Tell me why averaging down is a bad idea .

volpri said:
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Overnight likes to blame Mr T’s tweets LOL. But yet he is willing to hold 1 lot for A 500 point drop. What the hell does that tell you?...
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What does it tell YOU? Use a whole shit load of little stops on the conviction of a trend and lose a fuckton of money, or hold through the bad times on a swing, when a single tweet from the POTUS causes a correction?

Who is wrong and who is right? I must have your attention, since I am the single person you named in your missive. Perhaps I gave you pause? And no, I am not lauding myself here. But why did you have to name ANYONE in your post? Sheesh.

Why don't YOU try holding through a 500 point drop, and see where a good stop placement would be. Hmm?
 
volpri said:
While you sit I’ll be averaging down and making some money. I even have averaging down techniques in downtrends and uptrends but I have to be jack on the spot..nimble and QUICK and KNOW when to jump over the candlestick.
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Look sir, I will admit. You must have a crystal ball that will tell you that your averaging in will eventually win you big bucks. Kudos. What I have learned through anecdotal evidence is that it is a very risky business. It works great in a ranging market, but not a market which keeps trending opposite your position., It WILL eventually bite you in one way or another.
 
Overnight said:
What does it tell YOU? Use a whole shit load of little stops on the conviction of a trend and lose a fuckton of money, or hold through the bad times on a swing, when a single tweet from the POTUS causes a correction?

Who is wrong and who is right? I must have your attention, single I am the single person you named in your missive. Perhaps I gave you pause? And no, I am not lauding myself here. But why did you have to name ANYONE in your post? Sheesh.

Why don't YOU try holding through a 500 point drop, and see where a good stop placement would be. Hmm?
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Sorry I only said what you yourself said in your own post. That you were willing to lose 500 points on a single contract or did I dream this last night, overnight?

PS I am never and I repeat NEVER EVER as long as this earth exist and there is power to the exchanges gonna hold through a 500 point drop. I will have kissed that trade goodbye a long time ago, doubled up, and gone fishing the other way.
 
volpri said:
Sorry I only said what you yourself said in your own post. That you were willing to lose 500 points on a single contract or did I dream this last night, overnight...
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You are referring to my post where I mentioned, sarcastically, that I would sit through a 500 point drop. Since you do not follow me, you did not see how I sat through a 600 point drop in May on a single micro.

This is what swing trading entails. It is TRUE swing trading. It is holding on, with your balls of steel, through the rough times. That trade that I swung through, I won. It has to do with market behavior, expiration dates, rolling, etc.

You and I are on different wavelengths here I reckon'. I really like the averaging idea, but in current market conditions, it is safer to hold as a swing, rather than average a loser.
 
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volpri said:
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PS I am never and I repeat NEVER EVER as long as this earth exist and there is power to the exchanges gonna hold through a 500 point drop. I will have kissed that trade goodbye a long time ago, doubled up, and gone fishing the other way.
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And this is EXACTLY the problem with what you are thinking.

Enter March 22nd, 2019. If you went long at the start of the day, you would have held on and held on. It drops 100 points. Right as you reverse and double short it? It went right back up to where your first entry was in 2 weeks. Classic Feb 2018. Now you are in a world of shit.

Volpri, you and I have seen all sorts of market conditions. I know this. Why are we arguing? We just disagree and have different ideas on averaging vs. swing.

We're both trying our best. But I think my method is a bit more preservative of capital. My wins will be less, but my losses will be less also. That is all I am trying to say here.
 
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Overnight said:
And this is EXACTLY the problem with what you are thinking.

Enter March 22nd, 2019. If you went long at the start of the day, you would have held on and held on. It drops 100 points. Right as you reverse and double short it? It went right back up to where your first entry was in 2 weeks. Classic Feb 2018. Now you are in a world of shit.

Volpri, you and I have seen all sorts of market conditions. I know this. Why are we arguing? We just disagree and have different ideas on averaging vs. swing.

We're both trying our best. But I think my method is a bit more preservative of capital. My wins will be less, but my losses will be less also. That is all I am trying to say here.
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You still don’t get it. I don’t advocate averaging down on every trade in any context. And I am not gonna hold on and just hold on hoping it will come back, when I have averaged down. Every trade I average into has a point of adverse movement where I figure my premise to be wrong and I will just get out and wait for an opportunity to get it back. But more often that not, it is not hit. I maintain a high win rate. That is the most important metric for a scalper like myself and actually for any trader but they will argue about that too until they are blue in the face. Nothing substitutes winning and I simply don’t care about how many theoretical concepts one can invent to back up the myth. Multiple entries and exits afford compounding profits and comm is a small price to pay for it. I know I know...what the blasted gurus say..don’t overtrade. That too is a myth unless your mind is, in the moment, weak or not sharp, then best to stop for the day. One trade has nothing to do with the next trade. I can trade from open to close. A trade can actually be made on most any bar if one has a tactic and can manage the trade correctly.

We have been taught many myths IMO and it is hard to undo all that BS and actually get on the right track. Why do most traders lose? They take heed to all the BS that is floated around as reality and keep those authors happy with the sales of their books and courses. There is only one author IMO out there that I know of (and I have my share of trading books believe me) that has been written with anything of real substance that will endure for the lifetime of the trader once learned and that is Al Brooks works. Yet he gets labeled charlatan...selling snake oil...etc....etc. In spite of that he sells his stuff for a pittance unlike other educators who sell their stuff 1000’s for sh?t that is obsolete by the time you learn it.

I’m not a shill for brooks ..I don’t care if anybody EVER buys his books or courses..but the man knows what he is talking about. Most traders are too lazy, and picking their noses, instead of poking their nose in his books and courses to learn something worthwhile.

I agree to disagree. I’m actually in a piss poor mood today it has nothing to do with any trading today so don’t ask..ROFLMAO

Goodnight Overnight,

Volpri
 
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volpri said:
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I agree to disagree. I’m actually in a piss poor mood today it has nothing to do with any trading today so don’t ask..ROFLMAO

Goodnight Overnight,

Volpri
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I will agree with this. :-) Tomorrow is another day. A bloody Powell day, sure, but just another day. See you on the 'morrow.

 
Maybe I'm in the minority here, but I do think Volpri offers some value. I realize that these discussions are pretty binary, not much left for nuance (it wasn't like this in the old days, but alas...). I think there is a good deal of value in studying the time of day reversal patterns as well. It's not really much of a secret, widely discounted really, but time and time again, these sharp drop days have a tendency to reverse on a dime at a very specific hour. The concept of averaging down into these events is not foolhardy (within reason).
 
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