People who double down often fall into the "blow it all quickly" camp. This happens because the odds of making money short term in a double down scenario are usually pretty good, unless your timing is terrible. The problem is that over time, you WILL eventually get into a losing streak. If you just keep increasing position size, you will be toast. Very few pros use a double down strategy for this reason. When they are wrong, they bail. I personally always get smaller when I start losing. Sometimes I even go on vacation! Many traders employ a max risk per trade parameter, which automatically increases or decreases position sizing depending on performance. For example, if you never risk more than 2% per trade, it will take a long time to blow out an account as you keep risking on 2% of the account as it shrinks, thus risking less and less each time. Makes it almost impossible to blow an account if you know what you are doing.
what'd it say? I'm interested in hearing insight. Planning on quitting this week to pursue trading... And in my spare time, maybe checking out some automated systems to see if I can develop my trading plan into software.
In a nutshell if your broker shows your stop in the level II books a scalper can see and buy your stock at your stop point. At least they used to.
i just said that yours was a good post,by the way,i would stay away from automated systems unless you developed it yourself
Yeah, I plan on developing it myself. I use to play with bots all the time on legacy systems (corporate world) as well as in multiplayer online games. So I figure it'd be cool to play around this, especially since IB has a testing platform to run these on... i still have a sweet spot for good software even though i dont want to climb the corporate ladder in this field