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Hi All:
In my early days of trading, after watching
T-bills trade on a clacker board every day in a $
500 - 700 daily range I decided I was ready to
start. My very first trade was buying T-Bills 10
min before Paul Volcker raised the Discount Rate.
I think it was 1981 when the rise in interest
rates started when t-bills ultimately went to 15%.
This might have been the first time the Fed acted
during the mkt instead of Friday after the close.
Obviously this was a strong signal to the market
and the market immediately locked limit down.
Needless to say I wasn't too thrilled - no I
didn't have a stop. The next day the mkt opened
limit down - no trade. I really was getting ill
now - but a back month was trading..One of my
trader buddies said spread it off- so I sold a dec
against my sept. About an hour later the market
rallied but I had locked in my loss right near the
bottom. So I messed up again.
This was a long time ago, and I went on to make
many other mistakes. I've also paid the price in
grain and currency spreads. You really can't
manage your risk too well (sure you can mix option
& futures - to hedge a bit - but you can easily
overleverage in spreads like old crop/new crop
beans or any currency spread because they trade
like outrights but they require half the margin .
As far as some kind of hedge goes Buying a
slightly out of the money put with good time value
against a long future might help, it works like a
50% stop - my experience is pick a place in the
market where you know you will be wrong, pay the
overhead if you are and move on to the next
opportunity.
I've trained myself to see loses as a cost of
production, overhead - it's like running any
business there are costs/expenses.
I don't know if this addressed your question - I
hope I understood it OK.
Regards to All,
Tom B
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