add to a losing positon

ElectricSavant · May 4, 2005

I sliced some of this...but I couldn't agree more.

Michael B.

Quote from FuturesTrader71:

The market is a statistically losing proposition, so you must come in and trade while being mindful of your downside risk.

Rather, your focus should be "how much should I risk for what I think I can make".

Good luck.

Quiet1 · May 5, 2005

Isn't the appropriate way to look at this to take into account the full universe of possible edges that match the formula:

%Win * $AveWin - %Loss*$AveLoss - Comms > 0

That's the only fixed rule a profitable trader needs to worry about. Everything else is hearsay.

Q1

Baruch · May 5, 2005

Quote from Urkel:

Rule #1 Never add to a loser.

Rule #2 You will break rule #1 until you lose a significant amount of money.

Only losers add to losers.

PitchBlack · May 5, 2005

Quote from Learner:

Please read my post again with a bit more care. Not just read my nickname. Do you know what is a RED postion? By reading your post (quoted above)I know that NOT ONLY YOUR SYSTEM IS BAD BUT ALSO YOUR STOP IS BAD.

Be honest to yourself.

I don't know what a RED postion is; but i do know what a red position is. When you have a red position you NEVER add to that position. A losing position is a RED position; if it would be a closed trade you wouldn't be able to add to that position. You can only add to an open position.

If your system is bad any kind of stop will fail. So your conclusion is wrong. Give me a explanation of how your stops work and i will give you entrypoints where your stop wil never work correctly.

First have a good system, and only secondly have a good stop. The way you use stops has to be based on the behavior of your system. You have to run calculations on your system to define your stop.

Conclusion:"Only losers add to losers."

As long as you don't understand what this means you will be never become and surely never stay consistently profitable.

Learner · May 5, 2005

Quote from spike500:

I don't know what a RED postion is; ....
........

spike500

Thank you so much 4 your advice. And don't change your nickname I will ask 4 your advice again in 2 years time. Don't want waste your time now.

Quote from Learner:

otherguy,

Your problem is you DID NOT KNOW it was a losing position NOT a natural position draw down then! (You knew it in a hindsight) until you can tell the diffs of a losing trade and draw down by noise you will keep adding to a losing position. One not so clever way to solve the problem is NEVER add anything to a RED position but leave it to your stop.

IMHO

BTW, I NEVER add to a RED position(one day i will do); Stop is part of my system.

The real good traders add to a RED position with confident and come out winner. It is part of their strategy. I am not up to that level yet.

Only you know if your "shoes" is comfortable or not 4 yourself.

Happy trading

bladerunner · May 5, 2005

trading always comes down to emotions of fear n greed.
that's why u have to always use stops/bracket orders.

ElectricSavant · May 5, 2005

All of you folks are writing cliches' and what you think sounds good...

It's all bullcrap...

I know for a fact several strategies imploring averaging down, pyramiding, breakouts, trading the trend...bla bla

Michael B.

illiquid · May 5, 2005

I never add to a losing position and always keep my stops in upon entry; however, I have no problem re-entering the position the instant my stops get hit if that's the trade I feel needs to be done. A waste of a commission+spread it may seem, but a far smaller price to pay in comparison to the alternatives.

PitchBlack · May 5, 2005

Quote from illiquid:

I never add to a losing position and always keep my stops in upon entry; however, I have no problem re-entering the position the instant my stops get hit if that's the trade I feel needs to be done. A waste of a commission+spread it may seem, but a far smaller price to pay in comparison to the alternatives.

That's indeed the way to go.
I hope Learner reads this posting and thinks about it.

Message for Learner:
I'm daytrading since 1990 and still survive. How many daytraders survive after 15 years of daytrading?
I never ever changed nor will change my nickname.

Choad · May 5, 2005

I probably should be clearer - I don't "add" to losing positions per se. My system takes trades when called for.

It buys and sells according to set parameters. It may take a new position on a stock that recently was a bad trade. No big deal. A trade's a trade and over time the profits out weigh the losses.

The main point is that I've found the most reliable trades to be at the edge of the fear/greed dimension. People sell when it's a bad idea, and they buy at unseemly times. I endevour to take advantage.

Good luck.

C.