CL Redux

There are always detractors, and rightly so. You can not believe something just because someone says it is true.

That said, I truly believe Anek is the real deal. Not so much from the threads here, as from daily interaction with him and a few others for a couple of years, usually for many hours after markets were closed. I certainly saw enough real time trading from him.

How to make $100K in a day? We saw Anek slowly increasing his # of contracts to the point he was not getting good fills in NQ and switched to ES. Do the math. If you can add to a position up to a total of 70 or 80 ES contracts on a good trend day, what do you get? A year or so in advance he gave us warning that he was quitting daytrading when he turned 40. last year. As far as I know he did that.

Not looking to start a discussion. I'll say no more on this.
 
Quote from Nexen:

Are you suggesting not to add to a winner on pullbacks but only at the broken breakout level via buy stop or short stop ?

If so, considering your realized is deep in the money, how much size are we talking about on the breakout add ?

Takes me by surprise because I was thinking only to add on pullbacks using isolated stops on every add-original piece.

Thanks for your input.
More...

I am only beginning this plan of adding to winners, so I don't have the "live" experience yet. I have manual back testing experience. My tactic of initiating on a pullback and adding on a breakout is one of many scaling tactics. If I get into a trend off an early reversal signal, and the reversal breakout confirmation move is strong, I think I'd consider holding through the pullbacks and adding at those points.

Size on breakouts is not a place I can yet provide feedback, because I've only traded 1 lot on breakouts, and have gotten significant slippage when the breakout is strong. BUT if you have a nice profit cushion from the initial position, and the trend is early or midstream (or ridiculous as in "There's no way this can go any higher/lower!"), I'm thinking size is the right thing to do. Some of these breakouts lately have run 50 ticks out of the gate.

Quote from BCE:

Along with everyone else, I've learned the hard way along the way that adding to a losing position, averaging into it, is almost always a mistake. Period. Your mind says something like, "Oh, this is going against me. But if I buy some more (or sell some more), my break even point will be better and then when it comes back here in a minute I'll make some good money." And that is a possibility. But what seems to happen more often is that the trade continues to go against you and now you're losing even more than you would have if you had maintained only your original position. Then maybe you say, "Shoot! I'll buy (or sell) a few more and average down a little more." But when it goes against you even more you're basically really screwed. And also maybe then the loss is so big you're unwilling to exit hoping it will somehow come back.
More...

I know there are counter-trend traders and faders who average down and make a great living trading. I find it too stressful and too dangerous when I have a small trading account and have to produce consistent significant returns off it.

This post pretty much sums it up for those who average down without a position size/risk management plan set in stone and known in advance.

The biggest problem is that MOST of the time you CAN average your way out of trouble, thereby having a 90% or better win rate which satisfies your ego because you're never wrong. This conditions you to believe that price always does a certain thing if you're patient enough.

Dejavu informed us not long ago that mathematically speaking price reverts to the 20-period moving average 100% of the time. I'm pretty sure it does because on every chart I've seen it does indeed.

But it's a MOVING average, and by the time price finally gets back to it, it may have moved very far from where it was when you first began fading what you calculated to be an "extreme", and by then you may be out of bullets and in deep trouble. I believe Dejavu had a 100% win rate for a few months and stopped posting the day we had a massive trend that ran all the way into the close. The moving average was well over a point from the initial signal to begin fading the first extreme move and the pullbacks were shallow. A trader who can't take a small loss because s/he conditioned to believe the 100% win rate will never fail as long as s/he keeps averaging, will suddenly have that day that wipes out weeks, months or years of profits. Read the story of Long Term Capital Management to find out how it can end for brilliant traders who thought they calculated 100% probability in their favor.
 
Think i will go long crude tomorrow...pretty good support at 87-88, and seems like there are some supply issues bubbling up.

I might get lazy and buy some USO calls, or i might pick up some contracts tonight. I wouldn't be shocked if it dropped further, but i like the R/R buying here with a stop at 87. Will be a swing trade rather than a scalp.
 
Quote from NoDoji:

I know there are counter-trend traders and faders who average down and make a great living trading. I find it too stressful and too dangerous when I have a small trading account and have to produce consistent significant returns off it.

This post pretty much sums it up for those who average down without a position size/risk management plan set in stone and known in advance.

The biggest problem is that MOST of the time you CAN average your way out of trouble, thereby having a 90% or better win rate which satisfies your ego because you're never wrong. This conditions you to believe that price always does a certain thing if you're patient enough.

Dejavu informed us not long ago that mathematically speaking price reverts to the 20-period moving average 100% of the time. I'm pretty sure it does because on every chart I've seen it does indeed.

But it's a MOVING average, and by the time price finally gets back to it, it may have moved very far from where it was when you first began fading what you calculated to be an "extreme", and by then you may be out of bullets and in deep trouble. I believe Dejavu had a 100% win rate for a few months and stopped posting the day we had a massive trend that ran all the way into the close. The moving average was well over a point from the initial signal to begin fading the first extreme move and the pullbacks were shallow. A trader who can't take a small loss because s/he conditioned to believe the 100% win rate will never fail as long as s/he keeps averaging, will suddenly have that day that wipes out weeks, months or years of profits. Read the story of Long Term Capital Management to find out how it can end for brilliant traders who thought they calculated 100% probability in their favor.
More...

Good post!!
 
Quote from HuggieBear:

went short at 89.30, just for a scalp...down trend is just too nice to pass up. stop at 89.50
More...


just closed at 89.50 for the loss....apparently i was down 70 ticks while i was making guacamole...stupid trade, lucky to get out at 20 ticks down


should have stuck with my original thesis...NOTE TO SELF, charts dont matter (enough) when there is a supply issue
 
You must log in or register to reply here.
Back
Top