Today's Ideas:

    IMPORTANT : Below is what we're looking at currently, but pay attention to our UPDATES on the side of each page for actual entry/exit times and prices. Refresh pages often! You will witness our winners AND losers; something that is rare in our business.    TO VERIFY ACTUAL PRICES AND TIMES, PLEASE CLICK ON  A TICKER ENTRY TO THE RIGHT.  ALL TRADES, WHEN THEY OCCURED, ARE VIEWABLE.  Whenever possible, we have included the ETF symbol for those who are not experienced trading futures, etc.

    Thursday, June 12, 2008

    1% total portfolio risk

    The strength of the $USD has returned, causing my $CAD trade to go against me. I'll simply keep my stops at a level where I have a total risk on the portfolio of 1%. One difficult aspect of trading is once the trader has larger position sizes (from adding units), he loses capital much quicker during adverse price moves. This causes me to get to my stop levels quicker. I honestly do not care if this trade works or not, as it's just one component of a long trading career. Nevertheless, total portfolio risk must be respected. There is only one way to keep your profits in the long term, and that is to stop out of losers at a predetermined level. At this stage, I'll sit tight and see how the $CAD reacts, but adding is out of the question for now.

    I'm getting close to buy signals on several commodities, but bear in mind they are highly correlated. Typically they are not so tied to each other, but the $USD's outlook is the major influence of late. Hence my $CAD position is a synthetic commodity trade, and adding gold, for example, would be tantamount to averaging down in the $CAD. My current position needs to get stronger and hold, before I would consider adding the precious metals to my accounts. Let's see what today brings, but it's possible I might be stopped out, and I'll let readers know on the ticker. Losing money is not to be feared, but it's serious if not handled properly.

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