I double down once in a while, but since my initial risk isn't that great, I'm comfortable doing so. Doubling down infinitely would not be as smart. And particularly so if initial risk is already high.
Don't have the details worked out, but lets just look at it visually. Blue dots here mean the open. Green dots are just random longs that I mark since I look for longs at previous swing lows. Red dots are shorts are previous swing highs. Not saying all of these trades are taken. And many trades are also missed since I use a 1 min chart and this is a 5 minute. Also, I have other levels marked out where I would look for trades. So this is just a rough, hindsight illustration. But I think its fair to say that each green dot, for a long, has a place there you could get a BE exit if you scaled in, lets say 10, 15 or 20 points lower. (once again, not providing the specific details). Likewise, any shorts could also be exited for either profits or at least break even trades. There is only one long here, the one marked via the red arrow, that appears it doesn't give an exit before the close and would be a large loss on a scaled in position, so this might be a big loser, but you also have to take into account that there might be reasons to exit the trade and take the other direction. Clearly the devil is in the details, but my point is that an exit for a loss isn't always the best strategy. If you set aside in your head how much money you are losing, and instead focus on the fact that the market will hardly ever go in a straight line and likes to screw both longs and shorts, you can develop a method you're keeping more of your money. Clearly knowing when you are obviously wrong and can pivot on a dime helps tremendously.
I'm not a day trader. What I do know is that if you have a plan and don't follow it sooner or later it will bite you in the ass. Like you say the market likes to screw with your mind. A lot of the time it will reinforce bad behavior by rewarding you for making a bad move (like ingoring your stop). No one lies to themselves more than a trader who is in a losing position. One of the top reasons that traders fail is letting small losses turn into big losses. It was your term MAX loss that got me to wondering if your plan had stop losses that you planned to ignore. My theory is that if you follow your plan it's a good trade. If you get stopped out and the trade would have made you a pile of money, it's still a good trade with a bad outcome. Maybe you should stop keeping track of what happens after you close the trade. Just take the next set-up. So I respectively disagree that getting stopped out for a loss is not the best strategy. After all it was you who decided in the calm prior to opening the trade where to place the stop loss. Changing your mind in the heat of battle means you were wrong.
Probabilities say go long in an uptrend, short in a downtrend. Not double-down doing the opposite. Probabilities "win the race".
I couldn't agree more. And this is the best strategy for most people. But after a very long time, you start to wonder why you keep getting screwed and how to improve on this. Keeping losses small is good, and placing an entry very close to an extreme where it should take off from or its a failure right away is always best. A great entry with a tight stop is the most ideal situation. But usually entries can never be so great, and this is where scaling comes into play.
%% Good points\ but they would have to be real, real new\ to predict Even a real high probability like Stock Traders Almanac, JAN forecaster= Jan = down =88% chance of a down year. But when that JAN forecaster fails, it can fail big like 1987, 2009. Wonder why they call it weather forecasting + not weather prediction?? LOL