which turns this thread into one of the countless others, titled "I was too proud to admit defeat early on and chose to go under in glory rather than chipping away with small gains and build the book with positive pnl". Come on dude, I try to help you here, do not listen to those losers who encourage you to hold on and try to be a hero, you are NEVER a hero sitting on losing positions and denying the truth. Call me an asshole but I rather be an asshole than a losing trader. There are times to trade ranges and go against the short term trend. But this hardly applies to usdjpy in the current environment. May I be wrong? Of course but I may be wrong with a probability of 1:10. I attach a 90% probability that usdjpy will at the very least attempt to crack parity, meaning we will see prints in the 99 region.
You're not being an asshole. We still don't know why gmst didn't stop out at 96.00 on the full position. That is the worst sin of all - not following the original trade plan. How do you explain that to your boss when USDJPY moves to 100? He says, "It's good we stopped out at 96, well done for the excellent stop placement above those key levels. That's why we decide on the stop loss before the trade because we will convince ourselves of anything in the middle of the trade." Then you start to explain, "Ummm..actually I didn't stop out...well, I did on most of the position...half actually...(cough, splutter).." Your boss replies, "Shit! Oh f*** it, I hired you, it's my neck on the line too. Whats our credit limit? The only option now is to add to the position and try and get out for a smaller loss..." "Yeah I suppose you're right boss, I mean 100 will be a massive level to take out, this move has gone parabolic and will surely end soon..."
a) I am sorry to say but you did not learn anything new because you have a closed mindset and too large of an ego. I already clearly mentioned this trade was a trade done typically in a prop desk, not your typical vol trader desk. b) I agree you must have made tons more money than I have but consider for a moment that maybe in your career - you have made less money than my erstwhile boss who approved this trade. He was not head of trading without a reason!! If I tell you his career and his best year PL, you will be astonished but giving that information will be revealing too much on this anonymous board. So, my humble suggestion is if you have not seen a particular type of trading style before, be open to new kinds of information that comes your way, instead of out-rightly rejecting it.
Well, I have already admitted that this trade has not worked as planned, and I have said that countless times. So, I am not sure you are giving me any new information. At this stage, I am just trying to get out of this losing position in the best possible way.
Well, I am not sure you are giving a fair assessment here. I added 2.5% risk at 96.5 and booked profits on it at 95.5. This was not in the original plan! Couple other times also, I added some risk and booked profits on them along the way. My point is - I have deviated slightly from the original plan when market presented good opportunities. I have already cut more than half the risk at original 96 stop level. Its just that at this point, it makes sense for me to keep this reduced position on for more time. After having reduced my size, a decent amount of my capital tied-up in this position has been freed. Problem is everyone is making comment on this single trade while having no idea about my total portfolio. You should look over my trades in ES Journal. That will give you a better perspective of my portfolio standard deviation and % returns. Losing 9% over 3 months is losing 3% per month, which is a perfectly manageable kind of loss.
Well, again I don't trade this way normally at all. Here, I was trying to fade a parabola, the parabola did not collapse as I had thought it would. So, my initial assessment was wrong. I have 2 choices now - cut out the trade straight at loss X or try to do some opportunistic trades get out at loss X1 which is less than X. That is all.
And I would consider that a bad trade also. The fact that you made money on that single instance is immaterial. Hey, we've all deviated from a trading plan at some point but that doesn't make it a good decision if it means that you lose 70% of the time when you don't stick to your plan. The profit on this one trade might seem like a small "mistake" and one you can live with, but I would say the small mistakes really do matter because of our incredible capacity (as human beings) to compound small mistakes into monster mistakes. At least you're still posting to the thread, so when you reflect back on events in a couple of months time perhaps you'll be able to pinpoint any lessons learned. Why not really impress your boss and reverse the trade (go long USD.JPY at 96.50) in tiny size and ride it all the way upto 120...adding to your position on pullbacks once it breaks above 100?
I would do that if longer term (6 months down the line), I expect usdjpy to be above 96. Longer term (6 months), I expect usdjpy to be below 96, and this is the sole reason I don't go long here. A big reason why this position doesn't worry me much and I can sleep nicely is that I am short usdjpy so I am trading in the direction of risk aversion. Generally, speaking, whenever, I have been long usdjpy I have been worried if something bad happens in the world overnight or during weekends. Curious - why you think usdjpy is going to even touch 105 or 110? Is it because of US employment situation getting better or S&P strength or is it more because Japanese FinMin wants U/J at 100?