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Risk

The Hard Truth About Trading 😅 Well, that is just a joke. Or not a joke? In every good joke, there's a sliver of truth... So many people blew their trading accounts in a blink of an idea chasing the profits, so many people went bankrupt practicing leverage trading... Do not be that guy in a picture. Be a true trader! Never forget about risk management and don't be greedy. Never let your emotions control you. Stay calm and humble while you trade. Have a great weekend! ❤️Please, support these drawings with like! It really helps!
Education
by UnitedSignals
10
MrRenev portfolio exposedHere is my current short term portfolio. This might give the reader an idea of how a moderately diversified short term portfolio might look. I use various tools (including turbos, options...) so it's hard to say how much I have in, but I know how much of original risk I got. Which is today €500. I added my little XRP bag from earlier this year to my crypto holdings to get to exactly 500. It makes more sense to build a PF looking at risk rather than the size that doesn't mean anything by itself. Of course I have some winners and I have trailed my stop so this is why I precise "original" risk, that's the risk when I opened the position. The whole thing is maybe €40,000 with €25,000-€30,000 in Forex which would make it around 70% but it is less volatile, in "risk" terms it's actually 30%. Entry stops are tight (for example 0.50% with FX, 2% with S&P, 1% with commodities depends). I am sure I have 25 to 30K in FX, it's the rest that is hard to evaluate. Here is the detail: 30% - Forex: 2 longs on the Yen, 2 shorts on AUD, and short USDZAR. 25% - Commodities: Gold, Platinum, Natural Gas. All long. 23% - Indices: All in the S&P500 long, pyramided in since April. 12% - Crypto: Mostly Bitcoin. And a bit of XRP (it's less than 6 month old). 10% - Stocks: Pfizer & Moderna. I also have a few stocks & cryptos that I hold long term and have not listed here. And cash in the bank. And physical goods in my house. I even have stamps and a few old coins. I don't check on it every day, or week, or month, or year, but I really don't care about the long term stuff, I am focussed on the long term. Looks like I have found a perfect trick to not worry. I am not "ultra" diversified, but some billionaires have hinted that diversification may be for idiots. If you saw Ray Dalio present his "holy grail" you know that (roughly) you get a huge improvement in risk adjusted returns going from 1 to 5 (good) positions, a little more improvement going from 5 to 10, and it basically flatlines past 10 positions no matter how much you add. This is universally true, I'm sure it can be proven by a mathematician and the limit of growth will be Euler's number 2.718 (like maybe the stdev can only be improved 2.718X?), no matter how many uncorrelated positions are added. The reasons for having dozens of positions is either you're such a whale you have to, or you're trying to attract clients and plenty of positions makes you look pro and justifies the cost and also makes it look too complicated to do for a novice. My positions shown here are all short term, with: FX and Commodities and Stocks (65%) all under 2 months S&P500 and Crypto (35%) all under 6 months I have been long US indices since September or October of 2020 but it was tech100 and I closed it all since then. 33% of my holdings are correlated to the US stock market but I am in the green on the S&P and have guaranteed stops, I have pyramided into my winner over time, so there is actually no major risks there. I am not a professional risk manager and I don't give advice but I don't think I have crazy risks. No single instrument (a currency, an indice) ever has a leverage over 5 (when adding all pairs or all correlated indices). The max leverage I have been using on a position ever as far as I can recall is 2 (0.25% stop loss with a leverage of 2 = risk of 0.50% on the single position). Anyone who understands elementary school level maths should be able to understand the problem with too much volatility: A 3% drawdown takes a 3.09% profit to get back to breakeven. This is 3% more (3.09% is 3% more than 3%). A 10% drawdown takes an 11.11% profit to get back to breakeven. This is 11.11% more. A 30% drawdown takes a 42.9% profit to get back to breakeven. This is 42.9% more. A 70% drawdown takes a 233.33% profit to get back to breakeven. Good luck. Simply since this is short term there will be much more volatility, so careful with leverage! (Indeed, if a long term portfolio had say 15% deviation happen every 100 years, the short term one could have this every 100 months or even 100 weeks). And then there are the black swan events... They don't happen but when they do it stings. And in one's career they WILL happen. Bill Hwang got destroyed by having 5 leverage on all his money, concentrated in a few stocks. The "Swiss Franc Tsunami" was a 15% drop. You'd have to be a complete mongrel to get wiped out, that would require over 6 leverage on a single currency. Legend james Cordier had next to 100 leverage divided between only half a dozen commodities, he was riding at least a 10X on NatGas alone. Even if you had 10 leverage on stocks but distributed in 10 a 20% gap down wouldn't wipe you out it's very unlikely they ALL gap down. Don't go 10X in stocks even if diversified, that was just for the example, in the EU it's not even possible anyway max is 5. I even posted ideas for some of those positions With Bitcoin I think I post everything. Not sure. Almost 1 year ago, "buy area visited", hah I actually bought the very bottom. As I said this is nearly 1 year old but I moved to the S&P500 back in April to catch a new swing. 2 different trades within a long term bull bias. Buying pullbacks with tight stops you get stopped often but you also buy the very bottom often. I probably mentioned my transition to the S&P500 somewhere but without details and I don't write every single time I add or take profit or reduce my position. Might add a bit to crypto if it keeps going. Hopefully I get to short GME soon, should reduce my overall stock risk, maybe. It can always shoot up while the rest crashes down, I don't think this is likely it's a 1/100 thing, it does happen, and you want to make sure you'll survive it, but it doesn't happen that often so it's worth taking the risk. Typicall I might have something like this: 10 positions 2 wins I'm trailing (> 5R) 3 little wins trying (2.5-4.5R) 5 positions around my entry (between -1R and 2.5R) I rarely see red in my accounts, losers go quite fast. So mostly I look at positions in the green. It has the benefit of feeling good. Losers hold losers, that simple. Individual positions are very volatile, I might see a currency pair have a drastic move against me and crush my soul, but then I log in my accounts and I see my overall profits have not moved much, while the 1 pair was crashing 3 other ones sligthly went up. So it makes it more of a slow and steady growth rather than some hysterical bipolar game.
Education
by MrRenev
3
What happens at each stage of the market cycle?This picture is of vital importance. It's something that you simply have to try to recognise when trading, whether you're multi asset, trading only crypto, FX, equities - it simply doesn't matter, since sentiment is indiscriminate and uncaring as to your asset class. In each section, we've got what is occurring at each stage. 1) Risk off. 2) The start of the crisis management 3) Risk on 4) Caution On the right hand side of each diagram shows what generally is bought during these periods, and how your portfolio *could* be constructed. And at the bottom, is what is generally sold off. What we always have to remember is this... 'How do we optimally construct our trade ideas/portfolio to make best use of the current market condition?' A trade that you think should come off under one market condition (especially if you're technicals focused) might not work, since the market context doesn't support the trade's success. Key to this is understand the beta of different asset classes to. Let's take FX. AUD, GBP, CAD and emerging market currencies are all high beta. Here's the equation to work out beta of say, EURUSD... Beta (EURUSD) = StdDev (EURUSD) / StdDev (market average) This implies that they move pretty heavily in line with risk sentiment and probably have outsized returns relative to the average. Countering this, EUR and JPY tend to be pretty low beta, predominantly due to their respective central bank policies. Being long AUD on a return to caution (as I believe we are in now, for example, on a technicals basis would probably be the incorrect thing to do. Priming yourself not necessarily to forecast, but to get to grips with where we are now and whether anything can change based on certain factors is absolutely vital. Thanks for reading, and let me know in the comments if you would like a full image of this!
BITSTAMP:BTCUSDEducation
by FinkPro
3
Visualizing Risk ManagementI would like to save people from getting burned so after 3.5 years of being in this space here is my advice: 1. It is easy to fall in love with an investment, especially when you believe it could make you rich. Have belief, but don't be blinded by it. Consider that you could be wrong, late, or even too early. 2. Price can remain irrational longer than you can stay solvent. Getting chopped up in the range will dwindle your capital that can be very hard to recover. 3. If everyone knows it, the market will no longer follow that path. The moment you determine a certainty is the moment you're destined to learn some lesson. 4. Doing nothing is hard. It feels good to be all-in, but this pushes emotions to the brink for new investors that can't stop looking at the screens. Trading/investing can be as simple as drawing one horizontal line on a chart. Price goes above and you're in. Below and you're out. Numbers don't lie. Develop a plan and cut the emotion.
Education
by Bohrbtc
AudCad ready to sink further... Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
Short
by Shadowing_The_Big_Boys
GJ to take a turn from here?Watch for turning here...not just for GJ but other crosses like AJ and Cadj Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
by Shadowing_The_Big_Boys
A resistance tough to overcome? GBPUSD might turn lower... Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
Short
by Shadowing_The_Big_Boys
USD will push up higher? Still looking good for upside... Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
TVC:DXYLong
by Shadowing_The_Big_Boys
Macro Perspective - TechnologyAn increasing level of concern is rising within the Bond, Equity and Real Estate Complexes or Markets. I prefer Complex as each "Market" has a number of entities using their control mechanisms. The Equity Complex has a number of headwinds approaching for Technology (NQ). Yields, specifically the 10Yr Treasury Note has been a reliable Instrument for an Inverse or Negative Correlation. 10Yr Yields rose Friday 4.6% In addition, we want to observe the Long End of the Yield Curve flattening - this is a warning sign, one which proceeds corrections. Technically, the most recent reversal has seen poor breadth within NQ. The majority of the rise have been driven by the usual narrow Big Cap, heaviest weighted Equities. AAPL, GOOG, AMZN, FB, MSFT - NVDA provided most of the gains for Index. Unusual option activity has been on the rise as well, favoring large and often extreme positions for downside. One Trade amounted to $40Million in QQQ 340 Puts. The NQ has repeatedly created a large squeeze prior to a reversal, the last thrust higher pushed up 500 points late in the day only to collapse the following day, giving up all of its gains. IMHO, something is brewing which will be extremely bad for the NQ. There are a number of vectors for it see a large correction. Earnings will be led by share buy backs, Co2 Credits and a host of other accounting manifestations, but Gross Revenues should be less than optimal for a sustained uptrend. The "Delta" variant may encourage some traders to position for increasing "growth" initially - this is not March of 2020. Taiwan is at risk on a number of fronts. This would clearly be a large negative for Semiconductors. I do believe this will play out as there is an increasing number of large entities seeking to follow Apple's lead with their RISC Architecture and begin using their own Chipset Designs and Architecture. MSFT announced this some time ago. Google continues to reduce MSFT Office's market share with Google Docs. Windows 11 is a clear signal MSFT is changing their strategy after having announcing Win 10 was it. The concentration of Chip/Chipset fabrication in Taiwan presents an imbalance globally and with it the attendant risks. China is one, Water is another and there are a more. Japan has recently sworn to defend Taiwan as they are wholly dependent on Semiconductors for almost everything they manufacture. The US has conducted multiple Naval exercises in the South China Sea for years. IS something brewing there? I do not know, but do believe there is an inherent risk well advanced with respect to Taiwan. There is little the US can do to prevent China taking back Taiwan IMHO. I favor a Geopolitical Event inducing this correction, one that occurs after hours during GLOBEX and not RTH. Europe is well advanced in declining Economic activity. The pace of Economic growth in China has slowed. The US reopening trade has been one of confusion, mistrust and one foot our the door. If traders review Samsung in 2019 and their decline in Gross Revenues, we are witnessing the same event spreading once again. Inflation changes purchasing decisions, substitution effects begin to take place. There is much more, but I will condense this in now: I expect Tech to see a large correction later this month. I expect a number of Monthly Red Bars for a number of Indices. I will discuss the ES YM RTY and Bonds in upcoming posts. I do believe the Russell 2000 and tech will lead the Indices down soon. Perhaps August - November contracts will serve us well. Given the large ranges, using Micro Contracts for Inverse Ladders would be a wise choice. The VXN should be monitored closely, it has worked well. We will see how hard this can be pushed prior to a large reversal. The VIX has not been as correlated to the NQ as the VXN and 10Yr Yields. Good Trading Everyone - more to follow as we are approaching highs in everything, although the YM won't likely peak until August.
NASDAQ:AAPL
by HK_L61
2
Is this a breakdown or a meltup?The choice is yours - you can see it any way you like. The technical features here are: 1. Reducing peaks of squeeze momentum. 2. Recent RSI is below 50. 3. Rejection of 4H ATR line. 4. Large area of consolidation. Caution: none of the above means that price has to crash. Just to be clear - price could well go to the moon. The technical situation in my assessment (at this time) means greater probability for the south. Probability estimates do not predict how far a movement may go. This is a set up for a trend-following scenario i.e. high risk to high gain. High risk means high probability of big losses, if you don't know what you're doing if you short this. Following a trend south means finding a suitable trend that is below the 4H time frame. There is no magic formula to work that out. Disclaimer: This is not advice or encouragement to trade securities or any asset class. This is not investment advice. Chart positions shown are not suggestions intended to assure you of an advantage. No predictions and no guarantees are supplied or implied. The author trades mostly trend following set ups which has a low win rate of approximately 40%. Heavy losses can be expected if trading live accounts or investing in any asset class. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
A
by Captain_Walker
Most Valuable StockApple is the most valuable publicly traded company ($2.37T) behind Saudi Aramco. This title has been rightfully earned as the company continues to deliver in customer loyalty, growing services business, and continued product development pipeline. This stock has continuously made all-time highs since its inception and is currently within 1% of its all-time high of $143.15. Technically, there are three indicators that show favorable future price action. 1) The company is not in an overbought condition according to the MACD. 2) The company has tested its previous resistance of low $140s multiple times. 3) The company Price-to-Earning ratio has consolidated as earnings have risen in the past couple of months Furthermore, as interest rates have been low this company is a safe bet to outperform due to its historical growth. This provides a sense of risk-free return, a great hedge in the current high-valued market. Finally, there has been significant call buying recently further ratifying the potential for a breakout.
NASDAQ:AAPLLong
by howdydany