Isn't the appropriate way to look at this to take into account the full universe of possible edges that match the formula: %Win * $AveWin - %Loss*$AveLoss - Comms > 0 That's the only fixed rule a profitable trader needs to worry about. Everything else is hearsay. Q1
I don't know what a RED postion is; but i do know what a red position is. When you have a red position you NEVER add to that position. A losing position is a RED position; if it would be a closed trade you wouldn't be able to add to that position. You can only add to an open position. If your system is bad any kind of stop will fail. So your conclusion is wrong. Give me a explanation of how your stops work and i will give you entrypoints where your stop wil never work correctly. First have a good system, and only secondly have a good stop. The way you use stops has to be based on the behavior of your system. You have to run calculations on your system to define your stop. Conclusion:"Only losers add to losers." As long as you don't understand what this means you will be never become and surely never stay consistently profitable.
spike500 Thank you so much 4 your advice. And don't change your nickname I will ask 4 your advice again in 2 years time. Don't want waste your time now. BTW, I NEVER add to a RED position(one day i will do); Stop is part of my system. The real good traders add to a RED position with confident and come out winner. It is part of their strategy. I am not up to that level yet. Only you know if your "shoes" is comfortable or not 4 yourself. Happy trading
trading always comes down to emotions of fear n greed. that's why u have to always use stops/bracket orders.
All of you folks are writing cliches' and what you think sounds good... It's all bullcrap... I know for a fact several strategies imploring averaging down, pyramiding, breakouts, trading the trend...bla bla Michael B.
I never add to a losing position and always keep my stops in upon entry; however, I have no problem re-entering the position the instant my stops get hit if that's the trade I feel needs to be done. A waste of a commission+spread it may seem, but a far smaller price to pay in comparison to the alternatives.
That's indeed the way to go. I hope Learner reads this posting and thinks about it. Message for Learner: I'm daytrading since 1990 and still survive. How many daytraders survive after 15 years of daytrading? I never ever changed nor will change my nickname.
I probably should be clearer - I don't "add" to losing positions per se. My system takes trades when called for. It buys and sells according to set parameters. It may take a new position on a stock that recently was a bad trade. No big deal. A trade's a trade and over time the profits out weigh the losses. The main point is that I've found the most reliable trades to be at the edge of the fear/greed dimension. People sell when it's a bad idea, and they buy at unseemly times. I endevour to take advantage. Good luck. C.