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B4 The Bell Moonday October 4


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machine-

 

In the past, and correct me if I am wrong, I think you have mentioned that you use leverage sparingly in your fucutures trading. I think this is an important concept.? Limiting leverage increases your staying power when you are early.? (Not saying that you ARE early in this case. :lol:)? But I think it is certainly an important concept in managing risk.? Leverage can? make you rich, but it can also kill you first.

Rule #1 is to keep 30% of futures contract total value as cash margin in the account -- that's 4 or 5 times "minimum margin," which is really only a day-trading margin to protect the borker. (e.g., 100 oz. gold contract = $42,000 total value ==> maintain $12,600 margin against it)

 

Rule #2 is know when to violate Rule #1. :lol:

I am paying 100% for gold and silver contracts, although I have been using leverage occasionally for short periods of time on stock futures.

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machine-

 

In the past, and correct me if I am wrong, I think you have mentioned that you use leverage sparingly in your fucutures trading. I think this is an important concept.? Limiting leverage increases your staying power when you are early.? (Not saying that you ARE early in this case. :lol:)? But I think it is certainly an important concept in managing risk.? Leverage can? make you rich, but it can also kill you first.

Rule #1 is to keep 30% of futures contract total value as cash margin in the account -- that's 4 or 5 times "minimum margin," which is really only a day-trading margin to protect the borker. (e.g., 100 oz. gold contract = $42,000 total value ==> maintain $12,600 margin against it)

 

Rule #2 is know when to violate Rule #1. :lol:

I am paying 100% for gold and silver contracts, although I have been using leverage occasionally for short periods of time on stock futures.

That's very conservative, HB, and you will NEVER get a margin call that way.

 

Futures are "extremely risky" only for minimum margin players.

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Let me try to refresh a memory or two - The G7 was going to request (require) the United States to "devalue" the dollar by at least 20% and China was going to be rquired (requested) float the RMB.

 

On Thursday the dollar collapsed and all was joy. Today, neither of the above has taken place, and all of the currencies that were on a "moon shot" Thursday have roundtripped to where they started.

 

Just wondering if anyone else remembers any of this or did I just dream it?

 

Fade the conventional wisdom - you will be correct more often than not.

Just one day may not change the trend. Oil and NG production shortfalls and higher energy prices will lead to an explosive growth in the trade deficit the next few months. More dollar buyers will be needed than ever before.

 

I don't try tocall day today moves in the dollar. If you carefully read what I've said, I speculated that an agreement to revalue the RMB in 2005 would be reached. So far, I still think so.

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