Is price movement really random and unpredictable?
- Thread starter schizo
- Start date
I did take one more trade. Entered long on BO bar 11:25 BO of what?
BO of previous bar
BO of EMA
BO of previous 16 bars
BO of top of channel.
Got greedy instead of exiting for a 1 point scalp on the same bar I held and had to double up averaging down on bar 11:40 MY SL is now long ways away below bar 10:30.
BO hold above top of EMA bar 11:55. I hold too.
I exit on bar 12 BE on 1st entry and print a goodly amount on second entry.
When you get greedy scalping sometimes you have to hold longer and through deeper PBs
It did BO above the bear channel as I mentioned earlier.
LESSON: Grab them profits when scalping!
I am finished for now. Gotta work on something else.
BO of previous bar
BO of EMA
BO of previous 16 bars
BO of top of channel.
Got greedy instead of exiting for a 1 point scalp on the same bar I held and had to double up averaging down on bar 11:40 MY SL is now long ways away below bar 10:30.
BO hold above top of EMA bar 11:55. I hold too.
I exit on bar 12 BE on 1st entry and print a goodly amount on second entry.
When you get greedy scalping sometimes you have to hold longer and through deeper PBs
It did BO above the bear channel as I mentioned earlier.
LESSON: Grab them profits when scalping!
I am finished for now. Gotta work on something else.
Good trading Volpri
I just wonder you as scalper, do you also trade with inverted risk reward ratio? I think you don't use fix stop, how do you manage your risk and drawdown trading with big stop?
I'm aware of all that, but that isn't what I'm talking about.
Most traders don't have brains that are wired to average-in and martingale, where you have a brain that is wired for and thrives on that type of trading. Your style of trading is simply outside the comfort zone of most traders.
And as far as knowing when your trade goes awry? A few years ago, when you were actively updating your journal, I remember you going long ES and it started to sell off. As I recall, ES dropped more than 40 points and, not only did you hold your long position, you averaged-in at various levels all the way down until it finally turned.
Okay, so you closed out with a profit, but that style of trading is abnormal.
No one but you would attempt such a thing. If anyone else even thought about trying that, their brain would short-circuit and they would've ended up in an institution. lolagreed, I used to trade like that, I could have no losing days for weeks, but next thing you know there's going a day that come and wipe away most of your profit and you spend another weeks to recover.I'm aware of all that, but that isn't what I'm talking about.
Most traders don't have brains that are wired to average-in and martingale, where you have a brain that is wired for and thrives on that type of trading. Your style of trading is simply outside the comfort zone of most traders.
And as far as knowing when your trade goes awry? A few years ago, when you were actively updating your journal, I remember you going long ES and it started to sell off. As I recall, ES dropped more than 40 points and, not only did you hold your long position, you averaged-in at various levels all the way down until it finally turned.
Okay, so you closed out with a profit, but that style of trading is abnormal.
Not saying average down don't work, but it tests your stress tolerance both mentally and finacially. I had yet to found a way to overcome that therefore I now day trade instead of scalping.
Using your example, if a trader double up his position size every 5 point against his original entry, he would have 256 lots when market is down 40 points. The market could bounce, and you could earn some money, but if it continue dropping and you get stopped out, there's no way you can comeback with such losses.
I must have been crazy that day! I don't remember that. That is certainly an abnormality to the way I trade. Are you sure I wasn't doing that to teach a lesson how such behavior is destructive? Sometimes I do such things that when teaching.I'm aware of all that, but that isn't what I'm talking about.
Most traders don't have brains that are wired to average-in and martingale, where you have a brain that is wired for and thrives on that type of trading. Your style of trading is simply outside the comfort zone of most traders.
And as far as knowing when your trade goes awry? A few years ago, when you were actively updating your journal, I remember you going long ES and it started to sell off. As I recall, ES dropped more than 40 points and, not only did you hold your long position, you averaged-in at various levels all the way down until it finally turned.
Okay, so you closed out with a profit, but that style of trading is abnormal.
If I did that then take a red marker and write on that post. DUMMY!
I think the key here is that volpri isn't blindly averaging down. I have studied his posts for years and in his journal, you will see several days where he had to flip his position 2-3 times. Each flip is based on a rational read of the market. Its of course possible for the market to keep doing the opposite, but I speak from experience when I say that each time I averaged into a position, it was clear that I was in panic mode, praying for a break-even exit when the market was clearly trending against my position.
It takes a certain kind of mindset to be able to flip on a dime and not worry about the losses suffered to that point and still be able to put on the next trade because its the proper trade.
I'm an old geezer, so my memory could be faulty, but I've had that stuck in my mind all this time.
I keep a wide hard stop in place for whatever, as some things are unknowable and cannot be factored in to a premise for taking a position. My Sls are PA stoplosses. Many times the initial SL is upside down in terms of R:R. But when the trade is over often times that reward to risk is erased out and replaced by what I call "actual risk" That is what I actually suffered in adverse movement against my position + 1 tick. When I then calculate my R:R based on my actual risk the R:R many times flips to the positive side by a decent amount.
Why do I use wider price action stops? Because bulls and bears push the market around until one side wins or a while and then the other side wins for a while. This probing around can create deeper PB and deeper DDs. I want my trade to have time to work without getting stopped out. Probing in the ES makes it extremely difficult to get entries with a tight SL that won't get stopped out before profit gets made. So that is why my trades use a PA SL which is usually a wider stop than a set monetary stop.
How do I handle the risks and DD with a wide stop? I have the wide SL in place to give the trade a chance to work. However, that doesn't mean I will actually exit at that wide SL. If things are not playing out according to my premise, the premise that caused me to take the trade in the first place, then I will often just exit way before my wide SL is ever hit. Much of that depends on the momentum against me and are there a consecutive bigger bars closing in the opposite direction of my entry direction. When I think my premise has been wrong I must exit right away even way before my big SL is hit.
The probing in an index can at time be quite volatile and I don't want to just exit a good trade with a loss, if my premise is still intact. Look at that last trade I took today. My SL had to be wide but I added on in an adverse move against me and not just added, but doubled my position size. The momentum against me was not so strong that I felt that my premise was voided. PA was still telling me there would likely be more upside at least enough to get out with a profit on second entry and a BE on initial entry. I watch not only price but I watch "how" that price was made. The reason I average down is to make a losing trade a winning trade but it must be done in the right PA context. I cannot just average down on any old trade. Context of PA is extremely important.
The other thing is if I decide to take my loss often I will then double up and reverse in the right direction, when wrong. Thus, I get my loss back in short order and much of the time printing money again.
Say I am 4 contracts long and the market goes against me. That isn't a problem. It does that sort of stuff all the time. It is extremely difficult to get an exact perfect good entry that immediately goes in my direction with no adverse reaction against it, before profit taking (but it does happen at times!). Now if price goes against that 4 long contracts position far enough and with enough momentum to tell me that my premise is now wrong then I exit with the loss, reverse directions, and sell 8 contracts and soon am at BE or in the money. That reverse action is independent of how I entered those 4 long contracts (i.e. at one wack..averaged down..martingaled..etc)