I’m a newbie. 
I tried to learn a lot of things. But I still have a lot to learn.
I have a problem. I opened a position and it didn’t work.
It got even better. It droped a lot. More then 600 points and now I have a problem with my margin levels.
I tried to hold my margin levels so that i opened a position in the oposite direction. And now I’m going to try to take it slow. When the price goes up I’m going to close this position and try to open it a few pips higher.
Do you this this is going to work or is it better to close the position and start over again.
Thanks for the help
Let me get this straight. You tried to prevent a margin call by opening a second position in the opposite direction of the first. Now I’ve never actually done such a thing (and would not) so I don’t know the specifics, but doesn’t that mean you have twice the margin requirement now since you have two positions on? Or does the fact that you now have no net position on (long + short = 0) eliminate your margin requirement as far as your broker is concerned?
Regardless, let’s do some math here. Your initial long suffered a 600 pip loss, so you were at -600. You put on a short to stop the bleeding. Because of the spread, that position will initially be in the red two. Let’s say that’s 2 pips, so if the market hasn’t moved at all you’re now down 602 pips. How do things get better from here?
The answer is they can’t while you have both positions on. For ever pip the market moves in favor of your long it moves against your short, and vice versa. You’re locked into your 602 pip loss.
You now have to trade yourself out of the hole, which sounds like a pretty big one in terms of your account balance. That means if it makes sense to be long at current levels, then remove the short, and vice versa. If neither position makes sense right now, then close the whole thing out and wait for your next opportunity.
Hi,
sounds like quite a mess!
A few questions for you so we can try and help.
A big part of trading is looking at what you did wrong and then making sure you learn from those mistakes. That how your going to become successful and start making the big profits everybody looks for.
-
Is the account a demo or live?
-
Was having such a large stop part of your trading plan?
-
Give some details of the actual trade, entry and more importantly what triggered your entry.
From what you have written i think the money management on your trading plan needs to be looked at and reviewed.
N
Well no i’m now not in the gole for 602 pips.
I have a long position on buy and a short on sell. So my account balance when the long goes down it doesn’t eat my margin any more. when the price goes up I close the short position and try to one about 10 pips or more higher so that if the price goes down again it doesn’t eat the margin.
Yes it’s a mess. It’s a live account. So it even worse.
I opened the first buy order from a trade on the news which didn’t go as planed. I put only 2% of my account margin on it so it shouldn’t be a problem with my margins. But I was stupid and I didn’t put a SL on the trade and I left it. The strategy wasn’t that big SL.
The actual trade was.
Buy usdcad at 1.0147
and now I have a sell at 0.9821
So i’m -345 on the long trade and +14 on the short trade.
My goal now is. When the price goes up I close the short with maybe a few pips profit and then open a short position when the price goes down again so it doesn’t eat my margin. I still have a 600 % margin left so it’s not that bad. But i doen’t want to close the long position with that loss. I don’t have a big account so i will not lose that much money. But I want to learn so i don’t make the same mistake again.
Thanks
It sounds like you at least didn’t make the mistake of trading too big so I’m not sure at all why you’re worried about your margin. It’s the least of the things you need to concern yourself with at this point. (not sure what you mean by 600% margin)
I’m not really following the logic of your proposed strategy moving forward. If the market moves higher you want to exit your current short (which is in the money at the moment) at a small profit. Then, if the market starts falling once more, short again? And all this is to avoid taking a loss on your long? I’ve got say, this doesn’t sound like a strategy that’s going to pay off. You need to make back an awful lot of pips, which you are very unlikely to do with this adding and removing of short positions. Keep in mind that if your short is in the money, that means your long has gone further against you, so you’re not making any profit there.
Listen. No trader [I]wants[/I] to take a loss, but it’s something we all have to do from time to time. You need to cut the trade loose, take your medicine, and learn your lesson. If you persist in this strategy you will probably only make the loss larger and/or won’t really learn what you need to learn.
Yes i know that this strategy is not very usefull for a lot of people.
And I don’t know what I’m am trying to do. the 600 % margin is mense that I have about 1/4 of my account in free margin teritory.
So you think it would be best to take this loss and start over again. Like learn the lessons and don’t make the same mistake again. Something like that.
I know that the spread is huge and it will probably never make it back in the positive. But i did make around 30 pips trading this strategy.
So I will probably try to make this work or in the worse case i will lose the rest of the money in my account and then start over.
Thanks for the help and all inputs on the question.
I’ve got to admit im not a big fan of trying to play the news, its not the easiest way to trade, to me it is as good as a gamble.
I believe that most brokers welcome this style of trading as you are taking a put and playing into their hands, they increase the spread at news times which makes it even harder to make a regular profit.
If you are going to trade the news you need to think about your money management as a 600 pip move on a news trade sounds like far too much.
finally let me give you and idea of what i do, i trade long term, i shorted the usdcad @ 1.0031 and i am up just over 200 pips. That was just over 30 mins of work.
N
You made 30 pips on what strategy exactly? The take an opposite position if the market goes against me one? I’d be willing to bet that those profits weren’t a direct result of this concept. It sounds like you’re trading directionally. This is not an efficient way to do so.
More importantly, though, you say “I don’t know what I’m trying to do”. To my mind that means you should get out and give yourself the space and time to think things through without the emotional pressure of having that trade on. What it sounds like you are attempting to do will not get rid of that loss. It can only make things worse and there’s no need to ride your account down to an inevitable margin can whereby everything gets automatically closed out for you anyway.
I see you trade long term. But doesn’t that mean you need a lot of capital to cover the spread.
Which indicators do you use to know how to trade long term.