--Average or "add" trades which receive postings on ET, are an attempt to mask poor timing skills, or the fact that trades are not real, or to announce that one is not able to admit when wrong. --Don't be an Average Joe-- --Thanks, Izzy-- (By the way, whether posted or not, averaging is not a good long term strategy except for 401k'ers)
On top of the good comment I will add, that lack of precision is evidence of lack of price action knowledge.
compared to 401k'ers, no trading strategy will ever beat them. But you need income to invest, and that is their edge over a trader who just starts with a lump sum and has to rely on "precise timing."
Absolutely, the best way to get out of a trade is with a profit, the next best way is to honor your initial stop. You can develop skill at averaging and profit or scratch the great majority of the time. However there are times when the market simply does not turn around, leaving you in a world of hurt.....best to avoid the practice. Get used to losses, they are part of trading and are unavoidable.
oh is this the old "Never Average Down" thread revitalized? don't even get me started any trading rule which starts with the word "Never" should never be followed how bout, "Never average down in a trending market if you are on the wrong side."? Is that good enough for ya? The average Joe is always looking for some rule which starts out with the word never or always.
There is nothing stopping you or anyone else from averaging if that's what you want to do. The only point is there is great inherent risk in the practice. Also breakouts and breakdowns occur all the time out of non-trending markets.
yep, it's a mine field out there. Just don't be an Average Joe and always do one thing or never do another. If it was that easy we'd all be rich.
well then I guess it is finally settled once and for all. But if all I cared about was money and I didn't actually have to show up and do the job, I would much rather sit in my pajamas maxing out my 401k than trying to take a one time lump sum and trade it for fifty years. Trading isn't the best way to make the most money, but in my opinion it is the best way to spend your life.