Break Even Trades

Discussion in 'Trading' started by Lobster, Sep 13, 2003.

  1. Does anyone else think that the reason why 50% retracements are so common is that traders like to break even? They double down and exit at break-even.
  2. No
  3. There are two themes on retracement:

    1. It is an edge strategy for people who enter their first trades well after open (when retracement is occurring) to not have to deal with what they face up to that time each day.

    2. It is easy money for people who make money using high daily money velocity trading themes that are comprehensive and not edge trading. What is call sytems trading here nowadays doesn't fit this description.

    The 50% stuff is a myth used in 1. and not in 2.
  4. Good to know. Thank you for your research. It would have taken me decades to make sure there was absolutely no-one else who thinks that. I don't know how you do it, but you have saved me a lot of work!
  5. How common are they? More common than, say, 38%, 62%, or 79%? Or even 25%, 33%, 67% or 75%? We all know prices retrace, but what makes you say 50% is so common?
  6. Ken_DTU


    50% retraces seem to be the most common...

    in a similar thought, there's 4 types of trades (think of a 2x2 grid):

    1. small wins
    2. big wins
    3: small stops
    4. big stops

    the trick is, just get #1, 2,3 and no #4s

    or, think of small wins/stops as near-breakevens.. that leaves us with a goal of, work for large wins and no large stops... that's it.

  7. A better trick is to get 1's and 2's and no 3's and 4's.
  8. damir00

    damir00 Guest

    i don't understand "seem to be". either it is or it isn't, it's a matter of counting and dividing.