Super-sensible. Your risk could not be more clearly defined. Bravo.
In one sense, you already are by having your account set up like that. How I deal with it is by limiting my position size and leverage so that any disaster scenario can only eat a finite amount of my trading capital - an amount I know I could survive if necessary.
I don't trade news. Partly for this reason, and partly because it's factored in too quickly to be of use in my methodology.
I'm not sure this is a good strategy, particularly if you intend to upscale your trading. I think you'll find that when you get to meaningful amounts of cash, you'll be bouncing off the walls with all the stress!
I'd suggest you plan the trade first, and then trade the plan...
Why are you entering (presumably because you expect an action)?
At what point (time & price) are you prepared to accept you are wrong?
At what point are you looking to exit the trade if you are right?
Under what circumstances are any of the above allowed to change?
Work it all out in advance and then you'll know what to do at any given point and won't find yourself having to second guess.
jotekfinance
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Lots of good info in this thread. Thanks for sharing.
Hi guys
Just popping in for the weekly update
I'd like first to chat about those short Nat Gas positions that I had open which I mentioned last week that were causing me a big problem
If you look at the attached chart the problem occurred at point A when the weekly Nat Gas report came out on Thursday.
Now here is something I can tell you all beginners.
Don't have multiple positions open just because you decided to average down a bad position when you know full well there is a report coming out that could cause a sudden change in price!!!!! And if you didn't know a weekly report was coming out? Well you damn well should know if you are gonna trade a share or commodity so do some homework first!
Yep I knew it was coming, yep I told myself I would close at least one position at a loss if needs be before 3.30pm to make sure my exposure was not too great, yep i understood the very good reasons why this would be a prudent and sensible thing to do, and did I listen to my own concience and what it was telling me? Nope!
So lo and behold - multiple bad short positions suddenly become multiple very bad short positions!
My saver here - at least the positions were for small contract sizes (each one was the mininimum size I could trade on my platform) so I was not in danger of actually blowing the account
So this is where I left off last time.
As I mentioned... and you also point out Toknees this is not necessarily a good strategy.... but anyway rather than panic I instead had a look at the news reports which I linked in my previous post here and decided the underlying 'vibe' was that Nag Gas prices were more likely to fall. As you can see they actually went up further for a while then did indeed come down - but by the end of the week things had really turned around
For some days I just left well alone then as things came into my favour and I had gained some confidence back because of further news reports I placed a few more intraday trades (some were long so I was hedging my short positions rather than taking on more risk) and I got a few good results out of some of the humps bumps and bounces you can see on the chart.
The eventual result of taking my time with this is that I turned around what could have been a £120+ loss on Nat Gas into £3.68 profit. In doing so I accepted some losses but made them back (hedged) from some fairly decent gains and some much reduced losses.
My biggest loss of the week came this Thursday, just before 3.30pm when I took a £32 loss on one position Nat Gas to lessen the impact of me playing russian roulette with the weekly report again.
In this instance it seemed the most sensible thing to do and I actually hit the button this time and I stand by that, despite the fact that prices fell this week on the report and later that eveneing I would have been out at a profit on that one.
But if I had not closed that one down then could I have said I learned my lesson from last week? No!!
Also I had to bear in mind that the Nat Gas futures expire on Tuesday 24th at 6pm so I need to get out of all positions before then
So I take on your advice toknees, and I am not sure how it would pan out on a larger account but in this instance at least things did pan out as I hoped, and the news reports during the week suggested they would.
I do have a tendancy to think of the numbers more as percentages of my account rather than amounts of cash so if I was dealing with ten times the account size and ten times the position size/amounts would I be stressing out more?
I don't know (I dont' feel that I would) but that is something hopefully I will get to find out at some point - in fact I actually find live trading quite realaxing and have a rather pragmatic approach to it which may sound odd but it is honestly the way feel.
OK so here is how the week went. Given the fact I had to take some losses over the Nat Gas positions I ended up with a lower success rate than previously
But things worked out OK overall
Total trade 34 (28 good, 6 bad)
Success rate 82.5%
Total Profits £88.13 (average profit £3.15)
Total losses £62.62 (average loss £10.44)
Net weekly profit £26.11
So even though i had some high losses the profit for the week was a bit over double my projected £12
Running total profit for the three weeks on my live account = £88.29 which is a lot more than my projected £36 for three weeks
OK so not quite such a good profit this week, but not bad either. This was the most challenging week I have traded on my live acccount by far.
Yes it's only a small account and the amounts I am making seem rather insignificant, but hopefully the experience itself will be a good one for the future
Right now I am off to spain for the best part of 4 weeks (cos the north west english climate is rubbish) so I won't be reporting in... but it doesn't mean i have dissappeared. I do hope to get a few trades in while i am on holiday as I can trade from my mobile if I get wireless internet access
I'm gonna have to trade a different way though - with orders and profit calls - as I probably won't be spending too much of my time looking at a screen
So that's it for now - back in a few weeks
Rich
Just popping in for the weekly update
I'd like first to chat about those short Nat Gas positions that I had open which I mentioned last week that were causing me a big problem
If you look at the attached chart the problem occurred at point A when the weekly Nat Gas report came out on Thursday.
Now here is something I can tell you all beginners.
Don't have multiple positions open just because you decided to average down a bad position when you know full well there is a report coming out that could cause a sudden change in price!!!!! And if you didn't know a weekly report was coming out? Well you damn well should know if you are gonna trade a share or commodity so do some homework first!
Yep I knew it was coming, yep I told myself I would close at least one position at a loss if needs be before 3.30pm to make sure my exposure was not too great, yep i understood the very good reasons why this would be a prudent and sensible thing to do, and did I listen to my own concience and what it was telling me? Nope!
So lo and behold - multiple bad short positions suddenly become multiple very bad short positions!
My saver here - at least the positions were for small contract sizes (each one was the mininimum size I could trade on my platform) so I was not in danger of actually blowing the account
So this is where I left off last time.
As I mentioned... and you also point out Toknees this is not necessarily a good strategy.... but anyway rather than panic I instead had a look at the news reports which I linked in my previous post here and decided the underlying 'vibe' was that Nag Gas prices were more likely to fall. As you can see they actually went up further for a while then did indeed come down - but by the end of the week things had really turned around
For some days I just left well alone then as things came into my favour and I had gained some confidence back because of further news reports I placed a few more intraday trades (some were long so I was hedging my short positions rather than taking on more risk) and I got a few good results out of some of the humps bumps and bounces you can see on the chart.
The eventual result of taking my time with this is that I turned around what could have been a £120+ loss on Nat Gas into £3.68 profit. In doing so I accepted some losses but made them back (hedged) from some fairly decent gains and some much reduced losses.
My biggest loss of the week came this Thursday, just before 3.30pm when I took a £32 loss on one position Nat Gas to lessen the impact of me playing russian roulette with the weekly report again.
In this instance it seemed the most sensible thing to do and I actually hit the button this time and I stand by that, despite the fact that prices fell this week on the report and later that eveneing I would have been out at a profit on that one.
But if I had not closed that one down then could I have said I learned my lesson from last week? No!!
Also I had to bear in mind that the Nat Gas futures expire on Tuesday 24th at 6pm so I need to get out of all positions before then
So I take on your advice toknees, and I am not sure how it would pan out on a larger account but in this instance at least things did pan out as I hoped, and the news reports during the week suggested they would.
I do have a tendancy to think of the numbers more as percentages of my account rather than amounts of cash so if I was dealing with ten times the account size and ten times the position size/amounts would I be stressing out more?
I don't know (I dont' feel that I would) but that is something hopefully I will get to find out at some point - in fact I actually find live trading quite realaxing and have a rather pragmatic approach to it which may sound odd but it is honestly the way feel.
OK so here is how the week went. Given the fact I had to take some losses over the Nat Gas positions I ended up with a lower success rate than previously
But things worked out OK overall
Total trade 34 (28 good, 6 bad)
Success rate 82.5%
Total Profits £88.13 (average profit £3.15)
Total losses £62.62 (average loss £10.44)
Net weekly profit £26.11
So even though i had some high losses the profit for the week was a bit over double my projected £12
Running total profit for the three weeks on my live account = £88.29 which is a lot more than my projected £36 for three weeks
OK so not quite such a good profit this week, but not bad either. This was the most challenging week I have traded on my live acccount by far.
Yes it's only a small account and the amounts I am making seem rather insignificant, but hopefully the experience itself will be a good one for the future
Right now I am off to spain for the best part of 4 weeks (cos the north west english climate is rubbish) so I won't be reporting in... but it doesn't mean i have dissappeared. I do hope to get a few trades in while i am on holiday as I can trade from my mobile if I get wireless internet access
I'm gonna have to trade a different way though - with orders and profit calls - as I probably won't be spending too much of my time looking at a screen
So that's it for now - back in a few weeks
Rich
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