ES Journal Archive (2011)
- Thread starter Buy1Sell2
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Quote from bigsnack:
Thanks for the encouragement. I hit my max daily loss limit once this week, which is the first time that's happened in a very long time. It rattled the heck out of me, so I'm feeling bitter
Your post made me feel a bit better. I've had a couple very rough days this month. Some self inflicted, others "what the hell was that" moments.
Can't complain about the daily ranges....remember 5 point range days not all that long ago?
Big Sky IPA it is!
Yes I will definitely take what we have now over that snoozefest that was December of last year. I think I gave up on the market at 7:15 PST for most of that month! For me I guess I've been suffering from a bit of complacency, and the market was so kind to remind me that I can't get that way. I had a trade where I missed my usual entry point, but came back to my desk and said "The market is DEFINITELY going to point X", so I just got in blindly. Well, we all know how that turned out
After that I revenged traded twice and then got the warning buzzer from Infinity. I'm glad I have the circuit breaker, otherwise who knows how that day could have gone!Maybe I do, maybe I don`t. Regardless of that, what I do know for a fact is that from a money management perspective, it is a bad practice because your losers will be on maximum size and unless you have a plan for adding to your winners, those will be on your minimum size. One could probably get away with averaging down if it is within a tight pre-defined zone and the trader have the discipline to adhere to his original plan, but we all know how tempting it can be to change the plan when what was not supposed to happen, in fact, happened. I know very well myself, because I blew 70% of my swing trade account in stocks back in the day that I had built to a respectable size by not averaging down. Why? Because I averaged down on a leveraged trade that I simply had no intention of turning into a loss. I puked at the bottom of course and then bought the new top in anger. One of many painful lessons.
From the perspective of trading technique and not just money management, I also think averaging down is something any trader who is not facing liquidity issues should consider improving. Why? I assume that any trader who likes to scale in still believes that his first unit will show him a profit on the next tick. If not, it does not make any sense to enter at that price, no?
Now, I assume that the averager reasons that his first unit is at a potential turning point, but that there is a possibility that price will trade X points higher/lower before turning and thus justifies his actions of adding to his loss. What I have a little hard time understanding is why the trader is not willing to scratch his first unit for a small loss and then re-initiate his position at the next zone after price puts in a bottom or top and validates his hypothesis. The trader can then add subsequent units when his first unit shows him that he was right in his analysis by showing him black ink. Alternatively, the trader could hold his first unit and then add the second after his first shows him profit or at least after the market has started moving in his direction, depending on the extent of the adverse movement.
When you are averaging against a market you are hoping and expecting and predicting that it will turn, instead of waiting for a bottom or top in the making and then start initiating your position. You are by definition trying to catch a falling knife and whatever the opposite saying would be for catching a top. A bad practice and only for those who know what they are doing, which again, is a dichotomy, because I guess if one knew what one were doing one would not face this issue.
I`m not a scaler myself at this point, but I think the subject is worth discussing and I may of course be wrong. I just find it curious that I never see anyone adding to a winner here. If so, I may have missed it and I apologize in advance. ES may be a market that is more forgiving than other markets with this technique, but I`m still not sure it is a good idea. Scaling into a winner is not always a good idea either, but it is preferred, IMO. The best is of course to wait for the right time to enter and then simply enter.
Good trading all.
I wonder how the results would change for "averagers" if they took stats on what percent of their trades did they actually have to average into. If the number was high, (say 70% or more) maybe their numbers would improve if they literally just skipped the first entry altogether, and instead chose to enter a double position at their second entry. I think it would be worth exploring at least.
This makes sense to me.Quote from Laissez Faire:
Maybe I do, maybe I don`t. Regardless of that, what I do know for a fact is that from a money management perspective, it is a bad practice because your losers will be on maximum size and unless you have a plan for adding to your winners, those will be on your minimum size. One could probably get away with averaging down if it is within a tight pre-defined zone and the trader have the discipline to adhere to his original plan, but we all know how tempting it can be to change the plan when what was not supposed to happen, in fact, happened. I know very well myself, because I blew 70% of my swing trade account in stocks back in the day that I had built to a respectable size by not averaging down. Why? Because I averaged down on a leveraged trade that I simply had no intention of turning into a loss. I puked at the bottom of course and then bought the new top in anger. One of many painful lessons.
From the perspective of trading technique and not just money management, I also think averaging down is something any trader who is not facing liquidity issues should consider improving. Why? I assume that any trader who likes to scale in still believes that his first unit will show him a profit on the next tick. If not, it does not make any sense to enter at that price, no?
Now, I assume that the averager reasons that his first unit is at a potential turning point, but that there is a possibility that price will trade X points higher/lower before turning and thus justifies his actions of adding to his loss. What I have a little hard time understanding is why the trader is not willing to scratch his first unit for a small loss and then re-initiate his position at the next zone after price puts in a bottom or top and validates his hypothesis. The trader can then add subsequent units when his first unit shows him that he was right in his analysis by showing him black ink. Alternatively, the trader could hold his first unit and then add the second after his first shows him profit or at least after the market has started moving in his direction, depending on the extent of the adverse movement.
When you are averaging against a market you are hoping and expecting and predicting that it will turn, instead of waiting for a bottom or top in the making and then start initiating your position. You are by definition trying to catch a falling knife and whatever the opposite saying would be for catching a top. A bad practice and only for those who know what they are doing, which again, is a dichotomy, because I guess if one knew what one were doing one would not face this issue.
I`m not a scaler myself at this point, but I think the subject is worth discussing and I may of course be wrong. I just find it curious that I never see anyone adding to a winner here. If so, I may have missed it and I apologize in advance. ES may be a market that is more forgiving than other markets with this technique, but I`m still not sure it is a good idea. Scaling into a winner is not always a good idea either, but it is preferred, IMO. The best is of course to wait for the right time to enter and then simply enter.
Good trading all.
Anyways, setting up to go short at 1224.00. Hopefully it hits tonight. Gonna set my speakers on loud on my computer so that the sell order alert will wake me if I'm sleeping. Hopefully it works; all of it that is. Looking for a target around the 1190's.
Before I went to sleep early this morning I put an order to go short at 1220 and it worked. I woke up to some profits and got out at 1210 for a nice 10 points.
Before I went to sleep early this morning I put an order to go short at 1220 and it worked. I woke up to some profits and got out at 1210 for a nice 10 points.
You have a stop?
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