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| Subject: | GBP/USD trade |
| Posted by: | Reinhard Schu ( C2 Score: 958 ) |
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| When: | 7/17/07 (12:55) | |
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| | I am getting a little frustrated with what is now going to be the second large (200 pip) loss within a short space of time, again wiping out most of the profits of the past two weeks.
There will always be profitable trades and losers, I have no gripe with that, but on this particular trade, the losses seem avoidable.
So, I have a few queries:
1. Why did the system hold the position into a price sensitive news event (here: UK CPI & RPI figures)? Holding a position into scheduled price sensitive announcements amounts to nothing more than gambling on the outcome of the event.
2. When the UK inflation figures came out, they turned out to be "surprisingly" high, hence the pound jumped. Why not, when one finds oneself on the wrong side of the trade as news comes out, just quickly close the position and cut the loss rather than letting it run, as happened today? It seems even more strange that the system let the loser run (GBP/USD), but took profit too early on the hedging position (GBP/JPY).
I am not trying to attack to you. The system still has an excellent overall record, but this 200pip loss in particular seems avoidable. Holding into a news event is generally a bad idea, and I would like to know why the system did that.
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| Subject: | GBP/USD trade |
| Posted by: | Username ( C2 Score: 263) |
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| When: | 7/17/07 (14:11) | |
| Systems: | (26227726), (52547431), (22698817), (22808053), (26281366), (26352273), (31603478), (45779563), (46518146), (47450233), (54347539), (64359398) |
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| | In response to post by Reinhard Schu of 7/17/07 (12:55) I am getting a little frustrated with what is now going to be the second large (200 pip) loss within a short space of time, again wiping out most of the profits of the past two weeks....
See entire
I normally wouldn't dignify such an asinine post with a response and I sincerely hope the system vendor doesn't as I suspect he may be unwilling to upset a subscriber so may be too kind, but someone needs to be frank with you so I will do it. (Perhaps this is a service vendors could offer to each other?!)
"1. Why did the system hold the position into a price sensitive news event (here: UK CPI & RPI figures)?
Why not? The system trades mostly G7 currencies, do you honestly think he's going to close all his positions before every single announcement for every relevant country in case it happens to move against him? Do you have any idea how many figures are released each week (including all the countries in the Euro) and how ridiculous your suggestion is? And what if it turned out to be news that was in his favour and you miss that 100bps jump? How would you react to that? The bottom line is no system can account for all announcements, they are the ongoing risk of markets. I assume you have not been trading for long, trust me in time you will learn that all news is noise. If you find that hard to believe and you think things like the Fed announcement or a jobs report number are important then look at any daily chart of whatever market over a 6 month period and see if you can tell me by looking at price alone what days the announcements took place. You won't be able to. Then look at the dates and work out where they were, how did it fit into the overall trend? Did it really make a difference? Did it mark the top, the bottom? No, and if you are trading a system over longer time periods than a few minutes then none of the announcements matter.
"Holding a position into scheduled price sensitive announcements amounts to nothing more than gambling on the outcome of the event."
Well if that's true what about unscheduled announcements? Aren't we gambling with those because we don't even know what those ones are about whereas at least with the scheduled ones we know it's about employment or inflation? Again this is all simply risk, the risk of being in the market in the first place, as long as you have stops in place and they're an invalidation of your reasons to hold the position why would what gets you there matter?
"2. When the UK inflation figures came out, they turned out to be "surprisingly" high, hence the pound jumped. Why not, when one finds oneself on the wrong side of the trade as news comes out, just quickly close the position and cut the loss rather than letting it run, as happened today? It seems even more strange that the system let the loser run (GBP/USD), but took profit too early on the hedging position (GBP/JPY). "
Presumably he hasn't exited it because it hasn't invalidated his reasons for entering it. Remember the context. You are looking at it in the context of one economic release, he is looking at it in the context of his trading system. As long as you are aware of the trading systems parameters, typical max drawdown etc, and everything is still within those parameters you really shouldn't have any issue at all on a trade by trade basis. |
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| Subject: | GBP/USD trade |
| Posted by: | Si Nguyen (Admin) ( C2 Score: 876) |
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| When: | 7/17/07 (15:02) | |
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| | In response to post by Reinhard Schu of 7/17/07 (12:55) I am getting a little frustrated with what is now going to be the second large (200 pip) loss within a short space of time, again wiping out most of the profits of the past two weeks....
See entire
Reinhard,
Perhaps Jon already said what I want to say. I am sure that there will be many 200 pips loss trades to come in the future but as long as the max drawdown of this system is less than 15% and the Compound Annual % is more than 150% I am happy with it.
If you don't like the performance of this system or can't take less than 15% drawdown, please unsubcribe.
Thanks!
Si Nguyen |
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| Subject: | GBP/USD trade |
| Posted by: | Index ( C2 Score: 975) |
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| When: | 7/17/07 (22:24) | |
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| | In response to post by Username of 7/17/07 (14:11) I normally wouldn't dignify such an asinine post with a response and I sincerely hope the system vendor doesn't as I suspect he may be unwilling to upset a subscriber so may be too kind, but someone needs to be frank with you so I will do it. (Perhaps this is a service vendors could offer to each other?!)
...
See entire
I think most systems ignore announcements, whether they trade forex, futures, or stocks... Too much overhead. You set your direction, and money management. It is subscriber's responsibility to manage their trades. |
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| Subject: | GBP/USD trade |
| Posted by: | Calvin Long |
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| When: | 7/18/07 (1:24) | |
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| | In response to post by Index of 7/17/07 (22:24) I think most systems ignore announcements, whether they trade forex, futures, or stocks... Too much overhead. You set ...
See entire
".....It is subscriber's responsibility to manage their trades."
It is usually true, but not for some subscribers here with the BulldogFX (AutoTrade). The subscriber's ability to manage their trades is very limited (total suspension only, no modification allowed). |
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| Subject: | GBP/USD trade |
| Posted by: | Reinhard Schu ( C2 Score: 958) |
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| When: | 7/18/07 (3:03) | |
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| | In response to post by Username of 7/17/07 (14:11) I normally wouldn't dignify such an asinine post with a response and I sincerely hope the system vendor doesn't as I suspect he may be unwilling to upset a subscriber so may be too kind, but someone needs to be frank with you so I will do it. (Perhaps this is a service vendors could offer to each other?!)
...
See entire
Thanks for your ridicule. Of course, I was not suggesting to pay attention to every single news event, but I remain of the opinion that CPI/RPI figures are a major news event if you have a position in that currency, and more importantly, if the trend starts going against you as a result of the figures, it may be better to reconsider your reasons for the trade and close or reverse.
"If you don't like the performance of this system or can't take less than 15% drawdown, please unsubcribe."
I can take a 15% drawdown and as I made clear, I like the performance of the system. I was just querying one particular trade and the reasons for remaining in the trade. I still believe there was no good reason for staying in the trade, but it's my own opinion which is ultimately irrelevant for this system. I have my own separate trading account for that. I won't bother you again with feedback. |
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| Subject: | GBP/USD trade |
| Posted by: | Si Nguyen (Admin) ( C2 Score: 876) |
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| When: | 7/18/07 (5:06) | |
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| | In response to post by Reinhard Schu of 7/18/07 (3:03) Thanks for your ridicule. Of course, I was not suggesting to pay attention to every single news event, but I remain of the opinion that CPI/RPI figures are a major news event if you have a position in that currency, and more importantly, if the trend starts going against you as a result of the figures, it may be better to reconsider your reasons for the trade and close or reverse....
See entire
Reinhard,
Thanks for clarifying! I am just a regular person so I do make mistakes from time to time. In fact, I can be wrong in two ways:
1) I can be wrong about the outcome of the data or
2) I can be right about the data, but the market does not go my way
Further more, I need to sleep and spend time with my family thus I can't monitor the market 24 hours/day and therefore I can't close some trades whenever I need to. However, I do trade this system on my own account and I also know that many people in here are using their hard earn money to follow my system therefore I take this business very serious and I am doing my best to keep the drawdown low while steady increase the equity of this system. Thanks for continue using my system!
Si Nguyen
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| Subject: | GBP/USD trade |
| Posted by: | Brad Goldman ( C2 Score: 958) |
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| When: | 7/18/07 (9:05) | |
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| | In response to post by Si Nguyen of 7/18/07 (5:06) Reinhard,
Thanks for clarifying! I am just a regular person so I do make mistakes from time to time. In fact, I can be wrong in two ways:
...
See entire
As I noted before, slope of the curve is reflected by the fact that the vendor has a 200 pip stop loss. When I mentioned this before, the vendor said you need to study the market, and not have a 200 pip stop loss.
Well, I NEVER have a 200 stop loss. As noted my recent winning forex trades recently all had normal stop losses. I DON'T need your tricks to trade.
I am sure you will take my comments on this as me being critical of your system again. They were not the 1st time, and are not the 2nd time. I was pointing out that you use a large stop loss, and I was proven right. I am not saying your system is bad. If it continues to work over the year, then it is a good system. I am not subscribed to it, since I trust my own way of trading FOREX since I know I will not wake up some day with a 200 pip loss. |
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| Subject: | GBP/USD trade |
| Posted by: | Zsolt |
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| When: | 7/18/07 (9:25) | |
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| | In response to post by Reinhard Schu of 7/17/07 (12:55) I am getting a little frustrated with what is now going to be the second large (200 pip) loss within a short space of time, again wiping out most of the profits of the past two weeks....
See entire
I am extremely pleased to have VN FX as part of my portfolio. However if it were the only system in my portfolio, I would consider myself a fool.
Here endeth the lesson. |
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| Subject: | GBP/USD trade |
| Posted by: | Si Nguyen (Admin) ( C2 Score: 876) |
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| When: | 7/18/07 (10:22) | |
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| | In response to post by Brad Goldman of 7/18/07 (9:05) As I noted before, slope of the curve is reflected by the fact that the vendor has a 200 pip stop loss. When I mentioned this before, the vendor said you need to study the market, and not have a 200 pip stop loss....
See entire
@ Brad: There is a wise man saids something like this, "If you keep do what you are doing right now, you will keep getting what you've got."
There isn't much different between setting 67 pips stop loss with 100 lots trade (your system) and 200 pips stop loss with only 30 lots trade (my system). The different here is that your system have 36.12% Max Drawdown with only 50.4% Compound Annual Rate while my system have only 14.02% Max Drawdown with 244.5% Compound Annual Rate. Not to mention the # of visitors, subscribers, review starts, etc....
Keep enjoying your 36.12% Max Drawdown with only 50.4% Compound Annual Rate system and PLEASE don't subscribe to my system because I don't want to waste more time with subscribers who only see the negative parts in the picture instead of look at the whole picture.
@ Zsolt: Totally agree with you, If you read the description of my "VFC Hedge Basket" system, you know that I have more than 1 system in my portfolio. In fact, I use 3 systems (VN Forex Club, VFC Hedge Basket and the unpublished system "VFC Hedge Grids") in my own account and to managed accounts for my clients. |
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| Subject: | GBP/USD trade |
| Posted by: | Sam Cook ( C2 Score: 277) |
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| When: | 7/18/07 (12:52) | |
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| | In response to post by Reinhard Schu of 7/18/07 (3:03) Thanks for your ridicule. Of course, I was not suggesting to pay attention to every single news event, but I remain of the opinion that CPI/RPI figures are a major news event if you have a position in that currency, and more importantly, if the trend starts going against you as a result of the figures, it may be better to reconsider your reasons for the trade and close or reverse....
See entire
>but I remain of the opinion that CPI/RPI figures are a major news event if you have a position in that currency,
Doesn't the system description state the system is 70% fundamental?
I would expect a fundamentally based system to hold positions into
fundamental reports.
> and more importantly, if the trend starts going against you as a result of the figures, it may be better to reconsider your reasons for the trade and close or reverse.
Interesting advise from the vendor who let the following trade go against him for six weeks and nearly 10% on a cash basis.
STO 2 @QMN7 MINY CRUDE OIL 63.300 5/7/07 10:31
BTC 2 68.950 6/19/07 9:00 ($5,825) V.High ($5,650)
In another trade you risk $4000 to make $400. I would think you would have a much clearer view since you are living in a glass house. |
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| Subject: | GBP/USD trade |
| Posted by: | Reinhard Schu ( C2 Score: 958) |
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| When: | 7/19/07 (4:35) | |
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| | In response to post by Sam Cook of 7/18/07 (12:52) >but I remain of the opinion that CPI/RPI figures are a major news event if you have a position in that currency,
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See entire
"Interesting advise from the vendor who let the following trade go against him for six weeks and nearly 10% on a cash basis."
You cannot compare my system with FX trading. My system is stated to aim to extract profits from spreads and contango. Extracting contango involves holding the short position on the basis that the roll yield will exceed the price movement over time. It didn't work out for Crude Oil because the contango has disappeared, but that is a totally different issue to what I raised here.
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| Subject: | GBP/USD trade |
| Posted by: | Sam Cook ( C2 Score: 277) |
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| When: | 7/19/07 (10:36) | |
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| | In response to post by Reinhard Schu of 7/19/07 (4:35) "Interesting advise from the vendor who let the following trade go against him for six weeks and nearly 10% on a cash basis."
...
See entire
> You cannot compare my system with FX trading. My system is stated to aim to extract profits from spreads and contango.
Why is it different? FX *states* he trades fundamentals. He holds a position
into a fundamental report using an established and *previously stated* stop
loss. Why is that different than you holding a losing position that is clearly
going against you and your *stated aim* for six weeks? You could see you were wrong, why not get out? Isn't that your complaint with FX? According to you it was clear that he was wrong and he should have seen this and exited more quickly. You had days and weeks (not just hours) to see contango was wrong and yet you sat on your hands.
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