I also lost a fair bit on a Dow Short, got stopped out at 10310 and look where it is now!! I think the idea above of a balancing long is not a bad one, thereby your losses are capped for now, but when the retracement comes (and it will) you can close the long out and start making money! If not, then maybe as in reminiscinces of a stock operator you can view it as a tutorage fee (albeit an expensive one) for a lesson learnt...
It's always good to look at things with hindsight.
However, this is not good in reality as you have to deal with the issues in real time as many have found out to their cost.
I have 3 systems that I use - one of them from time to time give me the same scenario where the the index moves against you by so many points.
This type of thing don't just happen accidentally- it is something that happens from time to time and must be built into any system development.
As the markets always retraces you can use this to your advantage by scaling out and scaling in accordingly.
I.e reduce your first trade say by 50p per point and buy another at 50p per point at a better price.
This will stop you from panicking and closing at a large loss as you already know that this situation will happen at some stage.
Of course you need the correct amount of capital for this.
The Dow is due for a big retracement soon but as no one knows when. It is always good to prepare and be in on the action when it happens.
I hope this helps
All the best
However, this is not good in reality as you have to deal with the issues in real time as many have found out to their cost.
I have 3 systems that I use - one of them from time to time give me the same scenario where the the index moves against you by so many points.
This type of thing don't just happen accidentally- it is something that happens from time to time and must be built into any system development.
As the markets always retraces you can use this to your advantage by scaling out and scaling in accordingly.
I.e reduce your first trade say by 50p per point and buy another at 50p per point at a better price.
This will stop you from panicking and closing at a large loss as you already know that this situation will happen at some stage.
Of course you need the correct amount of capital for this.
The Dow is due for a big retracement soon but as no one knows when. It is always good to prepare and be in on the action when it happens.
I hope this helps
All the best
A
aussietrader
For what it is worth. I have a very good technical analyst working within my business and he said to me (when the Dow was around 8000) that this rally had the potential to go to 10,600. Gee he was right and people have made some money following that advice.
Seeing as you are so deep in the hole already, if 10600 is the temporary top you could let it ride for a while and see if your 10700 stop is hit. (If you had the entire position on at 7 quid then rest assurred you would be taken out and the market would then crash - murphy's law.)
What about putting a couple of quid on stop at 10700 and maybe another two qid on 10800 stop, then assess after that.
Whilst the trend is your friend, I wouldn't mind having a quiet short position on about now with a wide stop. Might be able to pick up a few hundred points or more over the next week or so.
Almost talking myself into it.
Whatever you decide - not worth stressing over. Is only money and you can stop the worry anytime you like by closing the position.
AT
Seeing as you are so deep in the hole already, if 10600 is the temporary top you could let it ride for a while and see if your 10700 stop is hit. (If you had the entire position on at 7 quid then rest assurred you would be taken out and the market would then crash - murphy's law.)
What about putting a couple of quid on stop at 10700 and maybe another two qid on 10800 stop, then assess after that.
Whilst the trend is your friend, I wouldn't mind having a quiet short position on about now with a wide stop. Might be able to pick up a few hundred points or more over the next week or so.
Almost talking myself into it.
Whatever you decide - not worth stressing over. Is only money and you can stop the worry anytime you like by closing the position.
AT
Cricket
Donaldduke's
"if you ever find yourself asking other people for advice
about your open position then that is a sure sign that you
should get out (of your position)."
and "when in doubt get the ....."
is so right, you are asking for advice so should get out.
But if you have done your research and your stop is at 10700 for a good reason, then not honouring your stop might get you out only to see it sell off as you originally thought.
When you put the trade on did you think "right, my downside on this could be £3k+ - how would I feel about that " ? if not, you ought to before each trade, otherwise you are a weak hand and are more likely to get shaken out.
Good luck
Donaldduke's
"if you ever find yourself asking other people for advice
about your open position then that is a sure sign that you
should get out (of your position)."
and "when in doubt get the ....."
is so right, you are asking for advice so should get out.
But if you have done your research and your stop is at 10700 for a good reason, then not honouring your stop might get you out only to see it sell off as you originally thought.
When you put the trade on did you think "right, my downside on this could be £3k+ - how would I feel about that " ? if not, you ought to before each trade, otherwise you are a weak hand and are more likely to get shaken out.
Good luck
Dow Dog said:Cricket
Today's US data ( to be released at 13.30 ) is expected to be good according to my chums in the City.
Looks like more up on the Dow today.
SO where do your er? chums actually work in the City Dow Dog
MCDONALD'S !!!!,any chance of some inside Information .
Over the years I have learnt to listen to my pals in the City but I have chosen not to hear.
They have about as much idea of where the market is going as the milkman or my hound.
They work in various esteemed financial institutions, churn out useless market analysis and get paid a fortune for doing it.
B*****ks really but live and let live !!
Lol.
They have about as much idea of where the market is going as the milkman or my hound.
They work in various esteemed financial institutions, churn out useless market analysis and get paid a fortune for doing it.
B*****ks really but live and let live !!
Lol.
IMHO There is no way you will get into the market ahead of the institutions on a news based move. This is mostly due to dirty tricks, dishonesty and corruption that exists in ALL markets.
Your best bet I believe is to wait for the news and trade the price action irrespective of whether you THINK the news is bullish or bearish.
How many times have you seen a stock fall after a positive earnings announcement, and afterwards noticed a slight decline in price before the number? How many times have you seen Bong/Gilt futures take a nudge in the direction of a number before it was released?
You may think the news is good, but if a fund manager doesn't agree with your opinion, you'll be in for a hiding.
Your best bet I believe is to wait for the news and trade the price action irrespective of whether you THINK the news is bullish or bearish.
How many times have you seen a stock fall after a positive earnings announcement, and afterwards noticed a slight decline in price before the number? How many times have you seen Bong/Gilt futures take a nudge in the direction of a number before it was released?
You may think the news is good, but if a fund manager doesn't agree with your opinion, you'll be in for a hiding.
