Hi everyone,
Take a look at the 15m chart, draw a vertical line at 2008.06.25 14:15 and a horizontal line at 213.00 and you can see a distinguished pattern where price tends to be in the middle. Remember I also took a screenshot showing the same the first time a traded. Ref: #22
Now, if price goes all the way up I would lose $8k is I do not do anything but I have plenty of time. If it goes all the way down I make aprox. $20k. I do not need to place many pending orders. Things are under control so as to risk management. From now on all I have to do is to wait and place a few more pending orders in a way that I would end up making perhaps $1k in worst case scenario
This is how I control free margin and the account. People tend to think that I am going to keep adding pending orders, end up with no free margin and a big loss. That is because you have to practice a lot to really understand my system.
To the unaware person, this moment can look scary, a floating balance of -$40k but as you can see the price tends to be in the middle because that is where the most loss is in the floating balance but it has to go to the edge to close the orders and remember there is where I make the money. This is why I refer as to trapping the price. This is part of my money management and risk management skills. This is how you control the account.