Quote from gmst:
When you get such 1:10 risk reward kind of trend, in which some market event has the potential to move the market in one direction for next 10-15 days to next 3-6 months, its best to start small and keep adding everyday to your position, adjusting your stop.
Easier said then done though. Lots of patience, staying ability is needed. But rewards could be HUGE.
couldn't agree more except the part about the stop, that's a different matter.
start small build them up, when they get big take a profit keep on a small position and build it up again.
each time you start with a bigger cushion.
yeah, the last one is going to be a loser, but you have already made your money.
use size instead of a trailing stop. I think a mathmatician proved to me they are the same thing only size uses up more spreads and commissions, but size works better for me.
otherwise, a lot easier to add to winner on a pullback than to enter on a pullback
reward better be HUGE to pay for all the times it doesn't work out.
at anyrate, you are betting on the unlikely event something will trend (they say most of the time it chops) but I'll take those odds. You got a better idea?
the question is, now that everything is more and more connected, are things trending more or chopping more?
