If you can’t make it, don’t lose it!

Risk management becoming ever more important

Live to fight another day!

When we start trading if our first trade loses money it can be incredibly disheartening and as we tend to exist in a vacuum, not knowing where to turn for verification. It is even worse when our trading strategy has worked successfully in a dummy account.

A period of introspection often begins but this is not the time for throwing the baby out with the bath water. It is time to study what happened and tweak, if it worked in practice it will work in reality……. eventually.

Just ensure that you are managing risk correctly particularly position size and stop losses. When you tried your strategy in test mode were you realistic? Were your stop losses set at realistic levels that you would use in real life? If so, chin up and carry on. Don’t pressure yourself and if you are unfortunate enough to make another loss, maybe become a little more defensive and don’t get gung-ho about making the losses back or become aggressive.

Trading takes time, for a lot of us it is a totally new discipline but there are no “bogey-men” hiding trying to trip us deliberately nor is your broker (most likely FXPiG) anything other than 100% supportive. It is not a zero-sum relationship, so we are as happy that you make money as you are!

Hoist with his own petard

I had to google this expression to find out what it meant despite having used it many times. It applies perfectly to Bank of England Governor Mark Carney who allowed his colleagues on the Monetary Policy Committee to let the markets think that they were about to raise interest rates to combat inflation which ironically fell in March to its lowest level for a year.

That had a lot to do with the appreciation of the pound which was defying gravity considering the headwinds the UK was facing. And Mr. Carney was constantly biting his lip, itching to tell us what he really thought of the British Government’s handling of Brexit.

Eventually the Governor had to concede that it was all one big joke and the MPC weren’t in fact considering a hike at its May meeting, which incidentally took place this week.

When Carney came clean the pound plummeted making him no friends at all in the hedge fund community.

Even at the press conference that followed the decision, Carney, who is Canadian, took on a typically British position and blamed the weather. Maybe he got a call from Theresa May in which she told him “anything but Brexit”.

Buffet Buffeted

At the annual meeting of Berkshire Hathaway, the renowned investment vehicle of which the venerable Warren Buffett is CEO, he likened Bitcoin to rat poison.

That comment drew an incredibly venomous response from “crypto warriors” who don’t need the most famous investor in the world “dissing” their flagship product.

It must be remembered that by just about every measure or tool at his disposal, including his own intellect Bitcoin is just about un-valuable. He believes that the value of an asset should be determined by more than the owner’s ability to get someone to buy it at a higher price than he paid. Fair enough, but he is not interested in a new paradigm and has been wrong before most notably over Apple and Amazon.

Some of the comments on social media have been simply wrong. Opinions are like backsides, we all have one but that doesn’t mean they always need to be on display in public.

Obviously, those promoting Bitcoin for whatever reason and inflated by their own titles ranging from Bitcoin evangelist to Blockchain guru were stung into action.

The truth? Oh well that’s simple. If you have made one hundred and fifty billion dollars in the “traditional manner, what comes next is of little consequence!