Adding to Winning trades only

Discussion in 'Strategy Development' started by march21st, Feb 10, 2011.

  1. Are there any Threads on this subject?
    It sounds like something that would be discussed.
    I did do some searching...

    the goal would be to keep losses much smaller than winners


    thanks
    marc
     
  2. Let me save you some trouble. If you have a robust backtested system, adding to winners reduces your expecation over betting the farm on every trade call.
     
  3. bone

    bone ET Sponsor

    trailing stops.
     
  4. that was something I wanted to ask [has there been some Backtesting done?]

    my biggest losers were "averaging down" losers,
    so this is what I wanted to avoid;
    and this, "averaging up" you might call it, came to mind.
    No threads here, on this topic?


    marc
     
  5. Add only if you get another valid trade signal and then manage the "add" as if it was an independent trade position.

    Mark
     
  6. rosy2

    rosy2

    i never understood adding to winners and cutting losers. when do you take profits? or do you wait for winners to become losers and then cut. :D
     
  7. You should always know your destination prior to departure. Simply, you should not enter a trade if you don't know when to exit.

    When to take Profits?

    Your exit strategy should incorporate some of the concepts from your entry strategy. For example, if you're entering trades that involve support/resistance levels...your exits should also involve concepts from support/resistance analysis.

    Mark
     
  8. the problem is when you add to a trade you think it will be a winner and suddenly it turns to a royal loser...

    Rule number 453: every trade before is closed is neither a loser nor a winner. It is just a trade.

    Rule 752: if you add to winners and you get ruined, refer to rule 453

    Maybe you wonder what the other 750 rules are all about...:)
     
  9. Visaria

    Visaria

    Nothing wrong with averaging down, as long as you have a stop loss for the entire position.