tue posted: Tue 2018-07-03 06:48:15 tags: n/a
Watched "Rememory" last night. It was a pretty deep and very entertaining flick, not one I would have chosen based on the cover and who the heck is Peter Dinklage again? Oh. That was Miss's pick. Before that I chose "Clear and Present Danger". Before that was "The Shape of Water", which reminded me by turns of "City of Lost Children", and "The Double" (movie adaptation of Dostoevsky's novella, starring Jesse Eisenberg).

Nearing the end of Burns's "Feeling Good Together". Something in the chapter on communication technique errors particularly clarified and validated my feeling that nobody really feels good about being told what they're feeling.

Related: this ChicagoNow blogger on over-anticipating other peoples' emotions, which becomes self-fulfilling.

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I didn't and admittedly still don't really understand forex trading - it seems more than half the time, the differentials just don't support meaningful intraday trading. Every trade entails bucking a commission percent; you don't get to freely pour your stake back and forth between currencies as their relative values jiggle a few tenths of a percent throughout the day. Apparently the way to get more out the money you can actually afford to risk is to use leverage.

The BabyPips.com "School of Pipsology" article series talks about not even opening an account without at least $1000 (micro account) or $10,000 (mini). They then talk about leverage in fantasy world terms of 100:1, when the leverage limit on U.S. trading accounts is 50:1 (for major currencies; 20:1 for more exotic currencies).

What this means in real-world terms is you can stake, say, $1000 to control a $50,000 position. If it gains half a percent and you close out your position, you get the $250 (less commission, of course). Half a percent is a noteworthy but not historic intraday swing. On the other hand, if it tanks hard and loses half a percent, there goes a quarter of your stake. And if it looks like it may lose 2% over a few super volatile days? You have a choice to either add funds and ride out a recovery, or eat the margin call and effectively lose your stake when the broker sells your position at your leverage limit. Smart traders use automatic stop orders to limit losses. If you're in danger of margin call, you're overleveraged.

So it's not smart to jump into trading with a $1000 stake and leverage it to the max on a $50K position. This is how noob traders lose their shirts. Oanda has a variable commission structure, so for this discussion I'll use TD's structure of 10 cents per 1,000 units ($1 minimum). So, to get your full dollar's worth, you'll want to trade positions of at least 10,000 units. If you fund an account with $1000, that's 10:1 leverage right there. Your first transaction will be to open a 10,000 unit position, costing $1. It would have to crash and lose 10% value to risk a margin call; not a likely scenario.

At .01% (1 "pip"), the differential in a currency pair doesn't have to move much to let you profit despite the drag of commission. The question becomes more, how much gain is a significant enough amount of money to make trading more attractive than taking a part-time job? Let's say I can consistently pick winning positions and gain a half percent per day on my $10,000 positions. That's $50 per day. If that takes me more than, say, 3 hours a day in front of my computer, watching market charts move, I'd be better off part-timing a second job.