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Break Even Trades
- Thread starter Lobster
- Start date
There are two themes on retracement:
1. It is an edge strategy for people who enter their first trades well after open (when retracement is occurring) to not have to deal with what they face up to that time each day.
2. It is easy money for people who make money using high daily money velocity trading themes that are comprehensive and not edge trading. What is call sytems trading here nowadays doesn't fit this description.
The 50% stuff is a myth used in 1. and not in 2.
1. It is an edge strategy for people who enter their first trades well after open (when retracement is occurring) to not have to deal with what they face up to that time each day.
2. It is easy money for people who make money using high daily money velocity trading themes that are comprehensive and not edge trading. What is call sytems trading here nowadays doesn't fit this description.
The 50% stuff is a myth used in 1. and not in 2.
Quote from Lobster:
Does anyone else think that the reason why 50% retracements are so common is that traders like to break even? They double down and exit at break-even.
How common are they? More common than, say, 38%, 62%, or 79%? Or even 25%, 33%, 67% or 75%? We all know prices retrace, but what makes you say 50% is so common?
50% retraces seem to be the most common...
in a similar thought, there's 4 types of trades (think of a 2x2 grid):
1. small wins
2. big wins
3: small stops
4. big stops
the trick is, just get #1, 2,3 and no #4s
or, think of small wins/stops as near-breakevens.. that leaves us with a goal of, work for large wins and no large stops... that's it.
ken
in a similar thought, there's 4 types of trades (think of a 2x2 grid):
1. small wins
2. big wins
3: small stops
4. big stops
the trick is, just get #1, 2,3 and no #4s
or, think of small wins/stops as near-breakevens.. that leaves us with a goal of, work for large wins and no large stops... that's it.
ken
Quote from Ken_DTU:
50% retraces seem to be the most common...
in a similar thought, there's 4 types of trades (think of a 2x2 grid):
1. small wins
2. big wins
3: small stops
4. big stops
the trick is, just get #1, 2,3 and no #4s
ken
A better trick is to get 1's and 2's and no 3's and 4's.