Please help 5 figures at stake - funny, stupid and dangerous - please look inside!

[Ray'sCookie]

Okay I see this can be funny for a lot of you, but it is the least to me. I know none of you owes me anything but please help me by thinking of the best course of action. I don't plan to leave this trade with a loss. If I do I'll be working to repay my dad for a year.


What happend?
This morning I opened a long position on the DAX @ 11.661,38. When I figuired out how stupid I was to open at a top and my position started to plunge and my losses start to exceed far more than thousand €, I decided to short on the DAX @ 11.608,58. I did this to lock myself in and protect the remaining account (5 figure account and not even my own money as you allrwady know ).

I hope you guys understand I'm dead serious.

My plan now.
I now plan to wait for the market to go "hard" in one way so i can close one of my positions and still gain back what I lost.

How do I go about this? How do i decide when is the most safe time is to close one position? What do I have to look for in the trend to know which way it wil be heading for the coming days?

I understand I had to ask all those questions before even opening an account but I'm here now.

Please help

 

[Archaic]

Who knows which way it'll go, it's very hard to predict. Have to sit down and analyse a lot of things when opening a non technical, non day-trade - e.g. analyse china, commodities, upcoming earnings, upcoming economic events and decide where you want to be. Since you're still breaking even you could try doing a trade when you're confident it's going in one direction - but only with strong reasoning and make sure tohave a good stop loss to prevent greater losses. If it doesn't work out, you tried, the loss is only smaller, but defo don't try to claw it back through more trades if you're new to this. If you don't have a lot of experience though perhaps it is best to accept the loss, prevent it being larger. Perhaps withdraw the rest, and start over with a small stake and slowly try building that up? The lessons you learn from small stakes stay with you, but they're hell of a lot less riskier to deal with.

My 2 cents on where Dax is atm -
Earnings seasons coming to an end so it shouldn't be that much of a factor anymore, however china's very uncertain at the moment (could be a big drop at any time) and commodities are at lows and don't really seem to be slowing down (some interlinking with china). However earnings have been on the whole decent for german companies, and so the natural tendency to rise might offset those risks. Allianz reports tomorrow and as insurance companies have been doing decently it's likely to go up, but whether that'll mean it'll offset loses in any other shares in the DAX is a mystery. I've looked at next week's earnings for Dax and they're not looking great at all - 2 energy companies, 2 commodities companies and a consumer products. The last one could be positive but the other 4 you'd expect to not be great given how the rest of the sectors been doing.

Today I'm neutral to slightly bearish, I see no specific reason to go long, with China, commodities, and the Fed interest rate hike next month dragging down. If esepcially china and commodities start to do ok I'd look more towards a long. I'm not advising on a short either however - as you know it's down 100 points atm on Wednesday's close. US stocks seem to be dragging it down further as we speak - but predicting how US stocks will end the day is a nightmare too. It looks like it'll drop a bit more as there's no bull signals and there's the US job reports too tomorrow - though the effect of that I haven't fully researched. I'm always weary against shorting/longing a position when it's already dropped/risen a lot, so I'd advise extreme caution in going with the trend. Right now no major signal in either direction really.

 

[tar]

Technically you are now flat and your loss is around 53 points in the dax , why is that dangerous and devastating ? 53 points are nothing and you should be able to make them back . So you have never lost 50 points ? I don't understand .

 

[Ray'sCookie]

Technically you are now flat and your loss is around 53 points in the dax , why is that dangerous and devastating ? 53 points are nothing and you should be able to make them back . So you have never lost 50 points ? I don't understand .

Dangerous and devestating because I apparently have no idea of what I'm doing. How do I decide when the market actually has momentum so I know when to close one of my positions? Unlike my long opening at the top today @ 11.661

I'm being emotional because I have fear right now.

 

[tar]

Dangerous and devestating because I apparently have no idea of what I'm doing. How do I decide when the market actually has momentum so I know when to close one of my positions? Unlike my long opening at the top today @ 11.661

I'm being emotional because I have fear right now.

My humble advice : Close everything and withdraw the money .

 

[Ray'sCookie]

My humble advice : Close everything and withdraw the money .

I get your point, but I won't. But this must be solvable with time and the right knowledge.

If I knew what to look for in the trend so I knew when the trend has it's momentum in a certain direction I should be able to close one position and leave this trade without damage.

 

[timsk]

Hi Ray'sCookie,
If your 5 figure account is £50k or more, then you're down around 2% on the day which ought not to be an issue. If it's only £10k, then your loss is nearer the 10% mark which most traders would regard as too large for a single trade. Needless to say, another nine of these and it's bye-bye account time.

Trying to trade your way out of trouble probably isn't the best idea, IMO. Without wishing to sound rude and patronizing, if the trade has gone very wrong (which I assume it has - hence your post), then either your trading plan isn't working or you're not following it properly. Either way, attempting a complex damage limitation exercise and trading your way out of trouble is more likely to result in further losses than it is in retrieving the situation and getting back to break even or better. Sorry to be the bearer of bad news, but if the trade has gone bad, it's probably best to cut it asap and learn from the mistake and ensure you have measures in place to prevent it from happening again.

If it helps - most of us have been there and bought the T shirt at some point or another - so you're in good company. I've done it - losing £3k in 24 hours on a £5k account. The other thing is to thank your lucky stars that it wasn't a whole heap worse. There are members here who got caught by the SNB fiasco last January - some of whom have lost their life savings and are facing bankruptcy. So, whilst it may not be a great day at the office - you can still bounce back - better and stronger for the experience.
Tim.

 

[tar]

"I decided to short on the DAX @ 11.608,58"

 

[Splitlink]

If it's true that he'll be working to repay his dad for a year we must realise that this is borrowed money.
All that I can offer is sympathy, close the trade, leave trading for good and join Gamblers Anonymous.

 

[Ray'sCookie]

@ Timsk It's 10K indeed.

The problem is that I didn't go in with any plan as stupid as it is might be. I've been reading a book on technical analysis for the last weeks and thought I could just jump on a trend and ride it out as long as I could see some indications for it to go up. So Spitlink is right it was a damn gamble and it is not my money.

However since my positions are still open this trade is going. I have with this the ability to take a breath and continue this same trade on a diffrent path then I entered it.

Where should I start? analyzing the dax in general? fundementals? please redirect me to the right topic.

 

[Splitlink]

@ Timsk It's 10K indeed.

The problem is that I didn't go in with any plan as stupid as it is might be. I've been reading a book on technical analysis for the last weeks and thought I could just jump on a trend and ride it out as long as I could see some indications for it to go up. So Spitlink is right it was a damn gamble and it is not my money.

However since my positions are still open this trade is going. I have with this the ability to take a breath and continue this same trade on a diffrent path then I entered it.

Where should I start? analyzing the dax in general? fundementals? please redirect me to the right topic.

What future did you trade? How much time do you have?

 

[tomorton]

Short-term -
Factors indicating a fall in the DAX is (a little) more likely than a rise -
* has printed a shooting star (a rise through today's high would cancel this pattern of course)
* the high is lower than the last swing high (20 July)
* if you put faith in such things, RSI is showing very over-bought

Tomorrow you might set a target price below today's close at which you would be able to exit with an acceptable loss. Don't worry about getting back the money you lost on the long, that trade is dead and you have a short only, that is your concern now, trying to get out with as little loss as possible. You might close part of the trade right away to take some of the risk out. If price goes strongly higher in the morning, get out anyway.

Long-term -
1. Trade with the trend – no trend, no trade
2. Plan the trade, trade the plan
3. Wait for the signal
4. When the signal comes, don’t wait
5. A weak signal is still a signal
6. Trade what you see, not what you think
7. Never let the profit go back into the market
8. Set a stop-loss on entry
9. Always obey the stop-loss
10. Don’t wait for the stop to be hit, start cutting losers early
The Sins of Trading
1. Trading against the trend
2. Trading without a stop-loss

We've all been there. Survive and learn. Be lucky. Live long and prosper.

 

[darktone]

Where should I start? analyzing the dax in general? fundementals? please redirect me to the right topic.

Are you still in? If you are, how are you feeling today in comparison to yesterday, better, worse?
A topic id suggest for you, is you. You can start with a book called 'Trading in the zone'. Google an download a pdf or buy it.

Lets have a quick look at what you did. Is that about right?

 

[Hoggums]

This is not going to end well.

Regardless of what you say - you are now trading scared and revenge trading never works.

You will also start losing more money on the account when the overnight financing charges start hitting those opposing positions.

Take the loss and put it down to experience. You got too greedy too quickly and now your fingers have been burned. Trying to trade your way out of this mess will probably make things worse as you are paralised by fear.

 

[tomorton]

DAX fell 60+pts from yesterday's close. Its now recovering and the daily pattern shows as a hammer now, which is bullish. We have US non-farmpayrolls in a few hours - I don't know how much impact thoses releases usually have on the DAX but in the interests of reducing exposure to risk it might be nice to get out before then. Or are you already out?

Don't hold this over the weekend. Very few things that are positive for the market happen over the weekends.

 

[timsk]

. . .Take the loss and put it down to experience. You got too greedy too quickly and now your fingers have been burned. Trying to trade your way out of this mess will probably make things worse as you are paralised by fear.

Hi Ray'sCookie,
On top of financing charges, today is a special day in the month for many traders - it's nonfarm payrolls (NFP) at 1.30pm. Depending on how U.S. equity markets react, along with the dollar, there may be a knock on effect in the Dax. So, don't be surprised to see increased volatility around that time. If you're absolutely determined to ignore the advice offered here and to try and trade your way out of the hole you're in, NFP might be your best bet in the short term. But it's a massive gamble - on a par with punting on black or red in roulette - and probability favours the outcome outlined by Hog's, above. So, if you attempt to do it, don't be too surprised if your week ends by going from bad to worse.
Tim.

 

[tar]

Hi Ray'sCookie,
On top of financing charges, today is a special day in the month for many traders - it's nonfarm payrolls (NFP) at 1.30pm. Depending on how U.S. equity markets react, along with the dollar, there may be a knock on effect in the Dax. So, don't be surprised to see increased volatility around that time. If you're absolutely determined to ignore the advice offered here and to try and trade your way out of the hole you're in, NFP might be your best bet in the short term. But it's a massive gamble - on a par with punting on black or red in roulette - and probability favours the outcome outlined by Hog's, above. So, if you attempt to do it, don't be too surprised if your week ends by going from bad to worse.
Tim.

He is long and short .

 

[tar]

The guy couldn't handle being offside 50 points on the DAX = He shouldn't be trading live for now .

 

[darktone]

Guys, hes hedged! The only costs hes gonna accrue is financing. From a position risk point of view, doesnt matter what the market does today or over the weekend.
Hes trading scared, thats obvious by where he took those trades.
Hes not trading with risk capital, hes trading with 'I cant afford to fn lose this' capital.
He realises that he doesnt know what hes doing, so hes not all stupid then

He has options, depending on how the broker runs the margin:-
He can throw his up and trade out. (the typical t2winner choice)
Partially trade out aiming at value.
Build a position and aim at an out.
Am sure theres more.

Hes fearful right now, doesnt mean you have to compound his fears with your own.

 

[darktone]

The guy couldn't handle being offside 50 points on the DAX = He shouldn't be trading live for now .

I agree, but I think its his size more than points that got him