market Behaviorâ by Frost and Prechter originally published in the 1970s (the last edition is 1990 I think), as a means of understanding price movement. Wallace.
Wanted to take the time to send a reply.
I find it strange that there people out there who find my thread of a "so-called new member" + "new to the FX market" strange and read it with raised eyebrows. The only thing that may be odd about my threads is the fact that I am not a native English speaker, so there might be some mistakes in my writing.
First of all, I am definitly new to this forum, I have been trading FX since the beginning of 2003, so I would call myself still new to the FX market. I am not new to the market in general (six years experince in equities trading in NYC). One thing is for sure I definitely overtraded in the way, that with a $10K account you should not go 4 contracts short in one direction. I am still amazed that I did that, but what the heck. Counitng from February on when I statrted to put real money into FX, I am still up by like 15%. The last Thursday and friday it somehow came up that I wanted to double those $10K involved in a week or so. Now in this account there is only $2K left over, so you can't do anything with minimum contract size of 100,000. I would have rather risked the remaining $2K and still with the positions than clsoing out at 1,1100. With another account I actually went long EUR/USD at just above 1.1000.
Sure you should not add to a losing position and should cut losses. But I think FX and little bit different from equties trading. Perhaps you can daytrade equities but this short term horizon approach and taking small profits approach is not recommendable in FX, at least that's my experience. With a true range in EUR/USD of about 115 pips my approach is that you have to see a potential of your position of at least 100 pips but have to be prepared to give that position room (stop loss of at least 100 pips). Fx is a trending market and you have to come up with an opinoion and hold on that opinoion and positions unless some key resistance/support levels are broken. In my case, I saw key resistance at around EUR/USD 1,1150, and after a clear break of that level I would give up my scenario of further Dollarstrength. Some of you are right that in the long run we are still in a EUR/USD uptrend. But from the highs around 1,1920 or so of last June we are in a downtrend. I think we stay in this triangle formation in the short term, and also believe that a retest of 1.0760 is more likey that a retest of levels like 1,1500. Fundamentally, I don't see many reasons for Eurostrength. We see a US recovery well in the beginninge, even if it is a jobless recovery for the time being. Taking into account that the job market is a lagging indicator, the job market numbers last week weren't good but at least the US has a recovery. Go to the 'old Europe' and you will see abso.lutey no recovery plus no jobs being created. It is simply a jobless socialism over here and we haven't even started to realise that Europe is unlike the US not in a business cycle problem. (By the way I live in the middle of it in Vienna, Austria but also had the chance to live in NYC for seix years) Europe still believes that when the only world economy motors starts to work again that Europe will benefit also, because especially Germany is allowed to export again a little bit more tu the US. They also think that a lower EUR/USD will help them in that regard. I believe that we won't see that prolonged recovery in Europe, because if the hope for more exports is your only driving force for a pickup in your eceonomy, then this is simply not enough. So we will see that the US will recover and will create jobs some time soon (perhaps next year) and the good old Europe will stay in recession even when the US recovers. Look at the Unemployment rate in countries like Germany, France, and so on. I also hear the word "structural problems" being used in the US as well as Europe. My take is that in the US there is the structural problem in a way that jobs will perhaps not be created in the short term by big corporations, but more and more by smaller shops and self-employed people. When we talk about structural problem (and that talk started in the 1990's when I by the way left Europe for NYC) then we mean that we do not have any market oriented economy left anymore in Europe, even in Germany (UK is left out). That means that in fact we have more of a socialistic-driven economies and that hasn't worked in the Soviet Union and won't work in the EU.
Ok, that's it for now. By the way, I think if you cut losses when a FX position goes against you by let's say 20 or 30pips then you will wear your account down persistenly. And the one comment that you should read the paperwork more closely would have helped me a lot but I did not do it, so I payed for it for knowing know How Gain handles accounts.
Regards,
Tom
I find it strange that there people out there who find my thread of a "so-called new member" + "new to the FX market" strange and read it with raised eyebrows. The only thing that may be odd about my threads is the fact that I am not a native English speaker, so there might be some mistakes in my writing.
First of all, I am definitly new to this forum, I have been trading FX since the beginning of 2003, so I would call myself still new to the FX market. I am not new to the market in general (six years experince in equities trading in NYC). One thing is for sure I definitely overtraded in the way, that with a $10K account you should not go 4 contracts short in one direction. I am still amazed that I did that, but what the heck. Counitng from February on when I statrted to put real money into FX, I am still up by like 15%. The last Thursday and friday it somehow came up that I wanted to double those $10K involved in a week or so. Now in this account there is only $2K left over, so you can't do anything with minimum contract size of 100,000. I would have rather risked the remaining $2K and still with the positions than clsoing out at 1,1100. With another account I actually went long EUR/USD at just above 1.1000.
Sure you should not add to a losing position and should cut losses. But I think FX and little bit different from equties trading. Perhaps you can daytrade equities but this short term horizon approach and taking small profits approach is not recommendable in FX, at least that's my experience. With a true range in EUR/USD of about 115 pips my approach is that you have to see a potential of your position of at least 100 pips but have to be prepared to give that position room (stop loss of at least 100 pips). Fx is a trending market and you have to come up with an opinoion and hold on that opinoion and positions unless some key resistance/support levels are broken. In my case, I saw key resistance at around EUR/USD 1,1150, and after a clear break of that level I would give up my scenario of further Dollarstrength. Some of you are right that in the long run we are still in a EUR/USD uptrend. But from the highs around 1,1920 or so of last June we are in a downtrend. I think we stay in this triangle formation in the short term, and also believe that a retest of 1.0760 is more likey that a retest of levels like 1,1500. Fundamentally, I don't see many reasons for Eurostrength. We see a US recovery well in the beginninge, even if it is a jobless recovery for the time being. Taking into account that the job market is a lagging indicator, the job market numbers last week weren't good but at least the US has a recovery. Go to the 'old Europe' and you will see abso.lutey no recovery plus no jobs being created. It is simply a jobless socialism over here and we haven't even started to realise that Europe is unlike the US not in a business cycle problem. (By the way I live in the middle of it in Vienna, Austria but also had the chance to live in NYC for seix years) Europe still believes that when the only world economy motors starts to work again that Europe will benefit also, because especially Germany is allowed to export again a little bit more tu the US. They also think that a lower EUR/USD will help them in that regard. I believe that we won't see that prolonged recovery in Europe, because if the hope for more exports is your only driving force for a pickup in your eceonomy, then this is simply not enough. So we will see that the US will recover and will create jobs some time soon (perhaps next year) and the good old Europe will stay in recession even when the US recovers. Look at the Unemployment rate in countries like Germany, France, and so on. I also hear the word "structural problems" being used in the US as well as Europe. My take is that in the US there is the structural problem in a way that jobs will perhaps not be created in the short term by big corporations, but more and more by smaller shops and self-employed people. When we talk about structural problem (and that talk started in the 1990's when I by the way left Europe for NYC) then we mean that we do not have any market oriented economy left anymore in Europe, even in Germany (UK is left out). That means that in fact we have more of a socialistic-driven economies and that hasn't worked in the Soviet Union and won't work in the EU.
Ok, that's it for now. By the way, I think if you cut losses when a FX position goes against you by let's say 20 or 30pips then you will wear your account down persistenly. And the one comment that you should read the paperwork more closely would have helped me a lot but I did not do it, so I payed for it for knowing know How Gain handles accounts.
Regards,
Tom