Are you suggesting not to add to a winner on pullbacks but only at the broken breakout level via buy stop or short stop ? If so, considering your realized is deep in the money, how much size are we talking about on the breakout add ? Takes me by surprise because I was thinking only to add on pullbacks using isolated stops on every add-original piece. Thanks for your input.
Yep same goal here. I have mastered not adding to losers and respecting my stops. This is new territory for me, and I plan to exploit on this new year with my new size.
If you look in Anek's Struggling Trader thread, I believe you will find charts illustrating adding contracts.
Nice discussion. I really like this. I'd say my top 3 goals this year are (not necessarily in order): 1. Improving entry points to be able to get into trends earlier even if this includes a number of false starts. 2. Once in the trend to stay in it and ride it longer and not jump in and out so much. 3. Once in the trend and in a winning trade, to add to it and find the best entry points and best size. And also to have a good, well defined exit strategy or strategies if the trade begins to break down. Along with everyone else, I've learned the hard way along the way that adding to a losing position, averaging into it, is almost always a mistake. Period. Your mind says something like, "Oh, this is going against me. But if I buy some more (or sell some more), my break even point will be better and then when it comes back here in a minute I'll make some good money." And that is a possibility. But what seems to happen more often is that the trade continues to go against you and now you're losing even more than you would have if you had maintained only your original position. Then maybe you say, "Shoot! I'll buy (or sell) a few more and average down a little more." But when it goes against you even more you're basically really screwed. And also maybe then the loss is so big you're unwilling to exit hoping it will somehow come back. This is called "Denial". And as they say, "Denial" isn't a river in Egypt. Thus adding to a losing position rarely is a good thing to do. It's better to cut your losses short quickly, and then reassess the market and take it from there. Also if you're quick enough, and tuned in enough, you can just flip the trade, as NoDoji has pointed out a number of times, and a lot of times you'll quickly recover your small loss and move on to a nice profit.
I may trade QM more in working on improving my executions of these strategies as there's less risk involved and more opportunities, dollars wise, to phase into a winning position. The extra commissions really aren't that significant.
I'll look through these as I have time which you obviously can too. Let us know if you find one that is especially good. "Adding to a winning position" http://www.google.com/search?hl=en&...aqi=g-v1&aql=&oq=Adding+to+a+winning&gs_rfai=
Thanks for sharing that. But there seems to have been some controversy when he left ET. Which isn't to say there isn't useful info in the thread. Didn't have time to read all of this thread. "How did Anek make a 100 grand today?" http://www.elitetrader.com/vb/showthread.php?s=&threadid=144717