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The CFD, the Cynic and the 600 dollars - What could possibly go wrong?

Discussion in 'Derivatives' started by cynic, Aug 31, 2016.

  1. cynic

    cynic Well-Known Member

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    http://www.aussiestockforums.com/forums/showthread.php?t=30891

    As some of you are already aware, I was fortunate enough to be honoured with the prize pursuant to the CMC reader survey hosted here at ASF.

    So, for the benefit of those that may be interested, and in recognition of the generosity of ASF and CMC, I decided to start this thread for the purpose of journalling the fate of the $600 dollar credit.

    As many of you will already be aware, I am usually slow to praise and quick to condemn. However, given that I do not wish to discourage CMC (or any other provider) from promoting themselves in a mutually beneficial manner (particularly one that offers benefit to ASF and its members), I intend to make a concerted effort to suppress any negative criticism that I might otherwise express.

    One thing that must be stressed at the outset, is that, whether or not, this foray proves profitable, won't necessarily reflect on the provider/broker!

    I put it to the readers, that if I cannot totally FTSE something up, then nobody can!

    Specific details regarding the instruments, quantities, and trading methods, will be purposely limited and/or totally omitted from this journal, as I do not wish to explicitly disclose my trading methodology.(The periodicity of reports on the account balance may also vary towards a similar end.) So this might, understandably, prove to be a very boring thread.

    One thing I will be particularly interested in identifying, is how long it takes for me to alter the account balance by a power of 2!
    And when I actually do so, whether the account will have halved to $300 or doubled to $1,200.(Those pondering the same might like to post in their best guess as to the where, when and what!)

    Today a number of orders were placed and some trades opened, and yet the account balance is somehow sitting right where it started. (I may have started out too conservatively!)

    Anyway, please stay tuned for more exciting developments!
     
  2. peter2

    peter2 Well-Known Member

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    I am very pleased to see you start a thread like this.

    Cynic. I'm going to say it's 50:50 to either target if you operate normally. If you're a bit more conservative than normal and I think you might have to be as there's not much for margin, then I'd say you're 80% chance to get to x2 first. I can't say 100% because your methodology can be severely stuffed by an unforeseen event, like the SNB unpegging the CHF, flash crashes etc. And you're going to try the FTSE, with which you have a passionate relationship. All the best.
     
  3. cynic

    cynic Well-Known Member

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    Funny you say that, because based upon the result of my first completed trade, it appears that I have somehow managed to open a position so incredibly small that the net profit upon completion was rounded down to zero cents!

    So, in the absence of of some obese waterfowl, of the black feathered variety, gracing the markets with their presence, this account ain't goin' anywhere unless I amplify my position sizes.

    Edit: Correction. I misunderstood the historical record! The trade is still open, but does appear to be having less than a cent of impact on the balance. I did say that if I cannot FTSE it up... didn't I?
     
  4. Modest

    Modest Well-Known Member

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    Awesome idea will be checking in daily cynic!
     
  5. cynic

    cynic Well-Known Member

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    With just a pencil and a pen, I figured it out!
    (Well, since you mention it, I suppose the computer did help also, but that's just a technicality!)

    https://m.youtube.com/watch?v=D_xSdoWt7v0
    And that's all achievable with just 7.5 cents!

    Given that the first realised profit was 8 cents, cynic's future regal lifestyle, is all but guaranteed!
     
  6. cynic

    cynic Well-Known Member

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    Well, after getting giddy with succes, it was time for some excess!

    After generating a massive 24 cents in realised profits, I turned to the market and...

    https://m.youtube.com/watch?v=sZrgxHvNNUc

    ...dramatically upped my position sizes!

    No prizes for guessing the outcome! Overnight the account went into drawdown and, at one point, the pnl was showing devastating unrealised losses (i.e. over $2!).

    Yes! It has indeed been the week of trading dangerously!

    Happily the positions have recovered significantly, and the overall account value is almost back to break even.

    It's a fortunate thing that I do not have a day job! Consequent to overconfidence in my trading prospects, I might otherwise have made the classic error of prematurely quitting it!
     
  7. peter2

    peter2 Well-Known Member

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    You're obviously not used to dealing in such small numbers.

    You might even have to consider "discretionary" trading if your main system can't operate with a low critical mass.
    Wouldn't that be a change.
     
  8. cynic

    cynic Well-Known Member

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    My first half dozen trades all achieved their profit targets and, due to rounding, had zero impact on the account balance.

    The last trade I opened was 600 times the size of the first!
     
  9. Wharris

    Wharris Active Member

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    You can do it Cynic! I have complete faith you will hunt the stops!
     
  10. cynic

    cynic Well-Known Member

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    Thanks for the encouragement, but if the account balance is any indication, your faith in me may prove to have been misplaced this time around! Time will tell of course! As it so typically does!

    I was on the wrong side of NFP last friday.

    Whoever it was, that coined the "trend is your friend" mantra, must have been the counterparty to traders like myself.

    There has most certainly been a trend in my unrealised losses this past week, and it is most decidedly not friendly!

    Open loss currently around the $25 mark!

    https://m.youtube.com/watch?v=OiV9Rk5SxKA
     
  11. Wharris

    Wharris Active Member

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    I've had a horrendous week to be honest, i guess i needed the reality check ha. I find the trend to sometimes be a wolf in sheeps clothing at times, depending on stop distance!
     
  12. cynic

    cynic Well-Known Member

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    It appears that the unrealised PNL has somehow transmuted from a downtrend into a consolidation pattern!

    The open losses are still hovering around the same horrific level($25ish), but with the added bonus of some humungous realised profits(i.e. $9.25), the cash balance has rocketed to the heavens (now $609.25) lifting the account value off its low. However, the overall account value is still $17 shy of break even.

    https://m.youtube.com/watch?v=YgI84Qxb7JM

    In order to properly capitalise on this recent (and sensational) outperformance of the markets, it is high time that operations were expanded!

    Stay tooned for further exciting developments!
     
  13. peter2

    peter2 Well-Known Member

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    Come on, cynic. Have a go. " .. let slip the dogs of war".
     
  14. cynic

    cynic Well-Known Member

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    Great idea!

    I did exactly that.

    Anyhow, the things we do...

    https://m.youtube.com/watch?v=mLXQltR7vUQ

    Realised profits now roughly equal to unrealised loss!

    Hold onto your hats folks! We are on our way to infinity and beyond!
     
  15. cynic

    cynic Well-Known Member

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    Well I hope you took my advice and held onto your hats!

    This past 24 hours witnessed some pretty wild gyrations in the account, partially exacerbated by a rather unfortunate SNAFU (Situation Normal - All FTSEd Up).

    I didn't realise that I had forgotten to do my daily order maintenance, until a minute after two old (and unintended) orders triggered sending my account value racing towards the dreaded $300.00 mark! It was a very close call! At one point I saw the account value hovering around the $320 level. What a day to make such a careless mistake!

    Fortunately the market absolved me of the SNAFU, when it later offered ample opportunity to exit the trades for a small profit, and the account is consequently $1.50 richer than it might otherwise have been.

    Anyway there's nothing more gorgeous than a...https://m.youtube.com/watch?v=fIiV4JATfoQ...except perhaps $127.26 profit!

    (Only another $472.74 to go before achieving the doubled account milestone!)
     
  16. peter2

    peter2 Well-Known Member

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    Don't tell me that you had open positions going into the FED news. That's crazy.

    I suppose you survived because you didn't have any exit stops in the market as well. Double trouble.

    Well it all worked out OK. A double negative isn't always positive.
     
  17. cynic

    cynic Well-Known Member

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    Okay then, as per your instructions, I won't tell you.

    At one point, the account went approximately 30% into profit, the cynic was proud, the stars were shining and the future was looking sweet.

    And then the answer (to the question posed within the thread title) gatecrashed the party!

    What a difference one day makes! From ...https://m.youtube.com/watch?v=-hqL4UfWRK8...in the blink of an eye!

    The original trading plan could not withstand the opposition posed by the market this day, and nothing short of cynical intervention could prevent an autoclosure of the open positions at horrendous losses.

    So the cynic did indeed intervene, with a deposit of additional funds, so that the deployments might continue, however, this action runs counter to the original intent.

    In other words the negative milestone was overreached (i.e. account more than halved!) and then some.
     
  18. cynic

    cynic Well-Known Member

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    Take 2!

    So with additional funds deployed, the question now becomes:

    "The CFD, the Cynic, the 600 (and then some) dollars - What could possibly go wrong?"

    I could set the power of 2 milestone again, but, been there, done that, and that milestone is sssoooo a fortnight ago!

    Boring!

    So instead I shall use the power of 3 milestone! That is, let's see if the 600 (and then some) dollars is tripled before being diminished to one third!

    Account value currently approximately 75% (was as low as 60%ish during last week's debacle).

    Stay tooned for more exciting developments!
     
  19. Gringotts Bank

    Gringotts Bank Well-Known Member

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    I'm tuned in, but I'm starting to think you might have had more fun blowing the $600 on a night out!
     
  20. cynic

    cynic Well-Known Member

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    Oh ye of little faith, what could possibly be more fun that getting FTSEed night after night by bourses all around the globe?

    Where are you going to find better value for your 600 (and then some) bucks?
     
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