Um..so you reverting back to hindsight? I thought hindsight means nothing?? Boy you are confusing. Well this is all I am giving you. Decide!
Tell me why averaging down is a bad idea .
- Thread starter joker542
- Start date
Because I have a high win rate. The most important metric. As we speak or type or whatever just took another trade. Little ole MES worth hundreds of dollars in profits this trade.
Well not fair that you talk from hindsight and I have to talk in "could've"'s. No I will talk in hindsight too. When it's passed, I will tell you what I would've done. There.
So? A high win rate means nothing. Jesse Livermore had a very high win rate. He still committed suicide, penniless. It's not what you win that matters in trading; it's how much you get to keep at the end. You will realize that one day.
Good luck!
Remember the words HIGH WIN RATE. Drill it into your brain. Let it burn deep into it. See MOST of my average downs WIN? Why? Because I know what I am doing. That said, I am human and make mistakes so I have contingencies in place. As far as MARGIN CALLS. Let me explain: I HAVE NEVER EVER had a single margin call in any futures. EVER. BLOWN ACCOUNTS? Let me explain. I HAVE NEVER EVER BLOWN a futures account.
So may I ask have you ever had a margin call in futures? Have you ever blown a futures account?
As far as averaging down and keeping averaging and dipping into savings..etc. Like I said I don’t average down just any trade although I see multiple opportunities to do so every day. If I made a wrong judgement (which does happen OCCASIONALLY ROFLMAO) ...I know I am being a smart ass...but my patience is getting tried LOL...NOW BACK TO THE POINT... IF I made a wrong judgement then I don’t just keep throwing good money after bad (ps that too can be a myth if you know what your are doing) but even if you know sometimes you get caught with you pants down...know what I mean???...anyway if that happens I am out there faster than Bernie can say “I don’t like Trump”. And I ain’t waiting for no margin call from “the squad”. AOC can shed some tears while my wife shops at Dillards.
Ok so I suppose a low win rate is preferred and should be sought after as that is what is gonna make you a winner. Livermore was not disciplined to cut his losses when he should have because he believed he could make the BIG money by sitting. Well he did, sometimes. But see when he lost he lost big. What was it 4 times bankrupt in his trading career? Margin call after margin call. Sitting on his trembling hands hoping and a praying but NEVER gets mad at the markets. No use to get mad, he believed. Listen, smarts without discipline, even skill without discipline, will fail in the end. As our own ET buy1sell2 loves to say..it is PRM. That is the only edge he believes exist. I happen to believe a few more exists but PRM is important. Jesse threw it to the wind. At least 4 times. No wonder he ended up broke. Well not quite. But he was tired of the game.
PS You gotta get it first to keep it afterwards. Do you know how to get it?
Oh my snapshot of my last trade in post 282 did not include the averaging down trade just before it but from the short side. Oh well. You will just have to take my word for it. Took averaging down trades today ALL but two who were straight trades the kind ...the gurus stand up and clap for...one more tidbit ALL my trades were in the money 100%. Win rate 100% today. I can never seem to get any better win rate than that no matter what I do?
All this while arguing about averaging down. Excuse me while I talk to myself. “Now self you gotta quit arguing so much and trade more.” answers back...”yes sir will try to do that but it is hard you know”....”well at least try” ...”ok bye self” ..now I am back had a great conversation with myself. Have a good weekend you trading warriors. Hope you had a great day today and forgive my pitiful attempt at humour. I may not be very good at it.
All this while arguing about averaging down. Excuse me while I talk to myself. “Now self you gotta quit arguing so much and trade more.” answers back...”yes sir will try to do that but it is hard you know”....”well at least try” ...”ok bye self” ..now I am back had a great conversation with myself. Have a good weekend you trading warriors. Hope you had a great day today and forgive my pitiful attempt at humour. I may not be very good at it.
Yep, trend trader of sorts, my style is buy tops, sell bottoms. (Haha, Freudian slip.)
Lots of nay sayers say it can't be done, trading the extremes.
I'm nearly all cash, but a small percentage of held positions is gold, ramping up again on these.
My call is for stock traders not in gold is keep out till about November then review.
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Only two people seem interested. So, here we go.
Lets look at the same chart marked up abit to see if we can identify the pressures. In the chart. That is, who has the upper hand, the bulls or the bears?
If you had to make a decision to go for a measured move up (green) and SL was at the bottom of the big bar or short at the top of the big bar for a MM down with SL a MM distance up; what would you do? Taking into account the WHOLE picture what would appear to be the MOST LIKELY OUTCOME? MM up or a MM down? What would you feel more comfortable doing shorting the top of the large bar or going long at the top of the large bar? Now in this scenario the R:R =1:1 SAME FOR BULLS OR BEARS.
There are three variables in any trade: Risk, Profit Target, Probability. You can set your Risk. You can even set you PT. The one variable that is harder to arrive at is probability. You have to look at the immediate and larger context to arrive at that best guess figure. So, if you look at all this together where do you think the higher probability is? Bullish or bearish PA after the big bar?
Here is another thing to contemplate. A climax. So, what is a climax in trading?
EVERY BO is a climax. A climax in trading is an extreme move. An accelerated move. That move can be up or down. Three things can happen.
1) it can lead to a pause in the trend (can be exhaustion and price go into a range)
2) it can lead to a reversal of the trend (Exhaustion Gap that can simply become a climatic reversal in the opposite direction of the climax bar)
3) it can lead to a continuation of the trend. (A Measuring Gap that takes the size of the BO and extrapolates that same distance <<in this case>> upwards, the same distance.)
Which one of the three that is most likely to happen depends much on the context; immediate and larger.
So, if you were gonna throw some money at this after seeing the big bar (climax bar) would you prefer to go long or go short as you look at the immediate context and the larger context?
Lets define the context:
Immediate context: Gap up open, the opening gap has held ABOVE the BO point. The climax bar is the largest bar in 77 bars, tight micro bear channel (yellow ..possible bull flag), price at the moment above both MA’s, climax bar is a BO of the last 10 bars, it is big bar closing near it’s high and it is a bull bar.
Larger context: Gap open above an aprox 67 bar range (yellow). Last leg in the range is a bull channel, the channel has consecutive bull bars, larger bull bars than bear bars in the channel, 15 bull bars..13 bear bars, price breaks above both MA’s and subsequent pb’s are not going below the MA’s.
So assign a probability % number between 0 and 100. For it to go up. For it to go down. What do you think? Take your best guess at probability but base it upon what you “see” on the chart. And please no random market BS. Markets ALWAYS move because of pressures at play. They can move ...sideways..up...or down. And which way they move is ALWAYS BECAUSE of pressures. It is imperative to make an attempt at identifying the pressures at play. For instance you might say “I think there is 70% chance it will go down a MM thus leaving a 30% chance it will go up.” “Or you might say I think it has a 55% chance of going up thus leaving a 45% chance it will go down.”
Another trend channel line could be drawn across the top of the last bull leg in the range below and extrapolated on up towards and above the high of the climax bar but to keep down on cluttering up the chart any more I didn’t draw it in. There is enough info on the pressures at play to make a decision without drawing it in.
Will await any responses. This is not a trick nor am I trying to trap anyone. I am just attempting to show how we as traders can read PA and make trade decisions. If you are right or wrong it doesn’t matter. It is just an exercise that is all. Maybe some good will cone from it? It certainly isn’t to prove who is right or wrong. Like I said only an exercise. Just use your judgement and look at the obvious.
Volpri
Lets look at the same chart marked up abit to see if we can identify the pressures. In the chart. That is, who has the upper hand, the bulls or the bears?
If you had to make a decision to go for a measured move up (green) and SL was at the bottom of the big bar or short at the top of the big bar for a MM down with SL a MM distance up; what would you do? Taking into account the WHOLE picture what would appear to be the MOST LIKELY OUTCOME? MM up or a MM down? What would you feel more comfortable doing shorting the top of the large bar or going long at the top of the large bar? Now in this scenario the R:R =1:1 SAME FOR BULLS OR BEARS.
There are three variables in any trade: Risk, Profit Target, Probability. You can set your Risk. You can even set you PT. The one variable that is harder to arrive at is probability. You have to look at the immediate and larger context to arrive at that best guess figure. So, if you look at all this together where do you think the higher probability is? Bullish or bearish PA after the big bar?
Here is another thing to contemplate. A climax. So, what is a climax in trading?
EVERY BO is a climax. A climax in trading is an extreme move. An accelerated move. That move can be up or down. Three things can happen.
1) it can lead to a pause in the trend (can be exhaustion and price go into a range)
2) it can lead to a reversal of the trend (Exhaustion Gap that can simply become a climatic reversal in the opposite direction of the climax bar)
3) it can lead to a continuation of the trend. (A Measuring Gap that takes the size of the BO and extrapolates that same distance <<in this case>> upwards, the same distance.)
Which one of the three that is most likely to happen depends much on the context; immediate and larger.
So, if you were gonna throw some money at this after seeing the big bar (climax bar) would you prefer to go long or go short as you look at the immediate context and the larger context?
Lets define the context:
Immediate context: Gap up open, the opening gap has held ABOVE the BO point. The climax bar is the largest bar in 77 bars, tight micro bear channel (yellow ..possible bull flag), price at the moment above both MA’s, climax bar is a BO of the last 10 bars, it is big bar closing near it’s high and it is a bull bar.
Larger context: Gap open above an aprox 67 bar range (yellow). Last leg in the range is a bull channel, the channel has consecutive bull bars, larger bull bars than bear bars in the channel, 15 bull bars..13 bear bars, price breaks above both MA’s and subsequent pb’s are not going below the MA’s.
So assign a probability % number between 0 and 100. For it to go up. For it to go down. What do you think? Take your best guess at probability but base it upon what you “see” on the chart. And please no random market BS. Markets ALWAYS move because of pressures at play. They can move ...sideways..up...or down. And which way they move is ALWAYS BECAUSE of pressures. It is imperative to make an attempt at identifying the pressures at play. For instance you might say “I think there is 70% chance it will go down a MM thus leaving a 30% chance it will go up.” “Or you might say I think it has a 55% chance of going up thus leaving a 45% chance it will go down.”
Another trend channel line could be drawn across the top of the last bull leg in the range below and extrapolated on up towards and above the high of the climax bar but to keep down on cluttering up the chart any more I didn’t draw it in. There is enough info on the pressures at play to make a decision without drawing it in.
Will await any responses. This is not a trick nor am I trying to trap anyone. I am just attempting to show how we as traders can read PA and make trade decisions. If you are right or wrong it doesn’t matter. It is just an exercise that is all. Maybe some good will cone from it? It certainly isn’t to prove who is right or wrong. Like I said only an exercise. Just use your judgement and look at the obvious.
Volpri
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w/ the addition of yellow lines to id the channel from which price breaks out, on this updated chart:
o Makes it apparent that the wide range bar (WRB) at the end achieved, or almost did, a measured move of the channel.
o A measured move, or almost, achieved via a WRB spurting from a trading range often signals end of a move; favors a short.
66% probability price trades in lower half of a 2nd MM zone of same channel, then retraces as I suggested in prev post.
o Makes it apparent that the wide range bar (WRB) at the end achieved, or almost did, a measured move of the channel.
o A measured move, or almost, achieved via a WRB spurting from a trading range often signals end of a move; favors a short.
66% probability price trades in lower half of a 2nd MM zone of same channel, then retraces as I suggested in prev post.
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