The hourly indicator Y long 2163 had finally cut loss and turn selling 2129 at 6pm close just now.
It is the 8th multiple losing trades accumulated 283 points of losses, and it is also the 2nd losing trade in December accumulated 36 points of losses.
Read back the previous 3 posts on Indicator Y in the right column, Learning Corner, readers traders should be able to understand now why there is a need to have high capital risk ratio of 5 times that we mentioned before starting on the hourly indicator Y write-ups. Based on the above accumulated losses, if a trader started trading from the beginning of the multiple losing trades, the trader will be out of business using too little margin to trade even just one lot.
We will continue update new posts to see how high will be the total accumulated losses in the multiple losing trades. Will it be over 283 points, will it be more than 8 multiple losing trades for the hourly indicator Y?
According to the trading guides, 5x capital risk ratio on cpo futures is RM20,000 to trade only ONE lot based on the margin of RM4,000 set by the Bursa Malaysia Derivatives, and the account will be having a balance of less than RM13,000 only now if a trader JUST started trading from the beginning of the multiple losing trades in early November incurring 283 points losses or RM7,075 excluding trading cost. The trader will have balance about RM8,000 to trade as a buffet zone which mean if there is a loss of another 300 points per contract, the trader will not be able to trade already due to short of margin to trade.
No doubt the total accumulated profit for the past 11 months is still enough to categorized as a good year for year 2014 (that is 830 points gross accumulated profit as at the last short 2129), it is seriously looked painful to encounter such a multiple losing trades issue.