Hi guys, so, an update and also a lesson in how you can win even if you get everything wrong (hopefully - as this statement is a bit premature). I started this trade 12W ago. I was shorting copper. Since then the price shot up (literally on the exact day I opened that trade) and has now come back down again. From following the daily trend up and then down again, i’ve made £12K in unrealised profit. So basically, if the trend continues down to 29500i’ll realise this profit and walk away with the £1000 per week that I aim for. If the price shoots up again i’ll just keep following the trend and eventually make money, although this will obs be a much slower proceds. Unless copper never, ever again falls to below 29500 (on the chart i’m usimg), then i’ll make money eventually. All i need to do till then is follow the daily trend and not blow my account (will involve closing some individual trades at a loss).
By this, do you mean open new positions in the direction of the daily trend? If so, what size positions do you open, and are they larger than the previous positions going in the opposite direction?
Also, I find commodities pricy to hold long term. What are your daily fees for holding?
Yes, I buy in the direction of the short-term trend, while maintaining a bias in favour of the long-term trend. The positions I open (up to about 40 in total) are all the same size, the amount dependant upon my account size. At the moment each position is about £1000 (before leverage) worth of the commodity i’m trading and yes, you’re absolutely right - long-term my over-night funding fees amount to a loss of about 5-10% of my total yearly profits. Last 12 months over-night funding has cost me about £5K. It’s a drain, but I haven’t figured out a more economica l way to do it. Any suggestions?!!
So far this strategy has always worked for me long-term. The biggest draw-back is ocvasionally making thousands of pounds worth of losses when I have to sell loosing positions when the trend is moving too far away from me, in order to stay in the trade without blowing my account. However, I find this is cheaper than setting stop-losses. In fact, one could look at it as having very loose/wide stop-losses which I only invoke once my account is in danger.
Are you only trading on your phone? Or do you use a computer?
Or is it the same thing to you?
Hmm this makes sense. Although when thousands of pounds in losses will definitely keep me up at night hahaha
I trade on both. I prefer my computer, but as you know sometimes one only has phone access. Week-ends I have a good sit-down with my laptop and think about the week ahead.
Would using the forward price as oppose to the spot ,be compatible with your trading style or maybe a combination.
So I’m still in this trade. Essentially if copper falls to the horizontal line i’ve drawn i’ll be in profit to the tune of £14K (net of overnight funding fees) on a £55K stake for a trade that’s been going on for 14 weeks. We’ll see what happens…
Is forward price trading (?futures) cheaper?
forward prices, your not charged overnight fees until the contract runs out (about 3 months)though the spread is more expensive.
Ie on the platform I use
High grade copper spot spread priced 20 forward spread priced 40
I’m Trading London Coco spot spread fluctuate s between 3-4
Forward spread fluctuate s between 4-6
I can relate to your earlier post ,Im holding positions for a while, shorting London Coco , originally I was credited overnight fees on the spot, as the position still open I’m now debited overnight fees it seems abit extream eating away any potential profits
Thanks for the advice @greenscorpio .Yeah, the overnight funding is a pain. However, I figure that as long as i’m still making net profit I can regard it as the cost of doing business. But during dry-spells, paying up to £40 per day gets a bit nerve-wracking!!
Yes I know what you mean
So basically, not to get too technical about it, if copper goes below diagonal resistance line i’m in clover. If it goes above that green 20MA i’m f**ked. Weekly chart.
No profit this last week. I’ve been concentrating on positioning myself for both eventualities. If prices do go north it’ll be a long, hard slog but at least I won’t blow my account. It’ll just mean this trade continues for at least another 3m…
Copper just following the dollar (inversely) at the moment.
