i could short here for that 56 and cover above 73 for a smaller loss than the whole wad,i could also be up 2 1/2 and lose 7 1/2 for a net of 5 loss,but never lose more than the 5.
Understood. The max loss is not per trade is cumulative per month, once that is hit, game over til the next one. Thanks for the quick replies it's interesting to watch you trade, an unconventional approach that does well for you, so thanks for taking the time. You did leave me scratching my head with something. If you need your average monthly gain to come up with your max risk numbers how do you begin in the first place obtaining your monthly average gains ?
if you hit your max loss and then stop for the month, do you think you'd lose opportunities in that month to make profit? btw well done
Time decay got me on the SPY put options, 1 closed at BE, the other at a $ 30.00 loss. This was made up by my EUR/USD long position. I went long EUR/USD yester heavy no stop with a target to scale out 1/2 the position at a target price. It 1st went 30 pips against me, and I killed the trade at loss. But then did some analysis, and reentered the trade and made 40 pips on 1 position and 50 pips on the other, both were closed late last night. I have again gone long EUR right now, this is a light position, and bought some April 2011 yahoo calls, both positions are light. No stop or target on EUR, plan to average in to make it equal to previous position unless something changes with how the dollar is being devalued. I use mostly time based stops on EUR and small enough positions vs account, that a bad move will not hurt my account since I am probably risking 1% on these trades. I actually believe stops are worthless for Forex for long term profits, but you can't turn a trade into an investment, which is why I previously got out at loss on 1 trade, and will not hold these positions more than 3 days.