Yes, such a dumb comment, even by elite standards. So a 2% stop is "correct" -- on a stock that moves 5- 10% / day? Maybe if you're a daytrader, but obviously OP is a swing trader and uninterested in churning his own account.
Marketsurfer says short shake shack
- Thread starter marketsurfer
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No victory yet, London. Im not talking about you or even this thread as a whole. Just overall win or lose -- its the same h8ers h8ing.
Hey Romik. Why is scaling in nonsense? No one can call moves accurately in advance - so scaling spreads provides a wider margin of error. Many pro traders trade in this manner, by the way, so i am interested to know why u think its nonsense. surf
If you take a look at Buy1's journal, the faulty thinking is evident. Surf
Why?
You short 1/3 position at 60 and stock gaps down next day by 50%, your profit was reduced by 2/3.
Scaling in reduces potential winnings in the long run.
You are speculating, not investing.
If you really have faith in your system, then it's still best to put full position on and pull trigger if timing was off. Then re-enter again full size at higher level.
You short 1/3 position at 60 and stock gaps down next day by 50%, your profit was reduced by 2/3.
Scaling in reduces potential winnings in the long run.
You are speculating, not investing.
If you really have faith in your system, then it's still best to put full position on and pull trigger if timing was off. Then re-enter again full size at higher level.
Let me suggest another way of putting the original stop loss statement: "When you take into account the fact that I'm trading only about 1/4 of my available trading equity, my 12.5% is actually closer to 3%." (or lower, likely)
Scaling in (provided we're talking moves that are going against the trader) reduces risk (assuming they would have had that size anyway) while having the same reward in the end. In cases where it takes off from you then overall risk vs reward isn't negatively affected (although max profits are).
Alot of times price may be at an ambiguous area where it's better to put on part of the size with reasonable risk. One wouldn't go full size at that price because the risk would be too high. Then if it moves against you, you scale in to it while keeping the risk manageable. This isn't the same as averaging down (even though the same mechanics are used) as the risk is kept within reasonable bounds.
There's no way somebody can know ahead of time "oh the price will definitely retrace right to me" although it may be a good assumption most of the time.
Absolutely ridiculous