Brewski's Leverage Abuse

[Lee Shepherd]

You were probably asking yourself that very question all the way up? :|

Whatever got you there seems to be working.

On the other hand, when we're this high and in unprecedented waters isn't the risk of a significant gap down looming?

Same thing goes those piphoe, people were saying the same line when the Dax hit 13k very recently. Now look where its at. No doubt a few people made money, but... a lot more would have lost money.

 

[piphoe]

Same thing goes those piphoe, people were saying the same line when the Dax hit 13k very recently. Now look where its at. No doubt a few people made money, but... a lot more would have lost money.

Doesn't it always come down to how much REAL are you willing to give up for POTENTIAL? Isn't this always the equation?

 

[counter_violent]

Your stop is basically where I was thinking of putting mine

My target is still a little way away so I don't want to close it (it's not 30,000 like it says in the screenshots), this is a ridiculous amount of money for me but no guts no glory

Out of interest, would you take the money and run?

Sorry, missed this question.

I play a different game tbh. Sure it's nice to build a position then watch it deliver, but I play both sides, long and short correlated instruments, when required. The idea being that risk of adverse price action can be neutralised, but when I do get biased the right direction, that's the payday.

Probably doesn't answer your question, but maybe something else to think about !

 

[tar]

Lee forgot to add at the end : " That being said , the Dow is dropping pretty hard "


Seriously i agree go with your plans period .

 

[wallstreetwarrior87]

Totally agree with Lee, you MUST make your OWN call. Much respect from my end on how you have played this whatever the outcome.

The only thing the charts are saying is that they are all now in line, they have all made highs together, the NQ caught up and we are back in sync, and this is typical of a turn. Time and price is bang on for Wednesday (without knowing Fed date). So when everything agrees that's a time to worry (failing that be aware and tighten up).

If anything, the outcome is to be used for learning going forward.

But this is a great thread for showing one way to do this. Respect!

 

[piphoe]

nice place to be brew, i'd be a nervous wreck and GLUED to the screen every tich

 

[counter_violent]

Yep, tis a good thread for lots of reasons.
Best one being, how to hit a home run cos they are rare.

It's a bit like gold prospecting. Ya can ponce about panning in the river for the bits that broke off, but that won't help you find the mother lode!

 

[piphoe]

brew, this is your thread and your $, your thoughts here??

 

[brewski1984]

brew, this is your thread and your $, your thoughts here??

I have been out for a couple hours sorry for late replies.

My point of view is the worst case scenario is I’ve pocketed 6 large, the rest is do or die. Dow is currently positive for the day (ok so only by 2 points as I type), it’s made a higher high and currently a higher low so it’s just another day at the office.

 

[counter_violent]

I have been out for a couple hours sorry for late replies.

My point of view is the worst case scenario is I’ve pocketed 6 large, the rest is do or die. Dow is currently positive for the day (ok so only by 2 points as I type), it’s made a higher high and currently a higher low so it’s just another day at the office.

 

[timsk]

. . . Dow is currently positive for the day (ok so only by 2 points as I type), it’s made a higher high and currently a higher low so it’s just another day at the office.

Well done brewski.
If I were in your shoes, I'd struggle not to close out the trade. However, you are clearly made of sterner stuff - bits of you are brass - according to c_v's graphic at least! I don't suppose this will help much but, FWIW, this little exercise might assist psychologically with whatever you decide to do. Old school salesman refer to this as the Abraham Lincoln Close or the Balance Sheet Close. Applied to trading, it works like this: take a sheet of paper and draw a vertical line down the middle making two columns. In the left hand column write 'Close the trade' and in the right hand column write 'Let the trade run'.

Close the trade
In this column, write all the reasons for closing it out now. If you do this, you'll bank around £10k and be delighted. With good reason - great trade. However, the most important point to list is how you will feel if you don't close it now and the market reverses and takes out your stop. Will you be happy, pleased that you stuck to your plan or will you feel gutted that you didn't close it when you had the chance to cash in your £10k profit?

Let the trade run
In this column, write all the reasons for not closing it out now and letting it run. Needless to say, the most important point to list here is how you will feel if you do close it now and then the market takes off for a huge Santa Rally to end the year of fresh highs?

Once you've listed everything you can think of in each column, weigh each of them up to see if you're inclined to go one way or the other. Given that you'll never know when the top comes, it's reasonable to assume that you're going to have to take a draw down hit at some point. In your shoes, I'd be inclined to leave the trade as it is and hope the stop isn't hit before December. If you can last that long then, statistically, a Santa Rally occurs 70% of the time. IMO, the conditions under which one occurs are as favourable this year as they ever have been. Namely, low interest rates, strong borrowing, strong GDP and strong institutional equity investment coupled with a strong TA picture.

Good luck with your decision - I look forward to seeing how you play it!

Tim.

 

[itspossible]

brewski can you close small parts of the trade to lock in a profit and keep the other parts running.
i used to do that when spreadbetting.i usually closed out in a day though-my sphericals are not as big as yours lol.

 

[brewski1984]

Well done brewski.
If I were in your shoes, I'd struggle not to close out the trade. However, you are clearly made of sterner stuff - bits of you are brass - according to c_v's graphic at least! I don't suppose this will help much but, FWIW, this little exercise might assist psychologically with whatever you decide to do. Old school salesman refer to this as the Abraham Lincoln Close or the Balance Sheet Close. Applied to trading, it works like this: take a sheet of paper and draw a vertical line down the middle making two columns. In the left hand column write 'Close the trade' and in the right hand column write 'Let the trade run'.

Close the trade
In this column, write all the reasons for closing it out now. If you do this, you'll bank around £10k and be delighted. With good reason - great trade. However, the most important point to list is how you will feel if you don't close it now and the market reverses and takes out your stop. Will you be happy, pleased that you stuck to your plan or will you feel gutted that you didn't close it when you had the chance to cash in your £10k profit?

Let the trade run
In this column, write all the reasons for not closing it out now and letting it run. Needless to say, the most important point to list here is how you will feel if you do close it now and then the market takes off for a huge Santa Rally to end the year of fresh highs?

Once you've listed everything you can think of in each column, weigh each of them up to see if you're inclined to go one way or the other. Given that you'll never know when the top comes, it's reasonable to assume that you're going to have to take a draw down hit at some point. In your shoes, I'd be inclined to leave the trade as it is and hope the stop isn't hit before December. If you can last that long then, statistically, a Santa Rally occurs 70% of the time. IMO, the conditions under which one occurs are as favourable this year as they ever have been. Namely, low interest rates, strong borrowing, strong GDP and strong institutional equity investment coupled with a strong TA picture.

Good luck with your decision - I look forward to seeing how you play it!

Tim.

I gave this a try and the conclusion was that I would never forgive myself if I closed it now when I could have made thousands more by leaving it, if I do get stopped out then at least I know I stuck to my plan. I hope you're right about the santa rally

 

[brewski1984]

brewski can you close small parts of the trade to lock in a profit and keep the other parts running.
i used to do that when spreadbetting.i usually closed out in a day though-my sphericals are not as big as yours lol.

If I do anything it'll be adding to it again

 

[Signalcalc]

If your plan was to make £10K for bragging rights, then why not stick to the plan?

But then comes your second dilemma - to trade again or not, with the possibility of buying high and selling low, all of a sudden your £10K starts reducing.

 

[brewski1984]

If your plan was to make £10K for bragging rights, then why not stick to the plan?

But then comes your second dilemma - to trade again or not, with the possibility of buying high and selling low, all of a sudden your £10K starts reducing.

My target is not a monetary value of 10k I just keep saying to him I will get a trade go for 10k one day. Lee knows roughly where my target is and there's a little way to go yet

 

[brewski1984]

I am busy the whole afternoon so won't be around to keep an eye on the trade or reply on here as I won't be able to use my phone.

 

[brewski1984]

I am back and watching for a bit, seems I sat through a decent swing this afternoon without knowing it... this trade has finally got to show me 10k profit later on

 

[Lee Shepherd]

If your plan was to make £10K for bragging rights, then why not stick to the plan?

But then comes your second dilemma - to trade again or not, with the possibility of buying high and selling low, all of a sudden your £10K starts reducing.

F**k me, someones a negative Sally and needs to go home and think about their mindset.

 

[itspossible]

F**k me, someones a negative Sally and needs to go home and think about their mindset.

F**k me,SOMEONE IS A REALIST.
ps-bad attitude to fellow traders old chap-his opinion was not aggressive and was just advice.you are trying to hammer home some sort of crazy fantasy here.hes turned 800 into 10k.show is going to be over soon-its a realistic mindset to take profits