Add the losers

[trader1974]

Well actually I'm starting to see it now. I win every day for 2 weeks or three but finally a big losing day always comes, it's just a matter of time.
That's why adding losers fools you because you end up with more positive days but in return you get a great loser day from time to time.
It is difficult to realize this until you have gone through this cycle several times.
Although I end many days in positive I am still learning.

 

[trader1974]

The advantage must be because you win more times than you lose Winning by adding losers is like wanting to win a game by cheating.

 

[trader1974]

Letting the stop jump also has another positive thing. If you are clear that you will let the stop jump then you will try to make your entry the best possible.
There is no catch here.
If your ticket is not good, then you know you are going to pay for it.
That in the end is good for you. You have to try harder but you will get the reward.

 

[comagnum]

Every day I know that no matter how patient I am & how much I scrutinize each trade I will be wrong approx 4-5 times out of ten & that a well placed stop less is the best trade there is. Your first loss is the best loss!

I also know the best trades will run hard right out of the gate. On these trades I scale in rapidly, peeling of some profit as it goes in my favor while leaving at least a third of the position on to run with a stop above break-even - a free ride.

Averaging losers is the smack/crack in trading, it's far better to spend our mental energy managing winners, we do this by cutting losers fast & furiously.

 

[Slope Trader]

Many times it works out but I don't think it's the right way.
Any suggestion?

-

Trader1974,

As I believe Overnight was suggesting earlier, be sure to check out Volpri's journal. He uses an approach involving price action and scaling in/averaging down once he is into trades that is very interesting.

 

[pinabetal]

The right way to trade is not to add to losers, but instead reverse and go short.

Investing, especially buy and hold, is a whole other story.

Too often some comment about something totally unrelated to trading because they don't trade or just don't get the concept itself.

Try reversing and going short near the bottom of a TR and ole mister whipsaw will likely pay you a visit.

 

[trader1974]

I have read it.
He also talks about doubling down after a loss. Another bad habit in my opinion.
When we are enraged because we have lost, we forget that if we make a revenge trade by doubling positions, we are actually also doubling the risk if we fail again.
So if you fail what will you do, triple positions?
As I said I think it is better to spend your energy in finding the best possible entrance.
When you add losers or double down after a loss, you are not really cheating the market.
You are deluding yourself because you do not accept defeat.

 

[pinabetal]

I have read it.
He also talks about doubling down after a loss. Another bad habit in my opinion.
When we are enraged because we have lost, we forget that if we make a revenge trade by doubling positions, we are actually also doubling the risk if we fail again.
So if you fail what will you do, triple positions?
As I said I think it is better to spend your energy in finding the best possible entrance.
When you add losers or double down after a loss, you are not really cheating the market.
You are deluding yourself because you do not accept defeat.

Are yu saying it doesn’t make sense if yu are wrong to exit then reverse and trade double amount? What about if yu are wrong just take the loss and reverse directions without doubling up like suntrader says above? Also do yu have be enraged to do such a thing? Couldn’t it simply be a part of your strategy?

 

[trader1974]

Also do yu have be enraged to do such a thing?

Adding in losers and doubling down after a loss has not worked for me. In my opinion, it creates a false sense of consistency.

 

[steve2222]

You can try to convince me. I'm always willing to listen. Who would that trader be?

Because I sure don't know of one(1).

I know it is in another forum, but follow Brixen here https://www.forexfactory.com/thread/1028145-dax-futures-december-2020.

Adding to losers is his whole strategy.

He creates a new thread for every DAX contract (3 monthly). He has been applying this strategy consistently for at least 3 years, but he is well capitalized and knows how to work himself out of a whole - just look at Thursday's posts this week when DAX shat itself and was down over 3% at one point while Brixen had positioned himself Long!