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Dustin

Registered: May 1999
Posts: 1849

09-03-12 04:26 AM

Quote from Wide Tailz:

Would this example suffice?

Here in lies one of the most common rookie mistakes in my opinion. Why trade some choppy index garbage like the above chart, when charts like below give daily opportunities (all from this past week)? You make one good trade a day and you feed your family and fund your retirement.

picture hosting

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Wide Tailz

Registered: Sep 2011
Posts: 1519

09-03-12 04:33 AM

Quote from Dustin:

Why trade some choppy index garbage like the above chart, when charts like below give daily opportunities

I found the same thing to be true when backtesting simple trend following algos. Signal to noise ratio was the most important consideration.

Thanks for the examples.

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Daring

Registered: Aug 2012
Posts: 676

09-03-12 04:35 AM

Quote from Dustin:

Here in lies one of the most common rookie mistakes in my opinion. Why trade some choppy index garbage

I think having no capital and being mesmerized by leverage has a lot to do with it.

Totally agree with you, equities can offer great ATR, way superior to forex or index futures.

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riffrafffpatrol

Registered: May 2012
Posts: 203

09-18-12 03:01 AM

Quote from Daring:

I think having no capital and being mesmerized by leverage has a lot to do with it.

Totally agree with you, equities can offer great ATR, way superior to forex or index futures.

Look... if you are constantly getting stopped out-- the problem won't be solved by averaging down.

You need to learn to identify the areas of highest probability... highest profit potential... with lowest risk on the charts. Key areas of supply and demand. There are specific criteria that determines where buyers and sellers exist... in all time frames. Learning the ins and outs of this combined with proper position sizing and risk management are the keys to success.

Averaging down is a sure way to blow an account... it is a fools game where one rationalizes that since one cannot determine one support or resistance level from another... the way to overcome is simply continue to add at various levels until one produces a reversal. Absurd.

Learn how to trade properly... exit where proven wrong... and then RE-ENTER.

Any who have kept themselves from working at Burger King by averaging down have succeeded at doing so by pure luck... probabilities not.

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Dustin

Registered: May 1999
Posts: 1849

09-18-12 03:13 AM

Quote from riffrafffpatrol:

Any who have kept themselves from working at Burger King by averaging down have succeeded at doing so by pure luck... probabilities not. [/B]

Yep, 15 years of pure luck here. If that's the case I'll take it over skill any day

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oldtime

Registered: Jun 2011
Posts: 7357

09-18-12 03:15 AM

I told you as soon as you mention averaging down all the crazies come out of their books and charts and start telling you why you are wrong

some people have a very shallow idea of trading and believe they can foretell the future

I treat it like a business and if I am trying to buy inventory I prefer to buy it at better and better prices

sometimes I'm right sometimes I'm wrong, but I usually have a decent average price

when I'm wrong the setback is horrendous, and that is the risk I am willing to take. Not sure why taking many small losses is preferable to taking one large loss.

If you don't understand it, I agree, you shouldn't do it

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