Pyramiding: Playing with the market’s money

[ironchef]

You're missing the fact that as you scale in or out, every move for or against you moves in that exponential fashion. Your $10 per tick move become $20 or $30. Or $50. As you scale in/average down each per-tick move becomes more prevalent. It is rough to experience. Don't do it unless you are well-heeled.

But you have a trailing stop?

 

[Xela]

Don't do it unless you are well-heeled.

And he really means well-heeled. High-heeled isn't enough: I've tried.

 

[Overnight]

And he really means well-heeled. High-heeled isn't enough: I've tried.

Hell yeah!

It sux that this stuff is 40 years old now. Man, good times. But where has the time gone? Eeesh.

 

[volpri]

Buffett is not a trader, he is a long term investor. He buys blocks of stock over time and is happy in the short run when that stock goes down because he gets to buy his next block at lower prices.

You mean average down a losing position?....well now...ugh! MR. WB DOES THAT?

Somebody on ET needs to warn him of this destestable behaviour...ROFLMAO

 

[SteveH]

You mean average down a losing position?....well now...ugh! MR. WB DOES THAT?

Somebody on ET needs to warn him of this destestable behaviour...ROFLMAO

Someone should have warned him not to insure BOTH of the Twin Towers against a full loss. And you saw them trying to defend that they only had to pay for one building since the same thing happened to both buildings on the same day, making it "technically" ONE event. That's the kind of stupid thinking that panic creates

 

[tomorton]

100 traders would operate on different timeframes.

A weekly view of an uptrend can have multiple countertrend days.

A countertrend day can be the start of a change in Dominance of the prior multi-day/weekly/monthly trend.

A change in Dominance in this countertrend day is first revealed on a 5min chart.

On a 5min chart, Dominance changes frequently in 3-5 bar combinations.

Since Dominance changes frequently on 5min charts, not every change in Dominance is the start of a trend that is seen on larger aggregations of time.

However the changes that ripple up through aggregations of time are seen on multi- timeframes as turns with coarser more filtered views occurring at one end of the observed spectrum and finer more detailed views at the other.

Like tuning into a radio station, any group of traders are attracted to ‘genres’ of music/talkshows that most resonates with their personality, temperament, resources, goals and lifestyle.

Although listening to multiple music stations at once can sound like noise, the cacophony can also sound like music to a trained and appreciative ear.

Who does this help in trading and how?

 

[learner2007]

100 traders would operate on different timeframes.

Yes, but galvin888's said:

In real life, it is almost impossible to say if the market is trend or range bond. You can only know the market is trend or range from hindsight.
Ask yourself a simple question, what is the current trend of EUR/USD ? If you ask 100 traders, you will get mix answers between range bond and trend up/down.

So those 100 traders would have to view the same time frame in order to answer. And no matter what the time frame is for the chart he chose, the answer is so obvious that the 100 would most certainly agree.

 

[Sprout]

Who does this help in trading and how?

Learning to read what the market is saying is a trait of a successful trader. Like reading, there are levels of skill based on and built upon fundamental concepts.

Also like reading, when one achieves a fluency, there are nuances in meaning that can only be perceived by practitioners of that specific language.

Every specialized field of endeavor has developed it’s own vocabulary and language out of necessity to facilitate understanding.

 

[monee]

If you are playing with the markets money you could possibly increase position size.
I would not take a second trade after the 1st entry.(assuming the trade is in the same direction).The first trade is going to have the better entry.If a 2nd signal appears I would stay in the 1st trade.

 

[monee]

Hell yeah!

It sux that this stuff is 40 years old now. Man, good times. But where has the time gone? Eeesh.

40 years,that's scary!