An amateur starts a thread

BrokenArrows

iainBB wrote: »

Ya expecting gold and miner's to rebound after rate hike

If the price is dropping because of the expected rate hike what makes you think it will rise when the hike actually occurs?

iainBB

BrokenArrows wrote: »

If the price is dropping because of the expected rate hike what makes you think it will rise when the hike actually occurs?

Theory of course

http://seekingalpha.com/article/4052202-gold-miners-buy-next-rate-hike

iainBB

Gold and rate hike graph, rate hike have been few in the last 10 year but here is the overlay with gold price

chompdown

Time for another weekly update, where the theme continued from last week - a falling balance with a bit of a rescue on Friday.

Gold has been very week. It is clearly heading down into one of the longer cycle lows. There was some respite on Friday as the dollar got whacked by the tres secretary's comments. However, I have been expecting a bit of a bounce so I added to my position now that it is deeply oversold. Yesterday we got a bit of a bounce and I am looking for that to continue for a few days so that I can reduce right down to 20€ per point from €40 per point. I may also look to trim my dollar short back to 0.6€ per point next week.

My balance dropped below €3k again, but still plenty in the tank if gold drops lower again.

End of week update:

Current balance: €3728
Total deposits: €4685

Total P/L: €-957 / 20%

Position 1: Long Gold 30€ @ 1227.2
Position 2: Short USD 0.8€ @ 101.725 (now in June contract)

Margin rate: 927%

drunkmonkey

Chomp what company would you set up an account with, wanna short some oil. eToro have increased their fees and don't think I can do it on my degiro account.

chompdown

Hey drunk, I remember you saying a few times on this thread that you need to avoid oil, it was your golden rule to stay away from it etc. so it's best if I don't help you get back involved (in the kindest way possible)

drunkmonkey

I'll tame that mistress yet. I've a feeling it's in for a big slide, i'll put my stop loss at about $60 which I can't see happening this side of the summer.

chompdown

For any fans of sport, my current situation can be summed up with the analogy of me sitting in my seat at the crucible with Ronnie O'Sullivan at the table building a frame winning break.

The reds are in the open and I am just waiting for an unforced error so that the momentum can swing back to me.

Could the FOMC represent a missed black off the spot?

A little bit of banter on this Tuesday evening!

For ever odd

chompdown wrote: »

For any fans of sport, my current situation can be summed up with the analogy of me sitting in my seat at the crucible with Ronnie O'Sullivan at the table building a frame winning break.

The reds are in the open and I am just waiting for an unforced error so that the momentum can swing back to me.

Could the FOMC represent a missed black off the spot?

A little bit of banter on this Tuesday evening!

Is he playing left handed or right handed?

chompdown

I get the sense he is playing right handed, but he will switch over to left handed when I require snookers just to rub it in!

chompdown

Massive moves after the rate hike today as hoped and anticipated for. Momentum definitely seung back in my favour and I have just taken the opportunity to reduce stakes a tad to a more comfortable margin level.

I think I have lost some of the bravado from the start of this thread which is only a positive thing... I now know how quickly things can change so an opportunity to take some profits should always be taken.

BrokenArrows

iainBB wrote: »

Gold and rate hike graph, rate hike have been few in the last 10 year but here is the overlay with gold price

Good call.
Did my research after this and traded on it.

What I don't understand is the market decline.

Market expects rate hike = decline
Actual rate hike = increase

Doesn't make sense.

chompdown

Yes it is mad stuff alright. Day trading must be seriously stressful, especially for those trying to make a living from it.

Markets are forward looking so they must have heard something yesterday they didn't like.

I was working late so didn't see any of Yellen's speech but spotted that she said something along the lines of "we will start to reduce the size of the balance sheet when we are confident in the recovery" which would indicate that they are not confident that this recovery is real.

Gold and the dollar already heading back towards the overbought and oversold levels that I'm watching so I'm happy to reduce down as planned.

If yesterday was the start of a new cycle then gold will stay overbought for a while but if not, it will get there and bounce off. The guru won't even attempt to predict what will happen.

Back down to €0.6 in the dollar and €25 in gold with a balance back above €5k.

ixus

Think of it like this; 0.25% was 100% priced in. That hike had no influence on price after it was announced. The indication for future hikes, dot plot, and Yellens language & tone are what influenced the price action thereafter.

It was clear and dovish in terms of a hike. Price action reacted accordingly. So, in terms of a day trader, or any trader who understands this, trading was relatively straightforward.

Plus dutch election polls.

chompdown

The weeks are flying by! Time for another update...

End of week update:

Current balance: €5412
Total deposits: €4685

Total P/L: €727 / 15%

Position 1: Long Gold 20€ @ 1224.3
Position 2: Short USD 0.6€ @ 101.725

Margin rate: 2214%

A swing from a 20% loss to a 15% gain in the course of a week gives a good idea of highly leveraged I was.

I was quite high in terms of my position limits, but the strong February meant I had plenty in the tank to weather the storm, in anticipation of the rate hike. Yes, it could have gone against me but it went as I had hoped and thought it would. After that I scaled back my positions, to take some profit and to reduce leverage as I go on holidays shortly.

The miners got battered on Friday, which could again indicate a drop in gold is coming. The guru is out as he just does not know which way things will pan out. I'm happy to hold minimum stakes.

With a longer term view for my thread, the guy believes a bubble phase is coming in the stock market but there could be one overdue pull back before it goes higher and higher. I don't feel comfortable getting involved but if there is indeed a big sell off I may just dip my toe.

He is also anticipating a drop in oil, maybe down to the November lows and wants to buy when sentiment is seriously low. Lets see if I can survive that long to see it happen - if I do I may get involved there also, being very careful not to go too leveraged though.

chompdown

A very nice start to the week with the dollar index now oversold and comfortably below the 100.00 mark. I have been reducing my position even further now as the cycle should be ending soon, which will start a little bounce in the dollar.

Gold performed strangely overnight and today. A fairly significant drop overnight led me to reduce my position right down to 11€ per point but a big turnaround today as the dollar continued to weaken means gold is now overbought and I'm reducing even further. Chances are it will just about make a new high around 1260 and then have its long term decline.

It's looking like the big moves down for gold, oil and the S&P should all unuslly come around the same time and I will have plenty in the bank to reopen my positions hopefully at much better prices than available now.

So I've potted all the balls and waiting for the next frame to start 😄

chompdown

chompdown wrote: »

With a longer term view for my thread, the guy believes a bubble phase is coming in the stock market but there could be one overdue pull back before it goes higher and higher. I don't feel comfortable getting involved but if there is indeed a big sell off I may just dip my toe.

He is also anticipating a drop in oil, maybe down to the November lows and wants to buy when sentiment is seriously low. Lets see if I can survive that long to see it happen - if I do I may get involved there also, being very careful not to go too leveraged though.

Not bad that this was posted two days before the first significant drop in the S&P in over 5 months! Hopefully it will continue to move down to a spot where he will be comfortable buying and I will join the party.

Also, the buy price target for oil is around $40-42 area

BrokenArrows

How goes the trading. You have been pretty quiet. Golds been bouncing off the 1260 mark and then dropped back today down to 1245

I managed to get in at 1198 and sold at 1250 a few weeks back. Waiting for another drop back.

chompdown

Hey broken, yeah I was away on holidays and back to work now with a lot to do, hence the lack of updates here. I'm still alive but have tried to time an entry into a long S&P trade and got stopped out a couple of times - would prefer not to use stops but I'm taking advice...

I had a small position short the dollar and got stopped out at 101.2 on Friday. Right at the very high of the move up. Frustrating. Anyway, I expect the dollar to strengthen for a while at least so concentrating only on the S&P for now.

Waiting to re-enter, whcih I expect will be this week.

Balance - €4.2k

chompdown

Just a quick post to say I got some exposure to oil late last week and looking to try find a short term bottom in the S&P this week.

Gold has been performing surprisingly well but no similar moves from the miners which usually spells trouble. I'm expecting gold to drop significantly over the next few weeks. Ideally I will have timed the oil and S&P trades nicely and I will then have a healthy enough balance to move some into Gold at that point too.

Should be an interesting couple of months.

dasdog

chompdown wrote: »

Gold has been performing surprisingly well but no similar moves from the miners which usually spells trouble. I'm expecting gold to drop significantly over the next few weeks.

Is it really suprpising? Reflation trade is dead, US admin is u-turning on every policy and look out of their depth, sabre rattling in Korea, frosting relations with Russia, the dollar is "too strong", yen is floating at the 200 day MA and we're a week away from the French election.

chompdown

Sorry, I meant surprising in terms of it continuing to go up and up without a pull back. I am still very bullish gold.

Two trades currently open:

6.5 per point long oil
35 per point short gold

The "guru" very rarely shorts anything but he says everything is lined up for a pullback in gold. Let's see if it plays out. Everyone is super bullish gold right now.

chompdown

I'm back for more punishment

My account went to zero shortly after the post above. Can't remember what happened exactly but probably because of a lack of discipline and being over leveraged.

I have just opened two positions with an account balance of 850€ - this is not a lot of money and it's for entertainment purposes.

Current positions:
10 points short the S&P500 @ @2817.82
1.0 points short the US Dollar index @94.487

I may slightly increase the S&P short after the FOMC meeting.

chompdown

The purpose of my posts are to keep a public diary of thoughts / plans for this experiment.

Note for this week...
S&P -> 15-25 trading days from today until first drop.

Drop won't start until after the FOMC. 8-10 days after that should be the time for the first target which is down around 2720, followed by a bounce and further sell off, ending around last week of August / first week of Sept.

Plan. Move into 30 points short the S&P by the time the FOMC is done.

chompdown

Well this isn't going to be a very interesting resurrection of the thread. The ESMA enforced new margin rates came into effect over the weekend. I only have the 1.0 short USDY open and unless that can get to a profit of about €3,000 I won't be making any more significant trades.

Mach 3

[

chompdown wrote: »

I'm back for more punishment

My account went to zero shortly after the post above. ]Can't remember what happened exactly[ but probably because of a lack of discipline and being over leveraged.

I have just opened two positions with an account balance of 850€ - this is not a lot of money and it's for entertainment purposes.[

Current positions:
10 points short the S&P500 @ @2817.82
1.0 points short the US Dollar index @94.487

I may slightly increase the S&P short after the FOMC meeting.

Ah well, if you keep throwing money at the market - the market will keep taking it.
As before re-read the thread. if you can't see it, ask a friend.
It's beyond funny at this stage.

drunkmonkey

He's already bust if he shorted the dollar, should have sunk it into Ryanair dip at least you'd have something tangible.

Mach 3

drunkmonkey wrote: »

He's already bust if he shorted the dollar, should have sunk it into Ryanair dip at least you'd have something tangible.

In all fairness, one trade is the least concern.

Glad to see you found yourself after all your hard work. Fair dues!

ballyharpat

chompdown wrote: »

Not bad that this was posted two days before the first significant drop in the S&P in over 5 months! Hopefully it will continue to move down to a spot where he will be comfortable buying and I will join the party.

Also, the buy price target for oil is around $40-42 area

Just saw this thread, a bit curious, would you have been happy if you bought and held oil at this price? (40-42)

I started buying at 65, continued buying all the way down to 28 where I ran out of leverage and was very close to having to sell at that and realise losses, fortunately it pulled back in time and I've held on for the upswing-I think there's another 20% in it....

I know our priorities are different, I am looking to hold and make money over a longer period, then sell and wait for a drop on something else before I reinvest

positivecarry

In my opinion as a full time trader you should look at it from the basis that we are all in the market to make money full stop. Taking things on a trade by trade basis risking 2-3% per go, unless you have a lot of account balance, or a lot of patience, typically in the beginning of your trading journey you won't be able to stick to that if you are working step by step. So taking a step back and understanding the game from a broader view, once you have a win rate that is reasonably good, 60-70%. This should come handy when you have developed your strategy enough to point where you have understanding and consistency of course. At this point there is a lot of ways to maximise your wins and minimise your losses. In the middle of course there is the point of psychology and will be the downfall for majority of mistakes and the reason why is always money, so to reduce that, bring your risk way down. 1-2% is fine. If I read correctly, there was a 4000 account balance at one point, your risk should be 50-100.

Using a compound strategy where you take that risk and work on a step up and step down basis you have a creative way now to boost your gains while keeping risk low. The compounding percentage is your risk/reward ratio, let's say 1:2. The amount of steps you gain on the ladder is the amount of aggregate wins, i.e. 20 trades, 15 wins - 5 losses = 10 aggregate wins. The ladder looks like this on those 10 aggregate wins

50 risk x 1:2 = 100 win
100 risk x 1:2 = 200 win
200 risk x 1:2 = 400 win
400 risk x 1:2 = 800 win, now let's say at this point balance is 4000 + 1500 = 5500 and now you lose a step
800 risk x 1:2 = 800 loss, now you are back a step and balance is 4700

You aren't compounding using all your profits, the higher the steps go, the more money you make, once again 15 wins and 5 losses over 20 trades is a 75% win rate, which is a decent ask, so expect 12-13 wins and 7-8 losses so around 4-5 aggregate wins, take this over a year and make 20 aggregate steps on a small balance and you have a decent gain

Just putting some attention on making your winners win and minimising losses, the most important thing in trading is preserving capital. Just an alternative view instead of a trade by trade basis