if you add longer time frame chart, you can realize those area are pretty safe. i shorted twice in those area.
That's exactly why I suddenly decided to use no stop, because I looked at the daily chart and saw that a short trade at that level was safe. There was a similar daily chart setup back on 5/20, where you could've gone long at the open with no stop because price had fallen so far over the previous couple weeks and closed the day before with a textbook reversal signal to the long side. In case you did that without a plan, all you had to do was switch from day trader to swing trader and ignore that pesky little $5000 draw down per lot until price came back for you several days later, because price always comes back. The only real loss is a realized loss. :eek: In all seriousness, trading without a stop or a plan was the cause of many huge losses when I started out, and I surprised myself by doing that today after months of pure discipline this year. I can recover from a $150 loss on a trade in about 5 minutes, so there was just no excuse for it.
I have never done and will never do it = Averaging down or No stop. I have personally seen and also read several failures due to this. I will give up trading if I ever realize that without doing this I would not make money. It has been tatooed in my brain that this is a sure shot receipe for disaster and I do not trust my luck at all ( for making easy money ). But I was thinking of a different way of averaging down. e.g. say now CL is 81.40 and I think I have a long signal and if that signal is valid CL will not go below say 81.30, then how logical it is to buy below that price and upto SL price say on 81.35 , 81.33 ... and SL for all to be say 81.30. so in one way I am averaging down but at the same time I have a valid stop. Does anyone trade like this or ever traded this way and how was your experience / thoughts ?
I've done that, particularly in ES (second TICK extreme), a few times in CL (almost hits my stop in what looks an exhaustion move) if my target makes the extra risk worth it. Some system traders do that when they're in a position and get a second signal in the same direction. The risk is you may start talking yourself into "adapting" your stop to the later entries. Thus, an initial 20 tick stop becomes a 30 tick stop when you add 10 ticks in the red and then a 50 tick stop when you decide to "give it room to breathe" and make it 20 tick from the second entry, etc.
Couldnt get much going this am. Had a good short when it failed to continue. Had some good entries as well but kept getting stopped out at BE. Learning to hold winners though. This last short at 82.23 was a good area to be short from but it just wouldnt break (book kept swiping up and down) Its breaking down as I type this now. Was waiting for NEWS I guess. Everyone have a great day.
Thanks Kid, but so far it looks bid to me - just damning my timing - too late after the news, too soon before the pullback I thought it was a good trade, so I gave it more leeway than I usually do