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Webinar: Private Banker's Perspective on Risk Management Presentation
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
After multiple attempts by Big Mike, I've finally agreed to do a webinar which will be on the topic of risk management. With that being said, I thought I would look to collect potential talking points on this discussion. My goal is to tailor the presentation to what the majority on this forum is interested in. I could just do a high level presentation on risk management but I thought it would be more useful by gauging what everyone is most concerned with.
I would assume the context will be based around intra-day trading but I'm interested to see what are the main areas of interest in that regard. This thread will serve as a gauge and will allow for additional questions after the presentation so, please sound off your areas of interest/concern regarding risk management.
much a fan of your blog and analysis. not sure what a 'high end' presentation is, but for me, understanding what actually is at risk....physical, mental; and knowing that those things color my perception of the market.....so I guess learning how risk affects decision making and how to combat it and having a proper perspective of what exactly I'm risking (ie...if I risk 5%, 10%, 20% on each trade, how many losers would it take to bankrupt me)...
also, you may have insight into how the algo world adds potential risk to trading or holding leveraged instruments.
PB-
really looking forward to the webinar, thanks in advance! im interesting in scaling and stop management. how much do you take off at first scale, second etc and how do you manage the stop? do you leave it at the original placement the entire time or do you move it up after the second scale or??? is there a right answer as far as our own personal W/L ratios and expectancy? Also, I'm just interested in context in general, how do you prioritize it? I realize that itself is very contextual but maybe you could flesh it out. as a specific example, on tuesday oil opened at the very bottom of a maybe 5 day balance area (cant tell based on your chart) and below prior days low and you took a long on the open for a move back to balance. very interesting trade to me. i get the return to balance logic but was there something about the ON profile that gave extra confluence supporting a long? what was the best time to get long, right at the open with a stop below balance low or wait a bit to see if sellers would step in or wait until it was accepted into prior days range?
Im very excited to see this!I will offer my 2 cents....Anyone who has followed PB knows, that his entries are very specific, from a tactical perspective.Always looking at the big picture, Ben looks at areas of confluence within the context of the big picture.
Ive actually pondered this....I asume PB targets levels based on the developing value area,and uses the footprint to dial in his entry..
-lets assume that price reaches the level of interest, but the footprint is not giving the entry...do we wait, and perhaps pass on the entry?Also, and i suppose this will vary...regarding risk, is it a hard stop?does the stop relate to the swing ranges of the developing day?
When determining stop losses, weve all had the experience of placing a stop, and being taken out, only to see the trade work...then we wonder, was the entry good.....
Also, is the footprint the determining factor for each trade?
Going to be a webinar you have to watch a few times to dial in to @Private Bankers own language that he uses (IN BENS WORLD)........................not many of us simpletons will fully grasp what Bens has to say 1st time round
Cant wait
Ben has a habbit of chewing my brain apart
" I will follow my rules, I will take my stops, I will be disciplined and i will work with the market....NOT AGAINST IT! Professional mind control is the key"
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Thanks guys! Some great questions and I'll certainly put those into the presentation. We have some good time until the presentation date so, keep'em coming! BTW, you can call me Ben, you don't have to say PB .
@lsubeano, thanks! My reference to high level was in regards to just very general and not specific to anyone in particular. My thought is to really make this meaningful vs. just a bunch of cliché's about risk management and trading. Glad you asked though. I probably should have been a bit more specific.
@Profiler, great questions! I'll certainly answer those. As for the trade reference, that's a little unrelated to the topic so, I'll just answer that for you here.
The long in which you're referring to was based on the fact that Crude was in a balancing mode. We then opened at the lower extreme of that balance area and the clear thought is for price to move back to center which it did. Think of it as an auction between buyers and sellers. There was good acceptance in the middle of the profile. Buyers and sellers were happy to transact at that price. When price got to the upper end of the balance distribution, buyers began to lose interest and the same goes for the lower extreme. Sellers weren't interested in selling into those lower prices so they backed off. Eventually the context changes and we broke down out of that area with the big gap down on Friday.
Here's the chart I was referencing. I split out Wednesday's profile to see how price reacted to those levels. You can see how as price got higher, buyer interest faded. Then on Thursday, we opened up there and we saw the same reaction of lack of buyer interest at those higher levels. That's a heads up that context is changing which led to the break down on Friday.
@bobarian and @greenr, thanks guys! This will be a presentation solely based on risk not my trading method just to be clear but I can include examples as you mentioned here. Bob, great questions about the stops which I will certainly address.
1. Do you use a daily loss limit? What does that look like for you?
2. Do you use a "three strikes and you're out" (or something similar) to re-entering a specific trade idea?
3. How do you treat trade/risk management once an add has been placed on a position? I've heard you mention before you wouldn't allow a trade you added to turn into a loser. Is this a rule always followed or was that situation specific?
4. Have you ever gone through any time in your trading where you had struggles with risk management? Following your rules or anything along those lines? If so how did you deal with it and overcome your demons?
5. What does it typically take for a trade to become "invalidated" in your trading? Do you need to see immediate confirmation on the footprint/a level not get breached/a candle hold/etc?
6. I think it would help if you also spoke a bit about the balance of information vs price risk in your entries, as this is still along the lines of risk IMO. Where do you fall along the lines of this balance of confirming a valid entry vs getting in early/limiting in as price comes to you. I hope this question makes sense, ask if not.
