ES Journal Archive (2011)

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Quote from Laissez Faire:

I am glad I don`t know how to average, because if I knew, I would have to unlearn that habit. If one can`t figure out the right entries, then one always have the choice to not enter in the first place. :)

Averaging a loser, i.e., selling a rising market or buying a falling market is ultimately a losing strategy. If not today, then tomorrow. Even if you are the house and can add to infinity against a strong directional movement, your small winner is still a loser compared to what could have been earned by being on the right side of the market, i.e., opportunity cost.

A thousand stops is obviously an exaggeration, but when entering around a reversal zone, one will not take that many stop outs and truth be told, a few stop outs on minimum size is not that painful, compared to getting stopped out at the turning point on maximum leverage. If the move have a good R/R to start with, one will quickly make back the losses and then some when one finally catches the move. There are different ways to work a turning point. One way would be to trail an order above/below the market.

I assume the correct way to average is within a tight predefined zone planned in advance and then taking the stop no matter what. It is still a flawed strategy, because one is setting oneself up to lose with maximum size and win with minimum size as the average averager usually scales out of his winners.

I wonder how high the win percentage needs to be in order to have positive expectancy with such a strategy? Cut your losses and ride your winners, not the other way around. :)

Good trading all. :)
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you are also scaling in and adding removing portions of the position,point i was making is that all those that don;t avg should not avg,nor should they advise/critique in same area...personally,my timing sucks,if i were a scalper,it would be death by a thousand cuts,so should i give up or adapt,just another of a 1000 ways to trade
 
seems euro correlation with ES has really reduced last few days. ES is dropping fast, but Euro not showing the usual drop. Under 'normal' conditions, Euro would have dropped 50-60 pips by now, its down just 15 pips today, since ES RTH open.

Something to take note of.

Edit: Euro is down 5 pips, typo earlier.
 
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