Yamato
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Good timing to buy QG, the small NG contract, worth one fourth.
It's lower than 2.500 now. Think about it: for every tick you can lose 2.5 dollars (for the big contract it's 10). Now, there's only 2500 ticks, which for the big one are worth 25,000 dollars, but for the small one are worth one fourth, which is... 6,250 dollars. So, if worse comes to worse, and NG goes to zero, you lose 6,250. But this is practically impossible, right? So let's even assume it could go to 1,5, which is much more realistic an assumption. In that case you'd lose 2500 dollars. I'd say it's pretty good, especially if you consider that it's more likely to go up, to a value 3.5, in which case you'd make 2500. This is much better than going to the casino, for sure. I'd say this is even better than buying government bonds.
And for me it is optimal, because it represents a future that literally cannot go any lower than x, because zero is the bottom. Given that i am someone who cannot exit a trade at a loss, this is really the perfect trade for me. I ought to look for more such trades. I would imagine there's lots of such opportunities in the forex markets, especially with the mini-futures... I don't mean the e-mini, but e-micro futures actually. Here's one example:
E-micro EUR/USD
You know, "buy and hold" type of thing. These e-micro futures have one tenth the leverage of the regular future. So if it goes from 1.31 to 1.30, instead of losing 1250 dollars, you lose 125 dollars. So IF the euro went all the way down from 1.31 to 1.0, you'd lose 3875. I might actually buy one of them, and make a few hundreds on it. The margin required is only a few hundred dollars. I am going to do a lot of such (discretionary) investing when I'll have unneeded capital, just sitting there.
[...]
Actually I have to correct myself: this strategy is only good for going LONG, because if you go SHORT and you're wrong, there's an unlimited loss, with the method of not closing your positions. Instead, in the other direction, if prices are really low, you can only lose so much after it gets to zero. So, believe it or not, this seems like a very good strategy for using capital that is not needed at the moment. For example the NG is a perfect trade:
Commodity:Natural Gas/WikiChart
This is the chart of the NG. If you fall as much as zero (impossible), you lose 6,250. If you rise to the highest values where the NG was a few years ago, you make 25,000. Is this clear enough? This investment is better than buying government bonds.
I mean: it's bound to rise, and if it doesn't and natural gas fell to zero, you don't blow out the account but only lose 6,250. You can't lose. Provided you're buying the QG.
With the others, it's different, because you might not have enough capital to withstand the potential drawdown.
I am sure there's many other such LONG-only trades on other futures.
And besides, here I am saying "if it falls to zero", but that's impossible. The worst that could happen is that it fell from 2.5 to 1.0. In that case you'd lose 3,750. So, to the downside you have -3500, and to the upside you have a potential profit of 25 thousand dollars. This is much better than any lottery, government bond, or any other long term investment.
But the way I'd play (will play it) is not waiting until 25,000 of profit, because it could always turn around. I'd wait from 2.5 to 3.5, and make a profit of 2500 dollars from it. This could happen in just a month. If it doesn't happen, I'll wait and hold it. It would probably fall to just 1.5 and make me go down 2,500 dollars, temporarily.
Perfect trade for people who, like me, just cannot make themselves close their losing trades (it feels like a burning defeat). But i mean: it's only good with this future (QG) and this timing. It could not be started any higher than this, or with more leverage (as far as my capital is concerned).
Oh, and it can only be done with the way this chart is looking right now (about to bounce back up):
Basically this trade (and similar trades) just cannot go wrong.
The E-micro EUR was a similar trade (LONG-only as i said), but if that one fell to zero, you'd stand to lose 15,000 dollars. And to the upside, you can gain much less than with this because it' won't likely exceed 1.6. So, you can make 4k, or lose, in theory, 15k. But with this guy, you can make 25k, and lose, in theory, a max of less than 4k. So it's almost the opposite. So i really do not have any doubts that it's an awesome infallible trade. And what if it doesn't go anywhere for 3 months? So what? You sell it, without having lost anything. And the margin required is less than 1000.
A similar awesome trade would have been a few years ago, when oil was at 30sh. You could have simply gone long on the QM. In that case it's worth half the CL, so you would have lost, by going to zero... 15k. But going to zero is impossible, so you were standing to lose 7k at worst, and to make (by getting back to 100, as it did, and as could be expected) 35k. Not bad, huh? But these trades only come along once every 3 years. Or, if you really monitor everything, they come maybe once a year at the most. I would call them "the trades for travis and those who cannot conceive using the stoploss".
It's lower than 2.500 now. Think about it: for every tick you can lose 2.5 dollars (for the big contract it's 10). Now, there's only 2500 ticks, which for the big one are worth 25,000 dollars, but for the small one are worth one fourth, which is... 6,250 dollars. So, if worse comes to worse, and NG goes to zero, you lose 6,250. But this is practically impossible, right? So let's even assume it could go to 1,5, which is much more realistic an assumption. In that case you'd lose 2500 dollars. I'd say it's pretty good, especially if you consider that it's more likely to go up, to a value 3.5, in which case you'd make 2500. This is much better than going to the casino, for sure. I'd say this is even better than buying government bonds.
And for me it is optimal, because it represents a future that literally cannot go any lower than x, because zero is the bottom. Given that i am someone who cannot exit a trade at a loss, this is really the perfect trade for me. I ought to look for more such trades. I would imagine there's lots of such opportunities in the forex markets, especially with the mini-futures... I don't mean the e-mini, but e-micro futures actually. Here's one example:
E-micro EUR/USD
You know, "buy and hold" type of thing. These e-micro futures have one tenth the leverage of the regular future. So if it goes from 1.31 to 1.30, instead of losing 1250 dollars, you lose 125 dollars. So IF the euro went all the way down from 1.31 to 1.0, you'd lose 3875. I might actually buy one of them, and make a few hundreds on it. The margin required is only a few hundred dollars. I am going to do a lot of such (discretionary) investing when I'll have unneeded capital, just sitting there.
[...]
Actually I have to correct myself: this strategy is only good for going LONG, because if you go SHORT and you're wrong, there's an unlimited loss, with the method of not closing your positions. Instead, in the other direction, if prices are really low, you can only lose so much after it gets to zero. So, believe it or not, this seems like a very good strategy for using capital that is not needed at the moment. For example the NG is a perfect trade:
Commodity:Natural Gas/WikiChart
This is the chart of the NG. If you fall as much as zero (impossible), you lose 6,250. If you rise to the highest values where the NG was a few years ago, you make 25,000. Is this clear enough? This investment is better than buying government bonds.
I mean: it's bound to rise, and if it doesn't and natural gas fell to zero, you don't blow out the account but only lose 6,250. You can't lose. Provided you're buying the QG.
With the others, it's different, because you might not have enough capital to withstand the potential drawdown.
I am sure there's many other such LONG-only trades on other futures.
And besides, here I am saying "if it falls to zero", but that's impossible. The worst that could happen is that it fell from 2.5 to 1.0. In that case you'd lose 3,750. So, to the downside you have -3500, and to the upside you have a potential profit of 25 thousand dollars. This is much better than any lottery, government bond, or any other long term investment.
But the way I'd play (will play it) is not waiting until 25,000 of profit, because it could always turn around. I'd wait from 2.5 to 3.5, and make a profit of 2500 dollars from it. This could happen in just a month. If it doesn't happen, I'll wait and hold it. It would probably fall to just 1.5 and make me go down 2,500 dollars, temporarily.
Perfect trade for people who, like me, just cannot make themselves close their losing trades (it feels like a burning defeat). But i mean: it's only good with this future (QG) and this timing. It could not be started any higher than this, or with more leverage (as far as my capital is concerned).
Oh, and it can only be done with the way this chart is looking right now (about to bounce back up):
Basically this trade (and similar trades) just cannot go wrong.
The E-micro EUR was a similar trade (LONG-only as i said), but if that one fell to zero, you'd stand to lose 15,000 dollars. And to the upside, you can gain much less than with this because it' won't likely exceed 1.6. So, you can make 4k, or lose, in theory, 15k. But with this guy, you can make 25k, and lose, in theory, a max of less than 4k. So it's almost the opposite. So i really do not have any doubts that it's an awesome infallible trade. And what if it doesn't go anywhere for 3 months? So what? You sell it, without having lost anything. And the margin required is less than 1000.
A similar awesome trade would have been a few years ago, when oil was at 30sh. You could have simply gone long on the QM. In that case it's worth half the CL, so you would have lost, by going to zero... 15k. But going to zero is impossible, so you were standing to lose 7k at worst, and to make (by getting back to 100, as it did, and as could be expected) 35k. Not bad, huh? But these trades only come along once every 3 years. Or, if you really monitor everything, they come maybe once a year at the most. I would call them "the trades for travis and those who cannot conceive using the stoploss".
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, for all values of X and Y.
