The Black Swan Experiment -
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thread: The Black Swan Experiment

  1. #11
    Completely lost my guts on USD/CHF. Jumped in for a scalp long at approximately 8:40 EST.. Saw price move down harshly and made the call to get out at around -17 pips. My thinking was when that was getting me back to breakeven, I may as well just get out now since the hourly rate appeared like a major trend reversal in the creating (large engulfing candle).

    Of course, as fate would have it - I had been wrong and price taken back up again after I shut for a reduction. I would#8217;ve hit my goal had I just stayed the course.

    Trading this way is not for the faint of heart!

  2. #12
    I had been fortunate enough to have a 3 pip trade take off and become a 30 pip trade. Last couple trading days have been a little wild. Expecting to get back on a steady path from here on out

  3. #13
    I am aware the possible account-wiping trade is not an true black swan. A defining factor of a black swan is that it's surprising, which a loser in this case would not be too terribly unexpected.

    I just thought it made a cool title for the most part

  4. #14
    Senior Member Tataylo's Avatar
    435
    Per definition if you can blame a-priori a non-zero chance to an event it's not a black swan....
    Agreed; my definition of a black swan is substantially the same as yours. But for the sake of his experimentation the OP defines a black swan as One losing trade of 40-50 pips [that] will wipe out the account. FWIW I have edited my post read'your black swan' instead of'the black swan', because I was trying to go over on his terms, instead of mine, and this makes it clearer.

    Anyway, I do not feel that it is possible (especially without market analysis) to forecast when a 40-50 pip move is going to happen, hence (like I said previously) it merely comes down to how far the trader wants to push his luck.

  5. #15
    Really this is the experiment how I discovered to become profitable. Think beyond the box, turn it around and perhaps you will see how to grab the inevitable black swan. Good luck.

  6. #16
    quote They never wish to learn, do not know what 400$ is for you buddy but case that's a dinner in a fancy restaurant with your family. Do not throw us money that readily. The most important thing in gambling is protecting your funding. That said never, ever, ever, ever ,ever have a trade at which the risk is greater than your expected yield. Secondly rule never risk a considerable amount of your capital on a single trade.cheers
    I probably should#8217;ve made it clear in the beginning that this is not my principal method of trading. I'd expected that my designation of the as an #8220;experimentation #8221; would make that apparent. Therefore, the hard and fast rules that would be applicable to your principal account do not necessarily need to employ to the experimentation.... #8217;s the entire purpose of it being an experiment - to utilize an approach that's outside of your normal mode of operation.

  7. #17
    quote Certainly the only reasonable choice.... You discount you could lose far more than your balance with CFD contracts. If you're in the market with 500 leverage in case of a significant market event p.e. like the SNB occasion on Jan 2015 you have destroyed not your account, you'll owe the broker a lot of money, since you'll have a hudge negative balance. Forget about your stop loss, it will not work in this circumstance. Forget about garanteed stop loss or balance protection that is negative. No serious broker would provide such a thing in 500:1 Leverage,...
    They never want to learn, don't understand what 400$ is for you friend but either case that's a dinner in a fancy restaurant with your family. Don't throw us money that readily. The main thing in trading is currently protecting your capital. That being said never, ever, ever, ever , never,ever take a trade where the risk is significantly higher than your expected yield. Rule never risk a substantial amount of your capital on a

  8. #18
    ... unless it's possible to figure out the probability of this black swan happening...
    Per definition if you can attribute a-priori a non-zero chance to an event it's not a black swan. Thus a black swan event's likelihood is zero.
    It's only after it happened that it's considered a viable event. Only as soon as you have witnessed the black swan it's possible to correct your model. You can even include the possibility of blue or green swans. Your model will fail the day you encounter a four-winged swan. Occasion for which you didn't even consider attaching a chance to.

  9. #19
    Senior Member Tataylo's Avatar
    435
    how do you proceed?
    Without any market analysis, your mathematical expectancy is obviously zero without prices, regardless of what you do with all the cash in your account. Hence no one decision is better than any other, and unless you can calculate the likelihood of your black swan happening, it is simply an issue of just how far you are personally willing to push your fortune to reach whatever monetary goal you have in mind.

  10. #20
    quote Surely the only reasonable choice.... You completly ignore that you can lose a lot more than your balance with CFD contracts. If you are in the market with 500 leverage in case of a significant market event p.e. like the SNB event on Jan 2015 you've ruined not just your account, you'll owe the broker a lot of cash, because you will hav a hudge unfavorable balance. Forget your stop loss, it will not function in this circumstance. Forget about garanteed stop loss or adverse balance protection. No critical broker would provide such a thing at 500:1 Leverage,...
    Your input was duly noted.

    Moving on...

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