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i think it is helpful to distinguish between volatility and range. Range = how far price travels from high to low. Volatility = how much movement there is within that range; how much backing and filling etc. Range is very difficult to predict. Outsized range usually seems to be due to...

Your approach involves "predicting" too, does it not? Predicting that once price declines, it will rise again? Also in effect, predicting that price is more likely to decline substantially than it is to rise substantially from any given point (else why not use a large position size from the...

Not necessarily. The logic of trend following isn't so much "price is more likely to go up than down at this point" as it is, "if I'm right about the direction here, I will make more than I would lose if I'm wrong." With proper position sizing and trade management, a trend follower can make...

How is this different than assuming that just because price has gone down, it will then go back up?

In your backtesting, have you separated out shorts versus longs? If so, I'm curious how the performance compares.

If your account falls below $25K, you can still trade if you hold overnight. You may be hesitant to do so after your last overnight trade, but in my experience this is where the real money is made. To swing trade safely, you should avoid exposing yourself too heavily to any one stock. I'd...

There is no easy answer to this question, as no one really knows what the future holds. The best you can do perhaps is to increase position size when the market is showing characteristics that you associate with a bull market (low volatility, steady uptrend, etc.). This can be scary though as it...

Actually I think that this method is best suited to a bear market. This is because the initial position size is tiny and additional size is added only as the market drops. If the market just keeps going higher without a significant correction, there is never a chance to add enough size to...

I think the current trade you've got on is a good illustration of how this method is not particularly well suited to an uptrending market. You won't lose money trading this way in a bull market but you also won't get the chance to put on much size. Not intended as a criticism, just an...

Forgot one other point: 4. If you enter the trade initially with only a small portion of your capital, keeping some in reserves to add on dips, you will experience only a very small win if the trade moves in your favor quickly.

Equity markets have an upward bias over time. The strategy he's using is basically to take a long position and resolve not to close it unless / until it's profitable, and add to the position if it moves down. This strategy will generally work, with some caveats. 1. There's no telling how...

I have read several threads started by the OP and I know one of his consistent themes is that he cannot "predict direction." The subject of this thread suggests a deviation from that theme. If markets do indeed move differently when they're going down than when they're going up, then this...

Why did you decide to close half of the hedge today?

What is your general approach with regard to hedges? Do you have rules about when to place them and when to remove them?

The hard part about trading is that sometimes you'll find that a particular trading style works great, then all of a sudden it doesn't. A method that is developed in one market environment may not work at all in another. For example, you might find a strategy that is profitable because it...

There need to be more choices in the poll. Markets go up and down every day; there needs to be some kind of timeframe or limiting conditions. Will markets be higher in 30 years? Probably. In 6 months? Who knows. In two weeks? Depends (according to my "guesstimate") on whether today's lows...

Yes, it was a breakout system. Could be that the specific entry parameters they used (e.g., break of highest high of last 20 days or whatever) no longer work, but the general principle of adding to winners should still work if it ever did. That said, it would be tough psychologically to trade...

You might be interested in reading about the "Turtles" if you haven't already. This was a group of trend-following traders whose methods used to be secret but have now been revealed by at least one of the former turtles. Adding to winners was a key part of the turtle method, as I recall. They...

Are you still trading this method? Having any success?

This gets to the heart of the issue I think. If your goal is to avoid losses, then the system you've proposed will work (although whether it will generate enough return to offset the impact of inflation is another question). That's a separate question from whether this system could be counted...