An amateur starts a thread

chompdown · 26-07-2016 6:26am

A celebratory moment this morning when I wake up to see all three positions are green

That calls for the first screenshot!

Pablo Escobar · 26-07-2016 7:03am

chompdown wrote: »

A celebratory moment this morning when I wake up to see all three positions are green

That calls for the first screenshot!

It's not the most diversified portfolio, is it!?

iainBB · 26-07-2016 11:48am

Pablo Escobar wrote: »

It's not the most diversified portfolio, is it!?

In fairness It is hard to get diversified portfolio with 1000 euro unless you use ETF.

chompdown · 26-07-2016 2:46pm

Trade 4 just executed.

Short USDX 0.2€ @ 97.047

"The dollar has formed a swing high".

Looking good!

chompdown · 27-07-2016 8:52am

Time for a quite update before the big FOMC announcement later today.

My current aggregated position is 0.7 EUR @ 97.152

The deathzone when I start getting margin calls is around 98.290

Current price 97.265

For ever odd · 27-07-2016 4:28pm

I don't think you will listen, but I have to say it anyhow.... Close or hedge your position.

Way too much firepower out there, this evening and early tomorrow morning, especially in USD/JPY.

If you are gonna make a go of this, one trade is not the be all and end all of the game. Best watch and start over again. Two things you need to get your head around...

1)It doesn't matter if your right or wrong.
2) it's all about not losing money.

Pablo Escobar · 27-07-2016 8:42pm

iainBB wrote: »

In fairness It is hard to get diversified portfolio with 1000 euro unless you use ETF.

True, but if you're making 3 trades.......

chompdown · 27-07-2016 8:58pm

Thanks for the comments lads. I had to be out and away from a computer this evening, but I was happy to see no surprises from the Fed. I have a lot of reading to do now to catch up on the day's events.

I'll then post replies to the comments above.

I was able to add Trade 5 during the sell off after the initial spike in the dollar, just 0.1 @ 97.395

chompdown · 27-07-2016 10:27pm

Pablo Escobar wrote: »

True, but if you're making 3 trades.......

It's one trade; short the dollar at its cycle high. The fact I bought into it with partial stakes every day doesn't really make a difference. I take your point though, and I would class this as a bet rather than an investment.

Also, the dollar index is a basket of currencies against the dollar so it's *slightly* diversified in that respect.

chompdown · 27-07-2016 10:36pm

For ever odd wrote: »

I don't think you will listen, but I have to say it anyhow.... Close or hedge your position.

Way too much firepower out there, this evening and early tomorrow morning, especially in USD/JPY.

If you are gonna make a go of this, one trade is not the be all and end all of the game. Best watch and start over again. Two things you need to get your head around...

1)It doesn't matter if your right or wrong.
2) it's all about not losing money.

I completely agree that I am dangerously overleveraged. I also agree with your other points!

I have written off the money already, but I still harbour some hopes that I have timed an intermediate cycle high in the dollar almost perfectly. My current position is 0.8 per point out of a max of 1.0 per point. As it stands now I will be wiped out at around 98.985. The dollar double topped at 100 imo and it's not going back there for a long time.

chompdown · 27-07-2016 10:49pm

Would anyone else be interested in starting a thread and playing with a bank (demo or real) of 1,000? Seems to be a good group here who know what they are doing and we could see how different strategies work for different people.

chompdown · 28-07-2016 12:34pm

The Dollar index has again dropped below the 200 day moving average, and I believe this is the beginning of a bear market in the dollar. Despite this, I will keep my stake at 0.8 for now. I have taken on board the comments on this thread and starting to realise how it is very important to stay alive, and not go balls deep, especially with such a small starting bank.

One thing that came up on this thread already is the use of stops. Did anyone see the knee jerk reaction to the FOMC announcement yesterday? Quite a nice little jump in the Dollar, and those with short positions and tight stops probably got stopped and missed on the subsequent large sell off.

More volatility expected tomorrow with the results from the European banking stress tests, and an announcement about easing from the Bank of Japan, so another reason not to go all in.

chompdown · 29-07-2016 8:31am

ixus wrote: »

Your short $ trade is betting the FED are dovish and/or that Bank of Japan don't launch a massive easing program on Thurs. Basically, the opposite of what's expected.

chompdown wrote: »

I agree that a rate increase is unlikely. The Fed Funds Futures have a 96% of no rate hike. What is most likely imo is a hawkish version of no rate rise, a slight rise in the dollar leading to a high on Wed / Thurs and then that's it, the intermediate cycle top.

So it looks like the amateur was spot on and the market was wrong, at least in round 1! Looking forward to my end of week screenshot... just need the Euro Stress tests to be nice and stress free

For ever odd · 29-07-2016 9:26am

July 22, 2016 at 3:00 AM
Copper at neckline/resistance on weekly chart.

Any retracement in dollar, and I will look to buy around the 96.3/5 area for third and final entry to dollar long.

Took short Yen at 106.5 a weekly close below this level...

Still long US - Short Europe equities, but getting itchy fingers, will give it another week or two to evaluate.

Edit

July 22, 2016 at 4:39 AM
Yen: Short USD/JPY @ 106.5

Posted the above last week on another site. We are on different sides of the trade, but I don't swim naked.

chompdown · 29-07-2016 4:11pm

Good to hear! Could be an interesting couple of months ahead if you stay on the other side of the trade. You may have been stopped out already today though.

I'll offer some advice now - the yen and the euro have bottomed against the dollar this week. Do not go long the dollar. It will gradually make its way lower over the next weeks and months.

I may be a total novice, especially when it comes to trade sizes, discipline etc, but with the guidance I have, I am confident my directional calls will be more often right than wrong.

dasdog · 29-07-2016 4:18pm

chompdown wrote: »

So it looks like the amateur was spot on and the market was wrong, at least in round 1! Looking forward to my end of week screenshot... just need the Euro Stress tests to be nice and stress free

Well done, I say you enjoyed today's GDP also.

For ever odd wrote: »

July 22, 2016 at 4:39 AM
Yen: Short USD/JPY @ 106.5

Hi FAO,

With 102.5/6 support now broken it will hopefully clear the way down to 100.48 (2 week low) where I have my TP.

chompdown · 29-07-2016 4:25pm

dasdog wrote: »

Well done, I say you enjoyed today's GDP also.

I really did, yes

3/3 so far. The stress tests are the only slight worry now.

ixus · 29-07-2016 7:30pm

Strong EU bank stress test should result in stronger euro. Euro looks like retracing brexit, similar to equities at this stage.

chompdown · 30-07-2016 7:30am

chompdown wrote: »

Bold prediction: By Friday I will be 1 per point short and in profit

Let's see what actually plays out!

Well the weekly results were way beyond my expectations, with a lower than expected stake too. I was also able to increase my aggregated price. Here's the update.

Week 2 update
Starting balance: €973
Position: Short USDX (Sept) 0.8€ @ 97.182
Current price: 95.540
Current balance: €2287
Weekly change: €1431
Total P/L: €1313 / 135%

For ever odd · 30-07-2016 8:44am

Nice one! Enjoy.

For ever odd · 30-07-2016 11:59am

ixus wrote: »

Strong EU bank stress test should result in stronger euro. Euro looks like retracing brexit, similar to equities at this stage.

A bit of a goldilocks, hard to tell how the markets will react, maybe just a shrug of the shoulders and ignore till one of the banks fails.

What's your take on it?

poeticjustice · 31-07-2016 1:13am

chompdown wrote: »

Well the weekly results were way beyond my expectations, with a lower than expected stake too. I was also able to increase my aggregated price. Here's the update.

Week 2 update
Starting balance: €973
Position: Short USDX (Sept) 0.8€ @ 97.182
Current price: 95.540
Current balance: €2287
Weekly change: €1431
Total P/L: €1313 / 135%

Fair play man. great result so far

Francie Barrett · 01-08-2016 8:32am

Going up 135% in a week is about the worst thing that could have happened to you. You now have a positive confirmation bias of a strategy that is flawed and I think there's a very good chance that you could end up losing your entire bank here. There's even a possibility that you could end up adding new money into the account to meet a margin call. Slippery, slippery slope.

Most traders would only be working with position sizes of 1-2% of their portfolio for any given trade. I understand you want to play it a bit more aggressively than that, which is fine. But you do need some sort of positioning strategy with hard stop loss limits!

There are literally hundreds of examples of people who have an all-in or open-ended strategy like yours who end up going bust. The latest one I remember reading was some poor sap who shorted a biotech company and not only lost his $37k bank, but also racked up over $100k debt due to a margin call. He ended up liquidating his pension to meet the margin call and set up a gofundme page, begging for money.

http://uk.businessinsider.com/joe-campbell-gofundme-page-for-e-trade-2015-11

BrokenArrows · 01-08-2016 9:12am

Francie Barrett wrote: »

Going up 135% in a week is about the worst thing that could have happened to you. You now have a positive confirmation bias of a strategy that is flawed and I think there's a very good chance that you could end up losing your entire bank here. There's even a possibility that you could end up adding new money into the account to meet a margin call. Slippery, slippery slope.

Most traders would only be working with position sizes of 1-2% of their portfolio for any given trade. I understand you want to play it a bit more aggressively than that, which is fine. But you do need some sort of positioning strategy with hard stop loss limits!

There are literally hundreds of examples of people who have an all-in or open-ended strategy like yours who end up going bust. The latest one I remember reading was some poor sap who shorted a biotech company and not only lost his $37k bank, but also racked up over $100k debt due to a margin call. He ended up liquidating his pension to meet the margin call and set up a gofundme page, begging for money.

http://uk.businessinsider.com/joe-campbell-gofundme-page-for-e-trade-2015-11

Thats one unlucky guy.

drunkmonkey · 01-08-2016 9:38am

chompdown wrote: »

Would anyone else be interested in starting a thread and playing with a bank (demo or real) of 1,000? Seems to be a good group here who know what they are doing and we could see how different strategies work for different people.

I think there should be a spread betting thread, mainly for chatting about current markets, predictions, tp and st etc. I use etoro a bit but the chat system/updates is a bit crap and full of amateurs, think boardies knowledge would be a bit better.
I started with €100 in July. Well started way before that but always lost, taking this €100 very seriously now.

Like today for example, Oil? USD/JPY? God only knows where those 2 are going. Oil I should be no where near and will keep away from it once I close out my current trade, Oil's a sure fire way to loose all your money quickly.

dasdog · 01-08-2016 1:27pm

BrokenArrows wrote: »

Thats one unlucky guy.

No stop in place. I was on the flip side of that situation when the SNB depegged from the Euro. Pure luck. They might be painful at times but stops are necessary.

OP that margin level will have you wiped out in weeks even if your overall strategy is correct.

ixus · 01-08-2016 1:55pm

dasdog wrote: »

No stop in place. I was on the flip side of that situation when the SNB depegged from the Euro. Pure luck. They might be painful at times but stops are necessary.

OP that margin level will have you wiped out in weeks even if your overall strategy is correct.

Stops weren't supported on that depeg. Spread betting firms and FCM's did not honour stops at levels people had input. They were given brutal, wipe out, prices.

dasdog · 01-08-2016 2:11pm

I saw the lawsuit rants but I was on the other side and stunned after they replayed transactions due to extreme volatility and what I had actually doubled that evening. A frightening move, lesson stands even if it wasn't honoured on that occasion.

chompdown · 01-08-2016 4:58pm

Francie Barrett wrote: »

Going up 135% in a week is about the worst thing that could have happened to you. You now have a positive confirmation bias of a strategy that is flawed and I think there's a very good chance that you could end up losing your entire bank here. There's even a possibility that you could end up adding new money into the account to meet a margin call. Slippery, slippery slope.

Most traders would only be working with position sizes of 1-2% of their portfolio for any given trade. I understand you want to play it a bit more aggressively than that, which is fine. But you do need some sort of positioning strategy with hard stop loss limits!

You are absolutely right Francie. There absolutely still is a very good chance I will lose my entire bank here and more. I have set out the rules in the first post which will hopefully stop at least me lashing more in beyond what I could afford. Taking a look at the rules with hindsight of the increased bank in mind, these are important ones:

1. Additional deposits: Max 500 per month thereafter.
So if it was to all go tits up next week I can only put €500 in. I have also taken steps to make it also technically not possible to add more.

2. Positions: Strictly limited to one at a time.
This particular 'tranche' of €1,000 (and the profit it has generated) is only for this position number 1. I'm not going to go beyond the max 1.0 stake, and I cannot open any new positions in anything else unless it comes from a new 'tranche' (i.e. €500 per month). The absolute worst thing to do is to add more positions thinking that this unrealised profit is banked and good to be used. The death zone for this first position is 98.98 and I definitely do not want that going lower. I would like to get it above 100.0

While I know and fully realise that this whole strategy is highly likely to lead to wipeout, I think these two particular rules will help, albeit only slightly.

If my bank gets to €5,000 I will take a look at these rules again.

I plan to add the August deposit this week.

Edit to correct: The death zone (when I get margin calls) for this first position is actually 98.15 not 98.98 as stated above.

chompdown · 02-08-2016 5:02pm

A wonderfully ugly hourly chart for the Dollar today as it moved down to 95.00

The next trade will be long oil. I will start to scale in when I get the nod. I will be using the €500 August bank for this, with a stop at a loss of €500. Expected to be later this week / early next.

Max position will be €2.5 per point (WTI futures are per cent rather than per tenth of a cent)

An amateur starts a thread

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