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Trade
The exit from the drawdown
On the forums you can often see threads in which the trader requests assistance from the experts, the withdrawal of accounts from drawdown. For example, it may be a situation that the speculator made a deal to buy a certain amount of a currency pair but the market went against the position. Then the person opens another trade in the same direction, thereby srednjaci. As a result of continued price movement in the direction opposite to the direction of the trades, goes to the Deposit of a significant open drawdown.
Speculators can begin to ask for help, and can put a lock transaction to freeze the situation on the Deposit until the moment when it is decided what to do next. Lock locking in any case remains, but because the speculator only postpones the time resolution of the situation for later.
Example out of a drawdown in Forex
Take for example some of the values, which later will have to come back. Let the trader's Deposit is 1000 USD, they opened two buy transactions for the same pair EUR/USD. The amount of each transaction is 0.1 lot (10,000 USD). Drawdown for one position is 50 points, that is -50 USD, but lost 100 points, that is -100 USD. Thus, while the balance is 1000 USD means a trader is only 850 USD. Both operations lakirovanie fully the other two positions the same amount for the same currency pair.
If close losses, the balance will be equal to the value of the funds and is 850 USD. Consider another option, when the poor man agreed to help professionals. In this case, not opening rokovogo castle (the same transaction for the purchase and sale opened at the same time called rokovym lock or locking of the locking), the specialist tries to make some action to make up for the loss, equal to $ 150.
For this, one can apply their methods of trading that use in their daily work. For example, he opened five successful transactions, the amount of profits which will reach +150 points. In this case, you can generally close all positions on the market, which will lead to the disappearance of the precipitate.
Because the lock stuck a loss equal to 150 points, and the new position brought a profit of the same magnitude, then, fixing the profits and losses derived zero. But the question remains, what are we in this example have seen really? Done remedy the situation, the professional is only carried out their normal trading activities which ended with a profit. Now consider a second example that should show us the same situation from a different angle.
An example of fixing the damages
Let the professional is taken for the correction of the mistakes made on the account, but before you begin to trade, he closes the deal castle. In this case, the fixation losses and the balance of the Deposit will be equal $ 850. Open transactions is no longer at all. Further, as we recall, he made five deals, which in no way depended on the already open positions of the owner of the capital. Similarly, gaining them a total of 150 USD, experienced professional closes their achievements.
As a result, we see that the balance in the same way as in the first example was back around $ 1,000. It turns out that the expert did not actually fix the situation, but simply operated as it usually does.
Asking someone to correct a bad situation on the account, we ask it to trade on our Deposit. The fix is only in the fact that we already (!) until this moment lost part of the funds, and who with their professionalism helped us get them back.
Losses and drawdown in the trade
Does not exist, as such, "razrulivaniye" of the situation, because you need not look for the value of the balance at the time of drawdown, and amount. It is so much money ALREADY on the account, as we see in the media.
The fact that the balance remains unchanged is just a formality. For example, if asked to help on accounts where it was 3000 USD, and at the moment left for balance as 3000, but only 800 USD, then we are invited to work virtually in the Deposit of 800 USD. The owner says that he account for 3,000, but he in the loss of up to $ 800, he lost 2200 do not belong.
In fact, he's now 800 USD. Return the previous value of the funds, it's like that with a new Deposit of $ 800 to make capital 3000 USD. In other words, the trader asks him to earn 800 USD 2,200 dollar, calling the whole procedure to exit from drawdown. The traders, who was involved in a serious drawdown we can recommend the following:
• If a trading system is well tested, and the test results of the speculator satisfied, then the best options out of the current market situation is the closure of problematic orders. After fixation losses should continue in the same direction as before.
• If the trading system is now in doubt, you should do it upgrade or developing a new algorithm.
Since no special measures to exit from the drawdown does not exist, further action will be confined to the same trade. A trader can see what his strategy has weaknesses and try to fix them, but to find a way out of the losses differs from the standard trading actions on the market, most likely, will not work.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 372
| Rating: 0.0/0 |
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