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June 16, 2008 • 2:06 pm 0
GBP/JPY hits 212.60
As I said on sunday… we will be seeing an upward move by pound this week and my target was hit at 212.05 it is currently at 60.
My first trade after 6 weeks break yielded me 4.26% net return heh….
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April 8, 2008 • 3:39 pm 2
Drawdown – and Management
Being right about the market doesn’t mean you will make money out of it. Last week, I was heavily short on GBP/JPY. My ZuluTrade account suffered a wonderful -2000 pips position at one point. Even though my fundamentals were in place, my timing was out of place. Today I closed all of short trades with a total +170 pips worths 450 pips in scaled in positions.
Getting regular profit but having a bad week can wipe an entire account out. I’ve faced that and this time I was eager to focus on management so that I can get out of it with a functional account which will not require to fund from my previous profits.
Trading is all about equity management. Entry and Exits are really formalities. My strategy gives me some great flexibility over my capital management. Because my weekly ROI is high up in the 3-5% region I stick to, up to 50% drawdown. At that point my Plan B kicks in. Plan B is cutting my losses short not quitting the position all together.
How is that?
Lets say I’m down -400… and I’m seeing there is a lower time frame retracement is about to move it to -300… I’ll scale in and get out at -300… which will ultimately become -100 pips. Why?
That’s the art of scaling in and scaling out. At -400 I’ll add same quantity of position to the same direction. That will bring the entire position to -200. With a 100 pips retracement I can close 50% of scaled in position at -100 pips so my actually loss becomes -100 pips. Then I’ll let the rest of 50% ride. If it goes to +10 I’ll evaluate the situation again and think if the trade is still valid or not.
This is one of my major tactics to manage drawdowns. Well it will only work if you use a very low leverage. With high leverage there is hardly any chance of manipulating your positions. That is why professionals don’t use 10% margin but stick to 1% or less.
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April 7, 2008 • 2:23 am 0
Mid Term and adding indicators
Too busy with mid-term and major assignments to trade. Trying out OsMA oscillator for divergences now days. I’ll update the blog once I finish up with mid-term this week and after some crazy hang overs.
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March 23, 2008 • 7:14 pm 0
Testing Windows Live Writer
Test test… here is a picture…
A picture of my campus.
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