Average down disaster
- Thread starter innovest_11
- Start date
I bought RMBS in the teens, averaged down at $ 8/sh, started scaling out at $ 14/sh, scaled out more at $ 18/sh, scaled out more back down at $ 13/sh.
Now, added back in at $ 11/sh, plan to average more in at $ 8/sh if it falls that far.
Now, added back in at $ 11/sh, plan to average more in at $ 8/sh if it falls that far.
i cannot believe it, just one fine day, that day when the index drop 300+ points 10/Feb, i average down AGAIN!!!
I lost $13k, i already told myself not to average down few months back!!! but then after that time, i never average down, but the habit of averaging down comes back slowly again after sometime, And now it hit me real hard!!!
Problem is sometime averaging down rewards me, that's why i keep using it back again everytime after a disaster
I'm in state of loss and half depression
I lost $13k, i already told myself not to average down few months back!!! but then after that time, i never average down, but the habit of averaging down comes back slowly again after sometime, And now it hit me real hard!!!
Problem is sometime averaging down rewards me, that's why i keep using it back again everytime after a disaster
I'm in state of loss and half depression
Averaging Down is an unavoidable disaster if the trader does not implement proper planning and preparation.
In addition, it requires extensive knowledge of the instrument, the proper instrument, price action and most important proper capitalization and initialization.
In the right hands with the right methods it's a very powerful money management technique.
Only those in the dark blow up with it. Sadly, the vast majority of the traders fit the "in the dark" profile.
Susana
In addition, it requires extensive knowledge of the instrument, the proper instrument, price action and most important proper capitalization and initialization.
In the right hands with the right methods it's a very powerful money management technique.
Only those in the dark blow up with it. Sadly, the vast majority of the traders fit the "in the dark" profile.
Susana
Quote from innovest_11:
i cannot believe it, just one fine day, that day when the index drop 300+ points 10/Feb, i average down AGAIN!!!
I lost $13k, i already told myself not to average down few months back!!! but then after that time, i never average down, but the habit of averaging down comes back slowly again after sometime, And now it hit me real hard!!!
Problem is sometime averaging down rewards me, that's why i keep using it back again everytime after a disaster
I'm in state of loss and half depression
Still doing the same mistake... Now, will this time be painfull enough to make you stop doing the same mistake over and over again or will we see you again in a month with a bigger loss and a true depression?
I think averaging down is like cheating on your trades.
If your entries were correct from the start, you wouldn't need to average down at all. Since your entries are probably off, you then "cheat" and start averaging down.
Most of the times, averaging down will reward you, this is why it's the most evil of all cheats. It's the DEVIL for me.
Instead of averaging down, you should seriously start to ask yourself why your entries are off and find a way to become more accurate.
Everybody is able to make money by averaging down when the market doesn't trend strong in one direction...eventually everybody will get bailed out at one point...problem is, those few rare days when the market never looks back, you'll get hit hard, real hard.
Stop averaging down and focus on why you need to average down in the first place.
If your entries were correct from the start, you wouldn't need to average down at all. Since your entries are probably off, you then "cheat" and start averaging down.
Most of the times, averaging down will reward you, this is why it's the most evil of all cheats. It's the DEVIL for me.
Instead of averaging down, you should seriously start to ask yourself why your entries are off and find a way to become more accurate.
Everybody is able to make money by averaging down when the market doesn't trend strong in one direction...eventually everybody will get bailed out at one point...problem is, those few rare days when the market never looks back, you'll get hit hard, real hard.
Stop averaging down and focus on why you need to average down in the first place.
Thanks for your comments, I'm relooking over my journal over and over again, some days i have been rewarded quite good, but it takes only 1 fine day, when i'm not on guard, the big wave just swallowed me without looking back, when i just cannot admit defeat, keep averaging down, sold out in the end 1 big loss, wiping out all my Jan and Feb profits, all gone down drain.
You are right, I think this time, I'll be having fear over averaging naturally
You are right, I think this time, I'll be having fear over averaging naturally
Look, I am not sure there actually is any trader in the world who is happy to take a loss...however, all good traders understand that losses are part of this business so we must accept them and move on.
There are different categories of traders: those who don't mind losing 40-45% of the times and make their money based on winners much bigger than losers, those who hate to lose and need a high accuracy rate, and those that fit in the middle.
There are different ways to skin a cat.
No matter what category you fit into, you'll have to accept losses at some point. Even a 90% accurate trader must take losses.
Hi everyone,
Just wanted to let everyone know, who is watching this thread, that my buy on large dips strategy, is doing very well. Currently investing in UWM (leveraged Russells), as I let my QLDs (leveraged Nasdaq 100) and SSOs (leveraged SP500) ride. I will be holding until UWMs double from here. I expect a spectacular year.
Rich