Average down - small wins, big losses?

  • Thread starter Thread starter Peblo
  • Start date Start date
Scataphagos said:
I'm not going to read the entire thread, but there is a famous picture of Paul Tudor Jones at his desk with a sign on the wall behind him. It reads, "Losers Average Into Losers".

If you don't understand what that means, you shouldn't be trading at all.
More...
Thanks for informing me. Good to know. Do you know where mr tudor is now?
 
"Whatever the majority of educators say do; then due diligence to do the exact opposite, at the right time of course" quote by ME
 
volpri said:
So one is long on bar 12. Keep buying bar 13, 14, 15, 16 adding to your losing position then ride the train loaded the rest of the way to the top until the fat girl sings. If you don't find that scaling into a losing position is palatable and compatible with your w.v. of risk then just take your position set your stop a couple of ticks below bar 8 and whistle dixie thru the drawdown...sweat a little.. then shout on the ride to the top.
More...
But but.. Everyone said scaling into or averaging down is a loser's game.
 
volpri said:
Look bean sprout that reversal you have explained .....well there is a simpler explanation.

The bar before it is simply a bear doji bar with a big tail on the bottom and big volume. That just means buying has come in. Chances are it wasn't selling or it would have likely closed low. Price has been first sideways at the top. Then we get an 8 bar tight bear micro channel with no PB's until the 9th bar which you have labeled "reversal". This bear micro channel has gaps galore all the way down (there is a gap between the low of each bar and the low Of the prev bar...also gaps between the close of a bar and the previous bar. Also gaps between the high of a bar and the low two bars back). All these gaps indicate urgency in selling. And most are made on increasing or relative high volume. There is a change in the the gaps when we hit bar 6 of the micro channel. Bars 6,7,8 all three have higher closes on their respective bars (and on high vol) than the closes on each of the first 5 bars (i.e. close location in terms of the range of the bar). This indicates buying coming in and a probable end to thee bear micro range. Probally the best the bears will get is a sideways range ( can be a small or big sideways movement. The idea is to wait for a BO of the sideways formation north or south and take a position. Or, if the sideways formation is big enough, in terms of range, scalp multiple times as the range evolves until the train leaves the station north or south then jump on board. In this case that would be bar 12 (counting from the first red bar of the micro range at the top). So one is long on bar 12. Keep buying bar 13, 14, 15, 16 adding to your losing position then ride the train loaded the rest of the way to the top until the fat girl sings. If you don't find that scaling into a losing position is palatable and compatible with your w.v. of risk then just take your position set your stop a couple of ticks below bar 8 and whistle dixie thru the drawdown...sweat a little.. then shout on the ride to the top.

If i had to draw all those lines and write all that text i would find the train has left the station without me while I am still talking to the pretty girl awaiting the arrival of her boyfriend who she introduced me to when the train first arrived. My fascination with the girl would cause me to not hear the conductors call for final departure. But then i have a one track mind. Too bad I am have missed the train. It too has a one track direction and I ain't on board. Worst of all, i don't get to hear the fat lady sing.
More...


Yeah, well, that girl in the train station after she ditched you approached me and chatting me up. After getting a text, her plans changed and she invited me to hangout.

I really didn’t have an interest in an imaginary girl but she was alluring and even mentioned she was dumping her boyfriend for missing his train.

I had to go, but only after she insisted on making plans and getting my digits.

She says, “I don’t understand. We just met. Why I’m so turned on around you!!? I don’t even know your name!”

I reply, “sorry, I don’t give out my name to pre-stalkers.”

Her, “Stop teasing me!”

After some playful banter, I relented,

“Some call me bean.

bean there, done that, got the t-shirt, and gave it to goodwill. Now go back to your boyfriend, I’m sure he’s a really nice guy, even though he misses the train sometimes, he’s just misunderstood.”
 
ironchef said:
But but.. Everyone said scaling into or averaging down is a loser's game.
More...

I personally know 2 persons who lost each over 10 million$ ( yes ten million dollars). One in futures S&P, and the other one in Forex. They were both "specialized" in averaging down.

The one in the S&P sold 210 contracts at 250$ a point at 495 in 1995. In 1994 he made more than 1 million profit. When things went wrong he waited till the market retraced and averaged down. But in 1995 it didn't retrace anymore at all. After lots of margin calls his account got wiped out completely. He was lucky because he still had some 3 million on another account that he used for living.

The second one got harmed with a position in Australian dollars that went wrong. The bank closed his position when his account was almost at zero. He was not so lucky, he lost all he had (inherited) and is selling textile now.

They both know what it means when they speak about "catching the mother of all losses".
 
Sprout said:
Yeah, well, that girl in the train station after she ditched you approached me and chatting me up. After getting a text, her plans changed and she invited me to hangout.

I really didn’t have an interest in an imaginary girl but she was alluring and even mentioned she was dumping her boyfriend for missing his train.

I had to go, but only after she insisted on making plans and getting my digits.

She says, “I don’t understand. We just met. Why I’m so turned on around you!!? I don’t even know your name!”

I reply, “sorry, I don’t give out my name to pre-stalkers.”

Her, “Stop teasing me!”

After some playful banter, I relented,

“Some call me bean.

bean there, done that, got the t-shirt, and gave it to goodwill. Now go back to your boyfriend, I’m sure he’s a really nice guy, even though he misses the train sometimes, he’s just misunderstood.”
More...
Ok bean. A Few live calls using the hersey bar method will clear anything up for the girls in question. The pretty one and the fat lady singing the last song of the concert.

Since you have bean there and done that should be old school for you. Next trading session might be a good time to demostrate for all the Elite and not so Elite traders.
 
You must log in or register to reply here.
Back
Top