This thread is absolutely hilarious. To the author of the thread, what you are doing IS NOT AVERAGING DOWN. To the responders PLEASE READ HIS FIRST POST BEFORE STARTING ARGUMENT.
??? Averaging down and averaging up require the same level of skill: none. Any putz can give scale orders and buy every so many points down. And the same putz can place orders to buy on stop. However, it is PSYCHOLOGICALLY more difficult to average up than average down. Traders instinctively find it easier to cut their winners short than let winners ride, and to let losers ride than cut losers short. And then people wonder why so few retail futures traders succeed. Imo, traders who average down are too weak to admit they have made an error in judgment. When they add more as the position goes against them, an error in judgment can easily become a costly mistake. A weak trader is an inevitable casualty.
Actually it's another great thread discussing yet another aspect of trading. That of traders who work with very lage size ($250k - $1mm). Like nkhoi reminded me, and as avarus has stated previously, if you have the combination of a lot knowledge and trading skill, and a large account to work with, you can do very well. But that's a big if. Good trading, JJ
5) When the trend changes, read when a massive support level is broken and held, take a loss and trade with the new trend. ........TRADE WITH THE NEW TREND!!!!!!!! P.S. From original post
Actually it's another great thread discussing yet another aspect of trading. Yes and it's a good idea to talk about the same thing.LOL
LOL man, what are you talking about? B1S2, one of the strongest and most knowledgeable traders on the board, will add to a position if the intermediate trend moves against his initial stake, but the primary trend holds. ... and while the scalpers (myself included) cavort in glee over our short-term gains, he will just sit back and watch prices rise another 50 pts (ES example) in his favor. So in the final analysis users of averaging down philosophies B1S2 (among others) and averaging up methods (Anekedoten comes to mind on that one) both require extraordinary skills and knowledge if they are to be employed successfully (you know, pretty much like everything else in life). Good trading, JJ
Obviously the bigger you build your position (either thru averaging up or down) the more skill you need to have as the smaller your margin for error becomes as you build.
What he is describing is buying retracements in uptrend. To me, averaging down is lowering your cost of entry regardless of trend. Read first post.
Everyone knows good trading is extremely boring so you want to avoid anything that increases stress in your trading - cause its never worth it in the long run.