Tell me why averaging down is a bad idea .

[cambridgesoho]

How about alter his strategy with debt put spread? The loss is limited but winning chance is high since it’s over sold?

 

[Overnight]

have u ever thought about what you just wrote and why this happens? do you really think it is because all of your studying planning and experience were just wrong? nope. ur being gamed constantly and not just you but the entire lot of retail

B1S2 is talking about trading psychology, not trading mechanics.

 

[Overnight]

Sure it will fail sometimes but a trader has to have things in place to mitigate the loss. You have to have your stoploss in place big enough that will keep you in the trade but also take you out if price gets to the stoploss and to do so within your risk levels. If a trader cannot do this then sure it would be better to not average down. You got to be mechanical about it. ..

I missed this from a few days ago, and just wanted to address it...

Remember early May? I took a big loss by cutting my loss short, because it moved rapidly wrong. When it fell like 150ish points or so, I thought, "buy the dip". So then I bought in a single MNQ instead of a single e-mini.

It then proceeded to drop another 600(?) points after that. And then, it reversed, and came back into profit like 3 weeks (?) after entry.

Feb 2018 was an example of a real fast V. Oct 2018 was an example of a slow moving V. So how to determine which V is forming? I thought March 22nd was going to be a month's long V deal so I cut my loss short for like 100 points. But no, it was ONE DAY. Yeah, I cut my loss short, but I just happened to do it at the nadir of the drop. If I had held onto the thing for just one or two more days? Profit! These decisions are very tough, sure.

 

[tiddlywinks]

Remember early May? I took a big loss by cutting my loss short, because it moved rapidly wrong. When it fell like 150ish points or so, I thought, "buy the dip". So then I bought in a single MNQ instead of a single e-mini.

It then proceeded to drop another 600(?) points after that. And then, it reversed, and came back into profit like 3 weeks (?) after entry.

Let's see...
In a period lasting somewhere north of 3 weeks, and an adverse (NQ?) movement of roughly 750 points, the ONLY trade you saw to take was an add? What were you thinking during the first 20,30,50,100 points against you? Oh wait, thats rhetorical... you were thinking and wishing.

Feb 2018 was an example of a real fast V. Oct 2018 was an example of a slow moving V. So how to determine which V is forming? I thought March 22nd was going to be a month's long V deal so I cut my loss short for like 100 points. But no, it was ONE DAY. Yeah, I cut my loss short, but I just happened to do it at the nadir of the drop. If I had held onto the thing for just one or two more days? Profit! These decisions are very tough, sure.

Again thinking and wishing. Where is it written "V" is required? Why would it be a "month long V "deal"? Right, Just 2 more days... nothing like non-acceptance, even now, of your trade, and your (lack of) plan.

And currently, you are sitting on another multi hundred point adverse position. This time in YM. What were you thinking when it was 20,30,50,100 points against you? You have not learned. But hey, whadaya know, thinking and wishing is scalable across instruments!!

Maybe change your nick to ON. Overnight is definitely off.

 

[Overnight]

Let's see...
In a period lasting somewhere north of 3 weeks, and an adverse (NQ?) movement of roughly 750 points, the ONLY trade you saw to take was an add? What were you thinking during the first 20,30,50,100 points against you? Oh wait, thats rhetorical... you were thinking and wishing.


...

No, the trade I saw was to close the loser. Then after it dropped a bit more, I went back in long. It's in my journal. I do not recall the exact dates and details.

 

[bone]

Ok here my trading system outline,
look for potential reversals . wait for it to go into oversold zone.
keep adding similar positions in oversold zones like 3-4 times max. Then for the last position added , put stop loss of like (.3)-(.5 )%. and if stop loss is hit then probably I am wrong about reversal and I get out of trade.

Relying upon oscillators as a primary trade entry indicator is ruinous.

Oscillators are fine if the entry can be reliably confirmed with another indicator or rule set that is not an oscillator. But using oscillators in isolation is just begging for trouble.

 

[Overnight]

...

Maybe change your nick to ON. Overnight is definitely off.

And one more bit, which is a reminder to you, and all others who forgot why I have this nick in the first place...

It is because my biggest concern has always been, and always will be, the overnight margin required on any trade in futures (Yes, even daytrades. Overnight/initial margin is the king of swinging rules). I plan my trades all around that, which is why I cannot yet trade any decent size to reach my goals.

 

[tiddlywinks]

I cannot yet trade any decent size to reach my goals.

Trade-size is not your problem. Unless your intent is to blow out quicker.

 

[Overnight]

Trade-size is not your problem. Unless your intent is to blow out quicker.

*sighs* Well, you and I have different visions of market swings I suppose.

 

[tiddlywinks]

*sighs* Well, you and I have different visions of market swings I suppose.

Possibly. But all your ballyhoo about YOUR taking significant point losses (to the tune of 100's of points per), which you have peppered inside many related and unrelated threads virtually everyday recently, relays that this is not about a definition.