What you are describing is scaling in.---period.
Averaging IN (not Averaging Down)
- Thread starter Newc2
- Start date
Buy1Sell2, why don't you shorten your username to B1S2? And then it's only a stone's throw from BS, where it belongs. 
In your opinion, in my opinion thats trying to be accurate in the future far to much, which I tried to do for years, too many SL hits as it reverses which just demoralises the crap out of well me.
Moved to a more, direction is kinda up say, join direction, market dips lower but doesnt change direction, then get more less cost to exit point and more upside possibility compared to trade 1.
Then on direction change i look to exit and flip sides where I'd be looking to get in short, so a good price rather than worst case.
High speed moves against, hit exit asap, let high speed moves with run and over all still in profit
This is complete nonsense. You're presuming to know exactly what a given instrument is going to do when you enter your "full position." This might blow your mind, but people averaging in or adding to trades that are proving themselves are *also* using stops. Your hardliner methodology disposes of any dynamic analysis and just presumes to be either right or wrong. Might as well simply flip coins.
But if you understand anything about risk management (which you've claimed to in the past) you'd understand that it's all about controlling potential losses and balancing potential reward against information risk. You're entirely focusing on what profit one would have on a successful trade at full size and completely ignoring losses on your "I know I'm right, so here's 100% size" entries when they don't work out.
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Hi.
When has a position reached maturity?
I've been putting all kind of figures into a spreadsheet and it seems results highly dependent on where one is scaling in and what they are risking on each position.
Maybe averaging in when a move appear to have just started offers the best of both worlds.
If you're wrong, you're wrong quickly and can move on without much frustration.
Common sense can be wrong? Not too long ago common sense said the earth was flat and the sun rotated around the earth.
It would be nice if you can test your common sense with some data.
When your layer in and your first layer or two have made large profits, you can use your profits, not your principal, to build into a much larger position - a.k.a. the free ride - with a potential for a very large gain.
This is how that Japanese trader CIS made $34M shorting the Nikkei IN 2015, and how Soros made $1.2B breaking the pound.
These kind of trades are ideal for winners making parabolic moves with a holding time frame typically lasting a few weeks or sometimes months. I like to have my smallest size on on my losers and largest size on my winners.
This is how that Japanese trader CIS made $34M shorting the Nikkei IN 2015, and how Soros made $1.2B breaking the pound.
These kind of trades are ideal for winners making parabolic moves with a holding time frame typically lasting a few weeks or sometimes months. I like to have my smallest size on on my losers and largest size on my winners.
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Averaging in begets averaging out. Winning trades will not gain their full potential. The best traders have conviction to have their full position on at the outset and remove the entire position at the end.
Thats an opinion what works for you doesn't work for me and others I'm sure.