Registered: Jun 2011
07-08-12 05:27 AM
that's why we trade pairs, if one goes to hell it should probably be good for their competitor, if the market climate is good, it should probably be good for both of them, if that market climate is bad, oh well, you have the same problem as everyone else, but at least you have two out of three covered.
Quote from oraclewizard77:
OK. I totally disagree.
1) The 1st rule is to find an edge. If you don't have an edge, the rest is meaningless since randomly trading will not make you money.
2) The 2nd method is to determine what you want your win% to be. Yes, with a lower win%, you need to let your winners run more. With a higher than 50% win %, you can have breakeven or sometimes negative risk to reward.
3) Scaling in or out depends on your system. If you are averaging in because you don't want to take a loss, that can be bad. If before you enter the trade, you have set stop, and plan to average in as long as the stop is not violated, and this is part of your trading plan, that can be fine.
4) If like me you use a chart to trade, then sometimes the chart of price will help determine the stops and targets.
If you trade without stops and targets and are profitable over the long run, fine. The problem of not having stops is when something goes wrong, lets say you are long a stock, and the CEO let with all the money and fled the country, your no stop is going to hurt.