A Morning Waking Up To 7k Loss And 50% Margin Used

The above is what I woke up to on Friday morning. My 4lot size exposure - very unusual that I get sucked into positions of such a large size - showing me over 150 pips in the red. A total of over 7k USD. The margin used was showing over 50%, something I don't think I'd had since last summer.

I felt sick, annoyed and stupid. I thought how is this possible that when I had my strongest conviction it goes against me so quickly. It was painful as I had just comeback to breakeven on my account after 8-9 months of being in the red. Knowing that you've destroyed so much in such little time is a blow to the stomach.

What did I do when I saw the over 7k loss? I thought of increasing my position further for a second. That idea was quickly scrapped as the weekend was coming up and I'd get a margin call if I increased any further. So I just watched in horror. I didn't want to close, but I was very very close. I think if EUR had kept moving up I'd have closed out with 8-9k loss. Or maybe I'd have just frozen and been liquidated automatically.

By friday evening my margin used was fluctuating between 30-34%. I transfered another 2-3k to the margin account so that I could carry the trade over the weekend. I got an automatic email from my broker shortly after 22.00CET alerting me to the fact that I was on level 1 of 3 margin call levels. That email just being a warning that it's getting tight regarding my account. I hated that as it reminded me of my "Maximum Pain" day. It was like a replay. This time I held tight (a bad thing to do really) - like a stubborn mule. My rational was: If all the shorts got blown to bits like me Friday morning CET and market is flat to lower vs the highs there's some hope I can see some extension of post-squeeze pullback.

As you have surely seen from the action today EUR is off and I've closed my position at a tiny profit even though I feel very strongly about EURCHF retesting the lows in coming months. But I just can't control myself as I should be able to. After being so deep in the red and then coming back to very light green, it's really really difficult for me to hang on to a position. It's so classic. Letting losers run and closing out winners quickly. I thought the first part of the week had shown me I could let winners run better after all, but I'm sure my instinct is just a real problem.

Final P&L is +536$ after -7'700$ at one point. It has proven that my account is at risk as a whole. The account size is the stop loss. That's scary.

EURCHF - SNB Intervention surfing

Sold some EURCHF, kept going up, sold some more - then it came back to entry of 1st lot. I got out and of course it keeps going down as I write....

But, today is definitely a good day! It's best when a central bank is screwing around as it gets all those quants and algos on the wrong foot? I always trade best when it's humans messing around !

How Surreal! Close @ 1.22887 :: ECB is starting intervention?!

Incredible ... EURUSD shoots up, I don't know what the hell is going on. But I decided to close my "oversize" position!

Nice move! Jesus!

God must be on my side in 2010 ;) Or the ECB is starting intervention?!

EURUSD Stuck Long - Entry Price 1.22219 - 2lots

Interesting sideways action just 40pips below my entry. I had gone in with 1 lot at 1.22689. It fell to 1.2160 - I bought some more at 1.21749. It jumped right back to breakeven yesterday evening - even a 100$ profit. Since it has collapsed back down but seems stable. Showing me 890$ unrealised loss.

Are they going to shake me out by riding it down to the big big 1.2000 ?!

But unbelievable how it keeps knocking its head at exactely my entry price! (see below) God must know I'm long :( .... ;)

Are Finance Ministers Idiots?!

EU ministers thrash out details of loan scheme

Group vows to establish global tax on financial transactions

Read the above headline on in the FT. In the article it quotes ministers who think Hedge Funds, Speculators are to blame - and to be punished with a tax on financial transactions - for the girations in the CDS market. "Group vows to establish global tax on financial transactions" <-- Yeah, that will really really help *rolleyes*

Actually this article is better to link to as FT has subscriber-only access:

http://www.guardian.co.uk/business/2010/may/17/hedge-funds-eu-regulations

But after months of threats and deliberations, French, German and Spanish leaders within the EU are expected to push ahead with a directive which is aimed at clamping down on speculators who they believe contributed to the global credit crunch and more recently pushed Greece to the brink of collapse.

Read that quote above and you feel like shorting EUR even at these levels. These guys really don't get it.

I've been watching the action in the CDS market. And there's nothing inplausible or immoral about what's happening. Why wouldn't anyone buy protection when a country like Greece has lied about its accounting and is seing massive strikes and demonstrations? Why wouldn't people sell EUR if there's a real risk of contagion? And now demonize and tax the people hedging their portfolios? 

Finance ministers are politicians just looking for scapegoats for their own (or predecescors) shortcomings. No tax on transactions is needed. It's pretty disturbing that these morons think that they can somehow hide the ugly truth that a lot of EU countries just have been fiscally responsible the way a 5year old is responsible when given pocket money and sent past the sweet shop... They need to realize that they can't spend money they can't repay. Isn't it incredibly irrational to want to punish people wanting to protect themselves against this accident happening in slow motion?! 

Current account status: -1.8k (year-on-year)

Biggest mistake of the week:

I'm always buying into dips of a major downtrend.

Biggest gamble of the week:

Doubling up into an accelerating down day. (That's also a mistake I guess.)

What should be happening:

Selling EURUSD every week, doubling up every week. (We've been going down for 4 weeks I believe. Ha! Trust me to come to that easy conclusion when we've lost 2500 pips in recent months!)

BTW: Just as I was writing this I had to sneeze. As I opened my eyes I heard a splattering sound on the floor. I'm glad I didn't sneeze at the screen. Who'd have thought so much "stuff" can come flying out one's mouth when sneezing. Quite fascinating (and a bit disgusting). Reminds me of the time I was in the supermarket and an old lady sneezed infront of the fruit... :S Always wash fruit from the store!

Picking A Level And Watching It Accelerate Away From Entry

One of my classic trades *. It falls by 75-100pips. I hop on. It looses another 75-100pips. I double my position. The pair makes a comeback and I net a profit (59.1pips) on the 2nd lot and take the loss (-13.9pips )on the first.  *just sometimes I don't get off so easy!

Good thing I was watching Kick-Ass when I put the trade on. It kept my mind off getting too frustrated. I did get annoyed and double up, but then I kept my eyes on the movie 97% of the time. Maybe it's best to just watch currencies out of the corner of ones eye and do something else with ones mind aswell. 

Won't work for scalpers I guess. But for swing-bounce-whatever trading style I have it's quite useful. But the moment my position was showing me -880$ wasn't cool. But I've gotten use to watching something go against me. Second time in a row I've cheated fate. Mustn't overdo it. Otherwise I'll be writing about a 6k loss in the not so distant future!