Advice needed guys

[davealsolh]

Hi guys,

Been a regular reader on here for ages! Anyway i have a long ftse index position which i have had for a couple of weeks, obviously been taking a hammering recently, and here is the thing i don't know what to do with it, i want to try and protect myself from further downside (as i got a gut feeling its going lower) but I am not sure best way to hedge, as i can just see myself hedging by opening up a short position, then there being an upturn, so closing the hedge at a loss, then to see the ftse falling again, and back to square one (and incurred additional loss). Or alternately just taking the loss and closing the position out now. Would just like peoples views and any possible methods that im not thinking of??

Cheers
guys

 

[pboyles]

Make your own decisions, if you ask others some will say close, some will say keep it open and some will say hedge it. In other words there is no right answer. No offence but you should have had this thought out before you opened the trade.

 

[shadowninja]

Close it, start again after much better research/practice! The hedging you describe is pointless. Why not close the position (you are, effectively!) then open when you think it's time to go long.

 

[dealer911]

Do not "Hedge" it by selling another FTSE - Close the position and clear your mind as you are not going to make good decissions when you have the pressure of an open position thats losing you more than you had anticipated when you put the trade on - A bad position can always get worse..keep a light grip and let it go!

 

[Hoggums]

You said your gut feeling was that it would go lower. So why aren't you short? You are holding on in hope and you believe that decision is wrong!

Close the position and learn to use stops would be my first suggestion.

However you could buy a FTSE PUT option to protect your downside (if your sb does options). You will need to buy a far dated option as it may be some time before the index rises and that will cost you up to a further 200-300 points depending on expiry and or when you close the position.

To be honest I think that is window dressing and you need to realise your loss and formulate a better trading strategy. I don't think you'll be able to make this loss good. Particularly when your belief is opposite to your position.

 

[bbmac]

It's looking pretty ugly isn't it - below is the daily chart of the ftse100 cash..wether you are trading from a technical or fundamental perspective.

Technically t/f's to 4hr are in a downtrend and Daily too has printed a LL now and has re-entered the range consolidation on this daily t/f that it saw from early August through to mid October before the upside b/o to the 76.4% of the a-b move and from there, driven by fundie events it has been all downhill. It is now approaching 76.4% of the c-d move within that previous daily range.

The question you gotta ask yourself is technically or fundamentally - what is there to suggest that the greater probability may be a sustained price movement to the upside ? This is aside from the question of wether you are in a hope trade against even your own gut feel.

Whatever you decide,

G/L

 

[tomorton]

Going into a trade I used to focus wholly on the entry signal and optimum entry price, as long as the chart looked more likely to move in the direction indicated by the signal I was happy. However, I am now more profitable and less stressed by identifying two exits before I even open the position - a stop and a target.
* The stop is the price nearest to entry level which neutralises the entry signal. i.e. whatever was visible in the chart as a probable direction indicator has been cancelled. At this point, close the entire position, no exceptions.
* The target is level which, based on either experience or TA or a combination, price is very likely to reach. At that point I take all profit and look for a new position. Much easier to find new positions than to manage old ones.

 

[gle101]

Hi guys,

Been a regular reader on here for ages! Anyway i have a long ftse index position which i have had for a couple of weeks, obviously been taking a hammering recently, and here is the thing i don't know what to do with it, i want to try and protect myself from further downside (as i got a gut feeling its going lower) but I am not sure best way to hedge, as i can just see myself hedging by opening up a short position, then there being an upturn, so closing the hedge at a loss, then to see the ftse falling again, and back to square one (and incurred additional loss). Or alternately just taking the loss and closing the position out now. Would just like peoples views and any possible methods that im not thinking of??

Cheers
guys

I think you have to look into Risk & Money Management to avoid this kind of emotional trading situation. Read about on the net and it will save you a lot of pain going forward. I am myself using a Money Management System which is taking away the stress and the emotional side of trading.

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"Take control with Risk & Money Management"