Trading Winning Positions - The optimal approach

1a2b3cppp said:
Here. Price is 50. You add 1. Now it goes to 51. You add 1. Now it goes to 52. You add 1. Now it goes to 51. Last position closed. Now it goes back to 52. Do you add another one? Now it goes back to 51. You have a number of losses. Now it goes to 52. Do you add another one? Now it goes to 53.

To what extent do you let it go back and forth in the middle?
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You should take the opportunity of suggesting a better way forward, at least because it might help me improve what I'm doing.

Let's suppose price is at 50 and already in a consistent uptrend. We enter long at 50 and the TA conveniently suggests a SL at 49. Let's suppose price continues upwards to 56 without any significant correction but then drops to 55.

What I would do is buy at 50, 51, 52, 53, 54, 55 and 56. The SL on all open trades is always set at 1 below the highest new entry price. When the 56 trade opens, all the stops are at 55. Now price drops back to 55, and all trades close simultaneously.

My net profit from the 7 trades is 5 + 4 + 3 + 2 +1 +0 -1 = 14. That's 14pts from a maximum move of 6, and a stopped out price of +5, and achieved with no account capital risk greater than 1 at any point. If these things mean anything, that's a r:r of 1:14.

Please go ahead and outline an alternative strategy given the same uptrend scenario that matches this without greater risk and with at least equivalent r:r.
 
tomorton said:
No. A new position is added at each grid increment, i.e. 1. All stops on all positions are set at the penultimate grid price. So if price goes to 52, all stops on this latest trade plus all already open trades are set at 51. When price hits 51, all trades close simultaneously.

The chart now goes back on the watch-list in case the TA would support a new trend-following buy and the start of a new series of pyramids.
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Now this isn't the same as forex grid trading?

Here buy one at 50, price hits 51 and you buy one and move all stops to 50. Price hits 52 and you buy one and move all stops to 51. Price hits 51 and you close all positions.

Can I consider this correct?
 
tomorton said:
You should take the opportunity of suggesting a better way forward, at least because it might help me improve what I'm doing.

Let's suppose price is at 50 and already in a consistent uptrend. We enter long at 50 and the TA conveniently suggests a SL at 49. Let's suppose price continues upwards to 56 without any significant correction but then drops to 55.

What I would do is buy at 50, 51, 52, 53, 54, 55 and 56. The SL on all open trades is always set at 1 below the highest new entry price. When the 56 trade opens, all the stops are at 55. Now price drops back to 55, and all trades close simultaneously.

My net profit from the 7 trades is 5 + 4 + 3 + 2 +1 +0 -1 = 14. That's 14pts from a maximum move of 6, and a stopped out price of +5, and achieved with no account capital risk greater than 1 at any point. If these things mean anything, that's a r:r of 1:14.

Please go ahead and outline an alternative strategy given the same uptrend scenario that matches this without greater risk and with at least equivalent r:r.
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Provided you were uncertain that the trend was going to keep going up, this way makes sense. Otherwise you would go long with your largest position first and make 35 instead of 14. This sounds like you are not able to successfully predict market direction. Do not feel bad regarding this. You are not the only one. Hence this forum.

Risk reward doesn't mean much, though. When price touches 50 I can buy with a stop loss of 1 and a goal of 80 and have 1:30 risk reward. Who cares?
 
1a2b3cppp said:
Now this isn't the same as forex grid trading?

Here buy one at 50, price hits 51 and you buy one and move all stops to 50. Price hits 52 and you buy one and move all stops to 51. Price hits 51 and you close all positions.

Can I consider this correct?
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This is what you do but I don't know if its the same as forex grid trading.
 
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