How far you going to chase ? How many are you going to keep adding ? If you know it is going lower then why even buy 5 at 1332 ? This indicates you are entering into a trade that you are not confident in from the start. If you are building a position for long term then maybe it is ok, but for day trading i see no benefit.
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How far you going to chase ? How many are you going to keep adding ? If you know it is going lower then why even buy 5 at 1332 ? This indicates you are entering into a trade that you are not confident in from the start. If you are building a position for long term then maybe it is ok, but for day trading i see no benefit.
Of course i'm not confident i got the "exact" low. How many on here get the exact low or high on there trades? case closed because it's extremely low. so if i know 90% of the time i'm not going to get the high or low why not employ an averaging technique with a strict stop on the avg entire postion? even if i only average down 1 time and set a 2 pt stop on the entire postion i have a better avg price. And for many people this relieves the stress of talking a large position up front and immediately seeing the whole postition udnerwater and creating anxiety and premature selling of the position
Porgie
18
18
Now you are letting emotion influence the trade,
How do you justify averaging into a losing position ?
In your mind you are saying, ok I was wrong on the first entry so I will buy a little more, if that goes against you u say oh i was wrong and i will buy 5, more, then it drops more and you add 5 more, by now you are sure that it has to go up because you surely can't be wrong 4 times in a row. There you sit with that deer in the headlights looks as it drops even more, are you really going to cut lose the trade ? No the majority are going to keep adding and hoping the trade comes back. The problem is even if it does and you make money on it you are giving positive reinforcement to the idea of averaging into losers and next time you will do it again and may not be as lucky. This is deadly. Maybe this strategy works if u just have terrible timing
vol,
i hear your boss screaming, volente, quit playing on my computer......
i hear your boss screaming, volente, quit playing on my computer......
vol who's averaging in to a loser? i have a strategy of averaging in to get a better avg price? as i said the chances for most people getting the exact top or bottom is almost zero. again i'm using the same 2 pt stop as you but i'm achieving a better price most of the time. you're correct if one doesn't have strict averaging down criteria and a strict stop lsoe no matter what it's a disaster. but i fail to realize why it's so bad that i get a better avg down price that most people buying 20 at one time? AGAIN I ASK THE COMMON LAYMAN ON THE BOARD HOW MANY OF YOU GET THE EXACT HIGH AND LOW ON YOUR TRADES? OF MOST GET THE EXACT HIGH AND LOW THEN SCALING IS WRONG BUT IF MOST DON'T THEN IT CAN WORK. AGAIN WITHIN A CONTEXT OF STRICT RULES
Adding to winners is not much better. You are chasing once again. If the move is real u might be okay, but if it is just a retracement bounce you are going to find your are buying the top of that short lived bounce.
I am back, I think. I have been having problems with ET all day. It would not let me post for some reason.
We have had this same discussion about averaging before. Personally I do not do this every once in a while I will add to a winning trade but I do not add to a losing trade. That being said I have been in discussions with Romik about this in the past and his explanations work for his trading system.
A lot of positional traders average in over a longer period than daytraders trader do. They do have a max pain threshold that they adhere to so it does make sense even though I do not practice this I do not say it is bad or wrong as long as a max pain threshold is set.
This is one of the reasons I tell people all of my strategies but I think at the same time it is very important for each individual to manage their own trades base on their own tolerance. I tend to take larger positions and my tolerance will not allow me to take a large loss on any one trade.
We have had this same discussion about averaging before. Personally I do not do this every once in a while I will add to a winning trade but I do not add to a losing trade. That being said I have been in discussions with Romik about this in the past and his explanations work for his trading system.
A lot of positional traders average in over a longer period than daytraders trader do. They do have a max pain threshold that they adhere to so it does make sense even though I do not practice this I do not say it is bad or wrong as long as a max pain threshold is set.
This is one of the reasons I tell people all of my strategies but I think at the same time it is very important for each individual to manage their own trades base on their own tolerance. I tend to take larger positions and my tolerance will not allow me to take a large loss on any one trade.
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