For CL, I could never trade it the way I do if I was managing OPM. I'm an intraday scalper, and my method of trading it becomes more difficult above 6 lots because of issues with fills and slippage. But that's not significant size. If I managed OPM and wanted to swing CL longer term, I'd likely be positioning 100 or more lots at a time. So I'd be accumulating or distributing during pullbacks and which is both with-trend trading and averaging down. I'd certainly never consider fading a trend, which is a dangerous thing for any retail trader to do. I'm not sure I understand what you disagree with. I trade both ways and only upon a confirmed signal based on an in-plan setup. I know my odds and my R:R in advance of every trade. Also, I know in advance what I will do next if stopped out. This is an important little step that prevents me from over-trading/revenge trading.
I'd be scared trading any size on CL. Seems like one guy (who knows probably more than you about oil positions) can move this thing way beyond your stop.
============= Nitro Well your first post had a lot more meat in it than this one. Also averaging down could/can work great; only when many of the trends are down.Averaging counter trend is a good way not to respect risk.Ask LTCM; if only LTCM had just a little more time for that counter trend averageing down to work ............................................ And while not all traders like the long side , even in an VERY extended bull market,LOL .You may NOT want to average down on BEAR Stears, old GM [bankrupt], old LEH [bankrupt]....................[LOL.If you like profits.] Thanks
You taking the tool to suicidal extremes. I can use a knife to slice the meat that will feed my family, others might choose to use it to slice their wrists.
I backtested average down and doesnt seem to work that good. its kinda like martingale. but taking a second trigger on a stronger signal can sometimes work. like if you buy at RSI3 then RSI2 and RSI1 are legit triggers and its technically not averaging down because you are trading three different systems.
Averaging down, the art of transferring losses from realized to unrealized due to fragile egos and inability to re-enter at typically better prices. Sorry for hitting a few nerves