My view is its possible to grind out a smallish profit via TA or tea leaves but it certainly isn't an edge. Its premise is fatally flawed. surf
gotta love ET lol. I dream of 1% a day consistency on size. Thats why people blow up risking too much on a piker account.
I do not think you should add to a position that goes against you. I would put on my initial position and keep it untouched until it reach target price or stop loss level. Check the sucess-rate of your positions and adjust your stop-loss according to that. Let's say 1 out of 3 positions reach target-price. For example, then setting a stop-loss equal to half the range from initial position to target price would have you on break even. This assumes you have some kind of way to predict target price. I would try to approach your problem systematically, also regarding position size, it depends on how much money you have and how many losses you expect to have in a row, meaning how valid your analysis has been historically.
Ya never know...anything can happen when you dream big... http://www.elitetrader.com/et/index.php?threads/topsteptrader.275976/page-136
Wow so much input from everyone thanks guys. I guess I have a lot to learn and reevaluate everything. My question to you Tom is what happens if you have been wanting to short a stock. With your analysis you believe this stock is going lower. However it is very hard to initiate the short position when your stock is moving in the opposite direction of where you think it will go, especially when you have no idea how far the market can take it. Hence you wait for the market to confirm your analysis before initiating a position. (This is something i am working on, having no emotion to price but selling when people are buying(resistance) and buying when people are selling(support)) Thus you chase the entry to position(instead of waiting for another high) when market starts to confirm your analysis/direction. But in the next few days, your trade rallies with huge momentum in the opposite direction....thus causing you a loss on the position. However after doing a thorough analysis, price shoots up only to squeeze shorts into a perfect shorting area. An area of resistance where if price breaks above, everyone who was short would give up and accept loss. I almost accepted my loss until, price creeped back below resistance and signaled a trap. Thus I was at a loss on my position, but this was THE AREA to short. Someone else mentioned on this thread, that I shouldn't always believe in market rules and believe in your hunch. Anyways one of my big shorts is IBB. http://emptymindtrading.com/2015/06/29/shorting-biotech/
Well it depends on the precision of your analysis, but keep adjusting your stop loss further back as the position moves against you is not for everybody. But if you go with moving your stop loss then calculate your average risk per trade and compare it to the success-rate of your trades and do some back-testing to find the optimal stop loss and profit taking. It's just about money management.
Going with your hunch can be fine, but you need to work in some kind of controlled environment, meaning risk exposure.
I only really have one solid advice to give you. And that is, value every cent of your money! Don't give it away.
I shorted AAPL because I saw a top forming and the consensus was bullish. The ETF that I was all in on was IBB. Too bad I chickened out of holding that much size right before it tanked.