How much to add to a loser?

You can use TA. Price should respect previous support levels in a bullish trend. There can be multiple support levels. If 2 are broken in a row, then you are probably trading the wrong direction.

 

I like to use the most common ones. EMA 20,50,100

Thanks for the Easymon link, very interesting

 

Here's a take on adding to a loser...
https://elitetrader.com/et/threads/...t-right-here-baby.335635/page-21#post-5372796

 

That is one the most Dunning-Kruger-esque posts on ET!

1) Scale-in is not about "picking" tops and/or bottoms. Scale-in is a technique that is deployed when your methodologies and trade plan dictate.

2) Scaling-in to a loser is a technique to attain a "better" break-even point.
Scaling-in to a winner is a technique to increase ALREADY EXISTING (unrealized) profits.
NB: Losers can be longs or shorts. Winners can be longs or shorts.

3) Scale-in to a loser vs scale-in to a winner DO NOT CANCEL EACH OTHER. A failed scale-in winner will almost always exit with at least some profit. A failed scale-in loser will almost always be a bigger than initial loser. Again, methods and trade plan dictate, hence, "almost always" is my bias.

 

I have seen mention of Dunning-Kruger before. I am not of a mind to look it up at the moment, but how can what you say in point #3 be true?

If you scale into a loser, you have decreased your avg price. If it then goes in your original direction, you are amplifying your win by getting closer to BE by your original non-avg entry.

If you scale into a winner, you have increased your avg price. If it then goes opposite your original direction, you are amplifying your loss by getting farther away from BE by your original non-avg entry.

 

Why are you comparing apples and oranges?

In theory there is no difference between theory and practice. In practice there is. ~ Yogi Berra

 

It isn't apple to orange, it is apple to apple. I am not explaining it properly I guess.

 

Adding to winners is a vastly more superior strategy than adding to losers.

You're welcome.

 

%%
Good points.
NEVER add to a loser, not to be confused with 5 minute noise.
Could add to a winner, IF its part of a well tested battle plan.
Sometimes something changes after you enter the trade I just remembered i kicked FAS out one time+ good thing i did/LOL.
AT that time it was not funny, but kicking something out[exit] was the best.

 

@trader1974 One of the most enduring sayings is cut losses early and let winners run.