Increasing Size During Drawdown

[kut2k2]

Quote from bone:

The problem with this strategy of adding to losers or increasing size during drawdowns is that the same trader, from what I have seen at least during my own career, doesn't add to winning positions or winning streaks with the same zeal and leverage.

That's not the only problem. The Kelly formula proves that you should decrease position size during a losing streak.

The OP is a gambler.

This is a trading forum, not a gambling forum.

Nuff said.

 

[Lord.Maushi]

Increasing size during drawdown is a recipe for disaster, should be avoided at all costs.

Risk management is paramount and this is the opposite of risk management, this is risk mismanagement.

 

[oldtime]

the original post was addressed more to mathematicians. I asked if anybody had run the numbers, not if losers had opinions

 

[Swan Noir]

We all ran the numbers. The vast majority of traders we know that do it blow up.

Quote from oldtime:

the original post was addressed more to mathematicians. I asked if anybody had run the numbers, not if losers had opinions

 

[Lord.Maushi]

Quote from oldtime:

the original post was addressed more to mathematicians. I asked if anybody had run the numbers, not if losers had opinions

Funny that you would need a mathematician to answer that question ?

Do you also hire a Chef to boil an egg?

 

[oldtime]

Quote from Swan Noir:

We all ran the numbers. The vast majority of traders we know that do it blow up.

I hear ya, This is a very old thread, but it keeps getting revived. It goes back to the old gamblers fallacy

if I bet on heads even money and after twenty tosses it comes up tails each time, should I increase my bet on heads?

 

[Ironplates]

Quote from oldtime:

Anybody ever fool around with increasing size after a drawdown, or for that matter decreasing size after unusual profitability.

The reason I ask is because I go through periods where I get stopped out so often and consistently that I think nobody can be this wrong for so long.

And sometimes everything is profitable and I think, enjoy it now because this can't last.

Increasing size after bad luck sort of has that Martingale feel to it which ususally means it works until you under estimate just how bad your luck can actually be.

luck is when opportunity and preparation meet.

adding more to the draw down does not address the real problem...the decision making process relative risk.

as JL once wrote, if you have multiple confirmations, go ALL IN.
This works....until it DOESN'T. Ha!

I recco you trade with 5% of your capital on most trades, and go big with some careful and prudent understanding.

Keep most of your capital out of brokerage.

 

[SimpleTrades]

Why does every gambler want to call a gambler a gambler?

 

[kut2k2]

Quote from oldtime:

the original post was addressed more to mathematicians. I asked if anybody had run the numbers, not if losers had opinions

Stop lying. You didn't ask crap about mathematics in the first post, you asked if anybody (else) had fooled around with doing the opposite of what both mathematics and common sense says you should do. Sounds like loser-speak to me.

 

[oldtime]

Quote from kut2k2:

Stop lying. You didn't ask crap about mathematics in the first post, you asked if anybody (else) had fooled around with doing the opposite of what both mathematics and common sense says you should do. Sounds like loser-speak to me.

whatever, it was years ago, if you want to read all pages somewhere that is what it got down to

but thanks for telling me what common sense says I should do, not much of an explanation, but I'll take your word for it. You sound like an expert mathematician.