Discussion in 'Trading' started by trader1974, Oct 15, 2020.
Many times it works out but I don't think it's the right way.
Add to winners instead.
Add at the next support/resistance level, depending on if you are long or short, that's how the pros do it.
Statistically speaking adding to winners works better. It can be difficult emotionally but if you can get past that you can make some money.
Depends upon your tactics.
Not advised unless you have a plan to make it worth the R:R. Even then better to get the feedback with a stop ending the trade, and place another trade in a winner, imo. It depends upon your tactics, so there are places for it in some plans, but certainly not all.
Making it integral to your tactics introduces a bigger loss risk and time in trade risk, which must be accounted for. Perhaps your tactics are not as developed as one might thinks-wants-needs to handle it, or would be better off without it.
This will largely depend on the stats of your edge. My observation over 20+ years is that strategies "fading" (mean reversion) a move usually "add to losers" and strategies following a move (trend following etc) usually "add to winners". This is a gross oversimplification of course. Ultimately it always depends on the operator.
If it's a DCA on an index ETF then it's OK. If it's a bet on others, better be damn sure one is on the right side.
I think adding winners would be a lot better than adding losers. yes, it is quite difficult to pass them but once you have done it you can make a lot of money.
Adding to losers will cause u to lose everything in the case the stock fails.
It's a timing bomb if you keep adding to the losing trades until one day and within that day, you'll blow your account at worst case scenarios. So, it's a big NO.
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