I did it ..I did it...I did it...like yesterday! Success...success..success. Maybe you might consider trying and find out???? On the other hand maybe you should not try and find out. It might go badly.
Last edited:
is there ever a good time to average down?
- Thread starter mute9003
- Start date
A trader can start off with biggest position first, then as it moves against him on a PB add 1/2 of his original position size. If it moves against him again add 1/2 of his second position size on that third add.
Or if said trader is feeling zesty and full of optimism and is convinced with 60% to 70% probability of soon coming PA in his favor based upon his directional bias then he can with start smallest size first and double size on each successive add (not that I am advocating you do this. Just saying what I as a trader/scalper would do). When she turns the corner I (should it work out LOL) will be printing some coins rather quickly. If she breaks strong against the position after having loaded up then I exit immediately and double - my entire previous position size and go with the newly found flow and quickly get back my loss and back to printing money.
Don't do it. Recency bias is a bitch. People get delusional and brush off the few big losses they will experience and just remember the many times it does work in their favor.
I generally go for 1 to 8 points on each trade. And try to do so on each contract in a trade that has multiple entries. Sometimes I get out at BE on my initial entry and profitable on my last two entries. Sometimes I even lose on my first entry a small amount but make money on my last two entries and so overall the trade becomes a profitable trade. As you can see all three entries in that last averaged down trade exited with profit. And thus is goes..... No one can convince me not to average down when the contexts are correct. It does require discipline to exit when wrong and double up and reverse to get back in with market flow and get back any loss quickly. Many traders cannot be nimble enough to do that so generally speaking those traders are better off not averaging down.
That last trade where I averaged down I did so with first entry 3 contracts on the initial entry, then second entry reduced to 2 contracts, but on last entry double up my total position of five contracts with 5 more contracts making a total of 10 contracts. Why? Well there are multiple ways to average down or scale in. I want out quickly with a profit. Got other things to do and also don't want the market closing on me with an averaged down position.
Green are long entry prices for each trade and brown or orange are the exit prices for each trade. Again, three trades. First two just plain long trades and last trade was an averaged down trade with three long entries and one 10 contract exit price.
Happy 4th July! Don't be too sad or mad about Mr T. If he wins it will be good for the market and the country overall . Ya'll will see!
That last trade where I averaged down I did so with first entry 3 contracts on the initial entry, then second entry reduced to 2 contracts, but on last entry double up my total position of five contracts with 5 more contracts making a total of 10 contracts. Why? Well there are multiple ways to average down or scale in. I want out quickly with a profit. Got other things to do and also don't want the market closing on me with an averaged down position.
Green are long entry prices for each trade and brown or orange are the exit prices for each trade. Again, three trades. First two just plain long trades and last trade was an averaged down trade with three long entries and one 10 contract exit price.
Happy 4th July! Don't be too sad or mad about Mr T. If he wins it will be good for the market and the country overall . Ya'll will see!
Last edited:
Don't watch YouTube.
Recognize the difference between averaging down and scaling into a position.
Generally, averaging down means you're wrong and you keep increasing your position and risk in order to get out at even or for a small profit. It usually don't end well. The problem with this is that it can actually work very well at times, so you may start thinking it's a smart approach.
Scaling into a position where you have a plan in advance is different, i.e., I'm expecting a pullback to 15-10. You take your first entry at 15 and take another entry at 10. As long as your risk management is correct and you have a plan I don't see a problem with this.
Generally, I prefer to add to a winner, though, so I may choose to instead take the first loss and get in at a better price around my stop-out point or lower and then build a better position as the market proves me right (by moving in my predicted/anticipated direction). That's the way to bring home some really big winners without taking on much initial risk at all.
Best example is a smooth trend day where you have an early entry and keep adding while your average is still way below or above market.
Scaling in is the same as averaging down.
Except you greatly reduce the possibility of a catastrophic loss.
Think Enron
Well, if you're buying you a hype. You have bigger problems.