What do you need in order to make '4 ticks a day' happen? In a word, What are you waiting for? "If Wishes were Horses Beggars Would Ride." Some old dude.
From forex, stocks, to futures; I'm pretty sure majority of people who has ever traded, tried this at one point in their trading journey. Averaging down, reverse with doubling up, martingaling etc...it's so ingrained in us. But lke you said, it doesn't always work. But it will work often enough to make one be complacent and get caught one day and just lose their freakin minds and blow up.
Good Morning hilmy83, Question for you please? When a trader trade without averaging or scaling in (like Volpri is describing), what does the trader do when a trade does not work? What is his or her next step after the trade loss or when it does not work? Thank you,
No. Unless you’ve already defined an entry at the lower prices for the long. The strategy you’ve outlined is increasing your risk in a trade that is moving against you. It’s easier to manage risk having max position at the beginning of a trade and take partials as it moves in your favor.
I personally do S&R (stop and reverse) because I trade opening range breakout setups. I'm betting on that price range to expand right off the high volume open.
Hello hilmy83, Exactly, you would have personally kept on trading, even though you loss on the last trade. The same applies to those who scale in, if they take a loss, keep on clicking and recover the loss. No matter what, have to keep on clicking. If a trader average in, and refuse or do not know when to exit for a loss, that trader is being irresponsible. If a trader average in, and exit for a loss and does not how to recover the loss/drawdown, that trader is being irresponsible. We all keep running from the drawdown and loss recovery and replaces it with allllllllll other excuses. In case anyone forgot, we are Guessing Ass Day traders, better getting use to losses and pain, no matter how you trade.
Yes it can happen….blow up…blow out..blown to smithereens. It can also happen without using the techniques and in fact probably does way more than using them since most traders don’t use them and blow up anyway, if we are inclined to believe the stats of failed day and intraday traders. The deal is; using the techniques the blowout can happen really fast. Again if a trader doesn’t know the context in which to do it in then it foolish to do it. Many who have tried it I suspect did it on a whim, or to just try and avoid a loss, or revenge trading. And not to increase probability. Such lost souls are throwing good money after bad. The context has to be right and a trader has to know how to use it and when. For instance, yesterday morning using it (averaging down) going long was potentially the death of an account but using it (i.e. averaging down or scaling in if the semantics are too hard to swallow lol) going short was printing money over and over. Much more than just trailing one position down to the bottom. That is, entries and exits over and over in a big move make more than one entry with a trailing exit for the entire move. Again because of the phenomena of probing during the move. As concerns doubling up when I find myself on the wrong side of the market in terms of direction and am losing then I often just exit, take the loss, double up, reverse direction and have a higher probability of getting back my loss with 1/2 the movement needed as opposed to reversing with the same size position as used on the losing trade. Higher probability yes…but it means more risk on and likely less reward in terms of distance traveled for PT, but quicker to get back a loss and print some money. If price continues in my favor after reversing and doubling up I can always get back in but I have cleaned out the loss and quickly. I am not waiting and struggling all session long to get back a loss and end the day profitable. This works for me because of the context and the probing for fair price and the probing for increased transaction points. However I also have to understand the proper SL placement or it becomes a losing strategy even IF I get the doubled up direction correct. And I cannot be greedy. Don’t hold a doubled up position for big movement unless momentum is strong. Just get the loss back and maybe print some money then reassess for a new trade. I don’t want to get whipsawed on a double up position because of the market probing and bad SL placement or me being greedy. If the market gives me back my previous loss I grab it then go from there…maybe a new trade right away maybe wait for a new setup. There is nothing more disgusting as an intraday trader scalping than the market than getting back a previous loss and not taking it because of greed to then only see it evaporate and even worse suddenly get stopped out on an even bigger loss. Greed has compounded the loss.
All strategies can work if the market conditions are right. For example, just having a small account (weekly swept) where one engages in high risk tactics can be an effective firewall. In theory only the balance of that account is at risk for catastrophic loss and liquidation. The psychological effects ripple beyond the firewall though and require different tools.