Help - how do you get out of this!

Beginner Questions
21

Thank you for that - much appreciated.

Believe it or not I only started live about two or maximum three weeks ago - lot of $$$ to lose in a week or two - but - like you said - I have learned (crammed) big time and I now know I can do this.

Like I said in my previous post - if I had actually made money in that first week or so and not lost I really would have thought I had hit the big time and would never have bothered with graphs, indicators, etc. etc.

Once again - in my defence - before I opened a live account I tried various different demos and ALWAYS made a killing. In four hours, split over two days, I made just over $3 000 trading the USD/ZAR pair so I thought - hey - this is easy - and the job for me. Opened a live account and all of a sudden things started happening a hell of a lot faster and my account balance rolled down before my eyes. That’s why I am not a believer in demo trading at all. I agree that you must do it to familiarise yourself with the platform etc. etc. and no, most people are maybe not as fortuanate as me in that they could risk $4 000 (although if the truth be told at this stage I actually could not afford to risk it - that’s why I’m trading forex for crying out loud), but I would strongly advise anyone trying to get into this to open the smallest account possible at first (I know I’m going to get shouted down for this) with money that you can say ‘it’s gone already’ and then use that account with very small lots to learn.

Anyway - I’m now going ‘square eyed’ from sitting in front of my trading platform so I need to get some rest.

Just for the record - I’m now on $701.18 - going up (slow but sure)!!!

Regards,

Dale.

Actually - I just tried to attach a graph - hope it works (just want to show off MY graphs too).

USDJPY.JPG793×497 68.6 KB

22

Hi Dale,

First, you don’t have to say you sold usd and bought jpy. Just say you sold usd/jpy. Everyone knows that you expect the dollar togo down against the yen.

And B, I ahve a few questions for you.

1 Who is your dealer?
From what I have heard from you I don’t like them. You cannot do you cannot do trailing stops, and they charge you a dollar a day for carry over? Or is that what you are loosing on intrest? $1 a day doesn’t sound like much, but I like to put it in a different light. You can get 2, 40 ounce bottles of beer for $5.00. So every week look how much beer you loose!

2 I know you don’t like the demo account because it didn’t feel real. Is that because you didn’t act like it was a real account? Did you take a $50,000 demo and turn it into $1,000,000 in 2 months? If you did then you were not honest to your self. I say go back to demoing with an amount that you will be starting out with. Stay with it until you have made a profit for at least 3 months. And trade with the same rules that you will be using on you live account.

3 How long have you been doing the Hedge play? It is my understanding that you hedge in a sidways market, not to protect you from getting a margin call. Eventually you have to make a move in one direction or the other and you can get a margin call at that point. Just sitting on the fence and waiting is just a slow death, but you will eventually get a margin call that way and everyday you loose valuable capital.

4 When you start to trade a new pair you should always trade on a demo first. Each pair has it’s own personallity. Learn how it moves first.

5 Most important, Don’t worry about missing that big move that only comes around once every 10 years. Look back on your charts as far as you can and you will see that every day offers a profit.

To sum it up, get out, find a new broker ( I mean platform, all a broker does is make you broker), make a set of rules and stick to them.

Hope this helps and remember she got it all in the divorce, so you can’t sue me or I might have to move in with you.

Good Luck, Bazooko

23

Gee - nice reply (see - I should be sleeping now but I can’t walk away from this thing).

Answers:

1 - GCI Trading

At first I thought that everything that I had read about them on the Internet (AFTER I had already jumped in with money of course) was true BUT the main problem I had with them was that I was always being requoted and it took forever and forever to execute orders BUT this appears to only have been because of my USD/ZAR fetish. Since I changed to the USD/JPY pair I do not get any requotes and my Market Orders and Limit Orders are executed immediately - they don’t even sit in a queue - they just appear - executed. Also when I decided to close my account because I got scared of the money that I was losing they transferred my balance to me within an hour - you canot get better than that. So in all fairness to them I don’t think that any of the problems that I was having was their fault (and I have gone to great lengths under the ‘Rate your broker’ section to clarify what happened so as not to be unfair to them. What’s more their trading platform is superb - not cluttered up with uncessary ‘bells and whistles’ and I always know to the cent where I am without having to refresh the screen or nonsense like that. I don’t use Stops any more anyway - I just sit and watch this damn thing 25 hours a day (24 plus my lunch hour). The interest if $0.25 per day per lot - I can handle that. I am now a happy camper with GCI.

2 - Demo Account

The main reason was, again, because of my USD/ZAR fetish. In GCI’s demo the Market Orders and Limit Orders were ALWAYS executed at the displayed price but in the live system this NEVER happened - again - as explained above - it would appear that it was because of the pair. It was very easy to make money on the demo trading the USD/ZAR for the simple reason that a slight movement would net a huge profit so that is why I thought I’d get rich quick. Be that as it may - demo trading - never again for this person.

3 - Hedges

Only started hedging when the positions in question starting eating up my useable margin and do not intend doing it again once I get out. Having said that though I don’t see any reason why you cannot take a ‘stable’ pair, work out the average price between the hight and the low of the previous day, and then buy or sell and hedge the position immediately. From what I can see that way you would catch the market both ways without using up additional margin.

4 - Trading a new pair

Study them using the live data before opening a position. NO DEMOS!!!

5 - Big move

Cannot argue with you there!

And thanks for the constructive input. It is very much appreciated.

I WILL get out of these positions at very least breaking even. Watch this space!!!

Thanks again.

Dale.

24

Dale,
If you’re still up, just wondering which direction you’d wish USD/JPY to go in? I get the impression that you wanna see it drop, so do you have a larger short position?

I’m interested in your situation here. I decided to work with USD/JPY too, but don’t have an opinion on its direction either. My system stays quiet in this ranging market, but I do see the ascending triangle you are talking about. Hard to say which way, but a breakout does seem likely doesn’t it? At least on the 2hr or 4hr charts…MACD is flat as a pancake! :slight_smile:

25

Funny you should ask - yes - I’m still up!!!

You know - somebody actually needs to tell me what ‘Short’ and ‘Long’ mean so that I can answer with a little more finesse.

In my language:

I have five ‘Buy’ positions open ranging from 118.34 to 118.42 and five ‘Sell’ positions that range from 118.03 to 117.40 so basically at this point it does not matter which way it moves as the one is offsetting the other to maintain my margin.

I am showing a bigger loss right now on the ‘Sell’ positions so ideally I would like the JPY to strengthen against the USD until the Net P/L on the ‘Sell’ positions is 0 or a small profit.

Just by looking at past data I think that the JPY is going to weaken against the USD in the short term though - I just need the JPY to momentarily strengthen to 117.40 or better and I’m home free!!! After that it is just a simple matter of sitting back and watching it go to around 122.00!!!

To be honest I think what I am probably going to do is top up my account with another $500 so that I have got leeway either side when I have to close the hedges otherwise I’ll be back to square one. I simply refuse to close a position at a loss and I don’t think that I will have to as I feel that if you have a good look at the range that this pair has traded at over the last couple of weeks my required highs and lows are not out of bounds.

Balance now (for those of you that may be wondering) - $729.36.

Regards,

Dale.

26

Okay Dale, I’m excited because I think I finally understand where you’re coming from!

First off, let’s talk in terms of USD/JPY. A Long position= Buying USD, and Short position= Selling USD.

Now I think what you are trying to do is have the pair drop far enough that you can get out of your hedged situation, followed by the pair rising, so that you can profit on your Long positions, correct?

Technically, this could work, but realistically, you are cutting out quite the task for yourself! Most FX traders are struggling to predict a SINGLE price move, however you are attempting to predict TWO price moves, in a certain order. Judging by recent volatility, I see the intent of your plan, but what if USD/JPY drops to the point where you would close your Short position (at say 117.00) and keeps falling! Now you would be down over 100 pips on your long position and if it starts to trend down my friend, you are in a very bad position!

I hope this helps clarify why I’m worried about your decision, and best of luck to you, please get some sleep!

27

Good morning everyone!

Thank you akeakamai for your interest. It’s almost like having a ‘trading buddy’ which is great. Never actually thought about it until now but trading forex can be quite a lonely business actually.

Anyway - the latest update:

I have cheated a bit - and just before I passed out last night I added another $500 to my account for three reasons:

1 - To give me a bit of headroom when I start closing hedged positions

2 - To let me underpin some of those positions so that I may not have to wait for all of the losing positions to actually break even or show a profit i.e. by buying one or two lots when high or low then these lots offset the loss either way until the Net P/L is 0 and then I can get rid of the losing positions without affecting my total

3 - I could not help myself

Difficult task - not impossible (I don’t think).

Basically now with a bit of extra margin this is how I would nurse it along:

For example - while I’m updating you - USD/JPY is sitting at Sell = 118.07 and Buy = 118.10 which is very nicely pretty much in my own comfortable range.

What I’ll do now is take a short position (I hope I’m getting this right) as all of my graphs and indicators are telling me that the JPY at the moment will get stronger. What this means is that this new position will be in a profit situation much earlier than the original losing positions. I’ll repeat this process until the Net P/L is either zero or showing a small profit and then close them. In other words although some of those positions may very well end up being closed at a loss the net result is no loss in profits if that makes sense. If I see that these new positions start going against me then I’ll hedge them as well.

Also remember that in the interim I am still trading very nicely using my MACD/OsMA and Parabolic SAR - never lets me down.

My other exit strategy might be to say to myself that once I have effectively doubled my initial $500 i.e. built the balance up to the point where I can write off the losing positions and still come out with $1000 (well it will now be $1500 because of the extra I put in) then that is another option.

I mean at the end of the day the idea is to come out with as much money as is humanly possible in the shortest possible time. Let’s just take my statement above. If I build my account up to the point where I can write off the losses and still have effectively doubled my initial investment by let’s say Friday this week then that is still good is it not i.e. it does not matter how much I have to write off in the interim - 100% return on investment over a period of seven or so days is not too bad I don’t think.

Now - if you multiply that by 10 - were talking serious dough here ($500 account converted to $5000 account).

Anyway - lets make money!!!

Stay in touch everyone (this is a little like Big Brother)!!!

Regards,

Dale.

28

OK - well - while nothing is happening (I hate it when there is no movement - it drives me crazy) I thought I would just post details of my current positions for the sake of clarity.

I have worked out that the reason that I have got into this situation is purely because of the fact that both the long and short positions that are making huge losses were opened at the upper and lower limits of the pair on the respective days. This is something that I have to take into account in future.

That’s why right now the sweet spot for me today is around the 118.10 - 118.20 mark - it can go either way today I think.

Regards,

Dale.

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29

Good morning there! Mind telling me what time frames you look at, and what indicators you use? I’d like to see what you’re looking at, and maybe get a better understanding of what you’re talking about when its happening.

And keep us updated on any positions you open or close. And hey, I thought you were done with the hedging! I think it could help simplify your trading strategy if you left the hedging out for now!

And don’t worry, the Euro session is about to open, might get some action there

30

Hello,

I have graphs of all the time frames open from 1 minute to right through to 1 hour and on each of them I have MACD/OsMA, Parabolic SAR, and Stochastic (Slow) displayed.

From all of that I can pretty well see where I think the price is going in the short, medium, and long term (long term being and hour for me).

I also have a tick graph i.e. gets updated every time there is a trade (I still have not seen this on any other platfrom). Basically I make sure that MACD/OsMA on the 1 minute and 5 minute graphs have crossed in the same direction and then wait for it to cross in the same direction on my tick graph which inevitably leads to a slight loss in the beginning (normally because of the spread and maybe a pip or two in the wrong direction) but then (so far) always ends up in a profit no matter how small.

As far as hedging goes I don’t see the problem doing it where the rate is now as I feel it is right in the middle so I’m making little by little on the ups and downs.

Like I said - it would be very short sighted of me to expect to clear both the long and short losses one for one but by just making sure that at the end of the day my Net P/L in both directions is either break even or a slight profit and I have effectively doubled my initial investment then I’m good right?

As we speak I see the JPY weakening and because I now have more positions open in the middle at least three of them are showing a nice little profit at the moment i.e. > 10% of the cost of the lot itself.

Regards,

Dale.

31

Actually - I was not sure if I was going to post this but it’s good for a laugh I suppose.

You won’t believe me if I tell you that sometime between 03:00am and 07:00am this morning I actually dreamed that I was watching this pair on a piece of continuous computer stationery and it was moving just slightly up and down and then all of a sudden it just shot up in one direction like somebody would take a pen and draw a consistent line up, way up, hold there for a while, and then go right down in the opposite direction, and I could not buy or sell anything at either of these extremes because I did not have enough available margin and GCI had not yet credited the additional amount that I had just transferred.

How’s that!!!

Regards,

Dale.

32

What the **** is going on here - this pair needs a kick start or something this morning!!!

Dale.

PS New balance - $1 304.62 less last nights transfer of $533.75 = $770.87 less startup of $533.75 = $237.12 since last Friday = 44.43% (and don’t mention the losses - they’ll be gone soon).

PPS Just thought I’d add to this message. I have been sitting here for at least five minutes and not a single movement. Is today a holiday that I don’t know about or what? Has everyone gone home? Actually - does this mean that there is some important news coming out right now or what?

33

Bummer you’re down.

Hedging will not make any sense once the hedge position is active. The way I understand it is, you take position 1 but just in case it goes tits up you take an oposite position to “hedge your bet.” I think they would normally be placed at the same time, the idea being simply to minimise your losses in the event your “real” trade reverses on you.

I think you said that you managed to get in after your original trade went awry? From what I have understood, strictly speaking that’s not a hedged trade… you know the deal :slight_smile:

Stops: Every piece of learning I have read - even the stuff that others purpot as scam material says never trade WITHOUT stops (stop losses).

Anyway, I think you already know all of this really.

I don’t think you can ever bring this back to profit now because of your opposite position. If you’ve minimised your losses as best you can, I think the best thing is get out.

But that’s just me, I’m trading demo and will be for some time :slight_smile:

Stewart

34

Thanks for the reply.

Why is everyone so negative about this?

Surely I cannot be the only person that trades like this?

Right now I’m almost out at the top end i.e. closing with no loss.

OK - I know it’s the bottom I need to worry about but remember every time the JPY weakens I’m taking profit and then immediately going short so that when the reversal happens I don’t need to get right down to the 117.40 or something ridiculous like that to close with no loss.

Regards,

Dale.

PS - You know there is an old saying - ‘What goes up must (eventually) come down’ - and from what I see this applies to this game as well.

And there is another one (taken from one of the Mercedes Benz Forums although I can’t take credit for it). It goes like this: ‘Speed is just a question of money. How fast to you want to go?’

35

My list of open positions would give you a bit of a laugh at the moment BUT watch what happens in the short term.

According the Stochastics on every single chart from 1 minute to 1 Day the USD is going down man!

Then - in the medium term the whole thing is going to break out of that ascending triangle and the JPY is going to get the **** kicked out of it!

How’s that for a market analysis!!!

Only joking.

I can’t watch this anymore so I’m going to take a break.

Regards,

Dale.

36

hey dpastero

i have been following your story. I saw it’s been fooling around at the resistance line 118.35 and it came back down a bit (yeah! for u, right?) : ) I am not too sure or maybe i lost track but what your TP (profit price) is…??
I guess I am just wondering if you’re still in the trade (so maybe u can sleep peacefully tonight :slight_smile:

p.s. i feel like i learned a lot about the USDJPY just from following/reading your’s and everyone else’s posts. I almost feel like i took this trade personally (when i woke up this morning i instantly checked the pair)

p.p.s. curious - are you trading other pairs or just this 1?

37

Yup - I’m still here - and still sitting with all my positions (although they are, at least, new positions).

Actually - I was 100% right - believe it or not. We went from 118 whatever right down to the point where I was starting to close the losing open positions one by one at a small profit each time. Of course as luck would have it I was flying a bit too close to the wind so I was margin called and lost one lot that cost me $57.75. I nearly lost it (my mind that is) (although in the bigger picture of things it was nothing). The funny thing is that had that margin call not have happened I would have been out of every single losing position that was open - which was my idea from the start. I nearly drove me insane as that is the first loss I have taken since last Friday. Put it this way - I went from nearly a $700 loss to a $57.75 in a matter of hours.

Anyway - I have now ‘rehedged’ the whole lot again - later or tomorrow is another day. Needless to say that aside from the little bits that I am managing to ‘scalp’ I’ll be in the same position by tomorrow morning.

Although on second thoughts I am not in nearly as bad a position as I was this morning as the opening prices of my hedged positions are nowhere near the limits of the pair in either direction so this should be a lot easier to get out of.

I would at least like to think that my efforts are not in vain i.e. I’m pretty sure that this is the pure ‘textbook’ approach of how NOT to trade.

Having said that:

I WILL GET OUT OF THIS WITH DOUBLE MY INITIAL INVESTMENT BY THE CLOSE OF BUSINESS ON FRIDAY!!!

Dale.

38

Not sure what you mean. You asked people what they would do in your situation, and several of us attempted to answer that. If we all seem negative, I can think of a few reasons why that might be.

You were a bit negative in your original post. You admitted that you made an ‘idiotic’ mistake, and that you had ignored all the advice on babypips.com. You stated ambiguously that you lost a lot of money, but were refusing to write off the little bit of ‘gain’ you’d managed to make.

It seems to me you made it sound like you were betting the farm on this thing and were sitting in front of the computer watching yourself bleed pips. You’re talking like you NEED this outcome to go your way, but you’ve already blown $4,000 on it. You were talking like a gambler at the craps table chasing money he’s already lost with money he still has but is about to lose because he refuses to walk away, take the loss, and maybe try again some other night.

What’s so negative about advising you to exit a position that’s costing you your next rent payment (yes, you sounded that desperate) while you’ve (hopefully) still got some money to try again later with?

You seem confused. And I am also a bit confused on exactly what you wanted out of this thread in the first place. If your FOREX trades have improved somewhat, that is good news, but I imagine now you can see why some folks (like pipgod) are hesitant to give advice on such matters.

39

Well - good morning to you to.

Sorry - I did not mean to offend you - it was actually meant to be a sort of ‘tongue in cheek’ joke - the joke being on me - you know the proverbial ‘egg on my face’ thing?

On the other hand - yes - I do believe I can get out this no matter how far I have to ‘prop it up’ to achieve this goal - and you know what that goal is.

Yes - I do NEED this to work in the long term but I can promise you that it is not to be able to pay the rent at the end of the month!

And of course - I do NEED the outcome to go my way - because if it doesn’t - then I’ve lost money - and that I’m sure is not the object of the excercise.

I’m sorry if I created the impression that I’m desperate.

I have another business that I have had for nearly sixteen years now and I just can’t take it any more - my heart is no longer in it (apparantely it’s called ‘burnout’ although I think it’s called ‘boredom’). I need a change of direction - so that’s why I NEED to make this work and it has been something that I have always said that I would like to do for a living but up until a while ago was scared to throw money at something that I knew nothing about.

For now - it suits me better to do this. It’s exciting and it’s new and hopefully it will be something I can add to my list of accomplishments.

And yes - I am learning - I’m just fortuanate to be in a position where I can write off the cost of my mistakes and then try and correct them.

Am I wrong in the way that I am approaching this? I’m not sure - maybe I’m just not quite as cautious as the next person.

Am I learning from the current situation I’m in with my trades? Of course I am - and when I’m out of this current position I will list what I think I have learned (if anyone is interested that is).

For one thing - I can tell you - that somebody else on this forum said not to waste your time with ‘mini accounts’ and $50 lots. He was right - see - I have learned something. I have now proved that point to myself. A big enough margin can ride out any storm.

And while you have got me revved up - I don’t see the point of making $100 dollars a week and being happy with it. This is not a hobby. Hell - I make half of that in an hour in my other business. I just don’t believe that one can serve two masters. I’ve decided that this is now what I want to do and while I have the opportunity (financially) to put my all into it - why not.

Anyway - enough with the advice thing - it seems to be an issue - although I’m not sure why. I not a kid who is going to slate other people for giving me advice. If I’m stupid enough to act with my money on the advice of people who I have never met in my life before and who certainly don’t have a vested interest in my well being - and that advice just happens to be wrong - then I deserve to lose every cent of it. I just like hearing other peoples opinions - that’s all.

Anyway - for anybody else that is interest in how things are going - I just woke up now to check on my positions - and - guess what - we are at 117.42 and going down. At the moment every single loss position that initiated the start of this thread is sitting at a profit. I’m afraid I have to cheat again though - before closing any of these positions - I’m going to prop up my margin substantially - just to make sure that even if this thing goes to 115.00 there is a lot of headroom to ride it out and then catch the up swing and do the same thing when we are back at around 118.40 or higher.

The way I see it - everything is in my favour right now. The lowest this pair traded at was around 108.00 and that was in May last year. In July last year it was around 114.00. In November last year it was around 114.50 and then at the beginning of this month it was somewhere around 115.00. If you have a nice look at the daily chart our Ascending Triangle is still there so as long as I can ride out a low of 115.00 and then catch it on the upswing I’ll be good. Now this is based on charts and signals and from what I’ve read - that’s what were supposed to be looking at. That’s the way to trade forex. So - if I’m wrong - then we’re all wasting our time looking at charts and indicators and might as well go back to gambling (although strangely enough that is something that has never interested me. I think I played roulette once or twice, lost about $100, and could not see why people would sit and do this all day).

I’ll keep updating this post if anyone is interested. If not - then please let me know and I’ll shut the **** up.

Regards,

Dale.

40

Hi Dale,

I respect your honesty in your posts, based on your personality and life experience I’m assuming you’ll respect mine and take this post constructively, rather than personally.

I think at this point you are gambling and not managing your risk at all. You need to have a plan and an exit strategy before placing a trade. You’re trading too much on hope and what you want to happen or think will happen vs what is actually happening. If I were you, I would close my positions at breakeven or a small profit, consider myself lucky, and then re-evaluate the way I’m trading. If you were managing your risk properly and trading with a plan, you shouldn’t have lost 4k so quickly and then continued to trade making seemingly the same mistakes again. You need to trade with a plan and stick to it if you want to make it as a trader and be consistently profitable as well as increase your knowledge of fundamental and technical analysis. Creating a trading plan and then putting it into practice will increase your knowledge substantially.

Sidenote: Hedging the same instrument in the same market is pointless, you end up just paying more with the spread. At the point of which you’re ready to hedge, you might as well just close out your position and then re-enter when the direction of the market is clearer. The reason I say this is, hedging two positions who ultimately end up ranging and don’t show a clear direction quickly will just tie up your available money preventing you from making better trades on other currency pairs, and also cause you to waste your time checking and stressing over two positions that cancel each other out.