Risk Management is the answer

volpri said:
Here is an example of scalping and averaging down this morning or scaling in to make it sounds nice.

Price in a sideway established TR. 80% of BO attempts top or bottom fail so odds favor shorting in top 1/4 bar 12:25 and adding bar 12:35 as it moves against me which I did. Then exited bar 13:05 (green triangles on big bear bar) as it moved down in my favor making money on my second entry and at least breaking even on my first entry.

Second trade at the bottom right. Long Entry bar 13:15 at bottom of TR. Exit one bar later bar 13:20 with a 3 point gain.Again betting on a FBO (failed BO of the bottom of the range). Did not scale in on this last scalp.

We been in TR over 50 bars. Odds favor a successful BO top or bottom so I am keen a being careful scaling in at this point. Looking more for a successful BO vs range trading.

Before anyone asks why didn't I trade all those other FBO attempts to the left in the TR? The answer is simple. I wasn't at the computer! I was busy doing other stuff. I didn't even have the computer on. But yes, there were many possible 1 to 4 point trades in this 50 bar or more sideways move. Trading "noise" as some pundits say and who strongly advise against it. Well give me so-called noise. I'll trade it as long as moves are wide enough or broad enough for at least a 1 point scalp.


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volpri said:
it is likely getting too late in the session to look for a BO. Could happen but doubtful. I may make one more TR trade. Just have to see.

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I hate last minute stuff LOL\ even more so in FEB.
BUT i do take some lower probability trades/ like that senior, some times:D:D
I've made more money on smaller bid\ask trades in metals ; but larger %%moves in ETFs...............
As far as fishing ,LOL like the old timer said who could have been a commercial fisherman if he Wanted to ''if i want to eat fish, i get a can of tuna [or salmon, sardines]fish @ store''LOL
He gave all his fish away:D:D
 
The late Charles Munger (partner of Warren Buffet), has said many times "invert, invert, invert" when attempting to solve a mystery. He also said he was not well liked by many people because he was always pointing out the contradictions and flaws in their explanations. When evaluating an investment or trade, this is classic Risk Management psychology.

Just stay out until things go so far they can't go any more. A perfect example is a horizontal breakout that explodes to the upside, then returns to the shelf. That's basically bedrock. Consider NVDA. Think it can't get that far down? If it does, it's probably not going much further, in the short term.
 

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NVDA had strong relative strength when the indexes were still at their 2023 lows. The channel had a bear trap, got to rinse out the weak longs & lure in the shorts before breaking out of the channel.

* I was not in NVDA for this move. *

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There was an old trader in here who quit posting years ago, but he knew The Obvious. Those failed breakouts were his clue to "snack on a retail trader", as he put it. :D
 
Bear/bull traps are the bread & butter for seasoned traders. They can be found in all time frames & typically have awesome R:R. I post the chart for others to see what I am talking about.

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Not exactly, because of my inferior psychology. I usually buy flags at the end of a momo divergence, especially if they're nested on two or more timeframes. APP was the latest. Woke up to a nice surprise.

Speaking of, NeVer going Down Again just blasted after earnings. That's what we call a tail!
 
A "tail" is slang nerd speak for a huge outlying event, completely away from the bell curve, on the phat tail that can extend to insolvency for anyone betting the farm on mean reversion by averaging down.

They tend to make the hair stand up, and there is the cat picture to give you another image of how exciting "tail events" can be!
 
Wide Tailz said:
A "tail" is slang nerd speak for a huge outlying event, completely away from the bell curve, on the phat tail that can extend to insolvency for anyone betting the farm on mean reversion by averaging down.

They tend to make the hair stand up, and there is the cat picture to give you another image of how exciting "tail events" can be!
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Your avatar has a really fat tail, very appropriate. :thumbsup:
 
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