I haven't read the whole thread but here is my take. It makes no mathematical sense to avg down unless your position size exceeds the amount of liquidity available at the price you are willing to pay. This shouldn't be a problem for many at ET It may help some psychologically. I saw someone say averaging down reduces slippage because limit orders are used . Limit orders can still be used when not averaging down so I don't see the difference in that aspect.
your first responsibility is acct management, so you can keep the store open during bleak times,averaging is fine as long as it is within your size and loss parameters,so is any other type of trading,at this point you have to use the style of trying that fits you best and maxes your returns,for instance , i can't scalp well,so if i chose that method,it would obviously be a mistake, if there is another style i am better at,assuming risk is the same,profit would be larger
You have to take into account win%. If you have a high enough win%, risk vs reward can be even and sometimes risk can be greater than reward. This is important since whenever one trades, one needs to pay commissions. So if most days and trades can be winning, you get 2 benefits, you are not paying lots of commissions for losing trades, and psychologically its easier to trade when mostly you win. I would say the only issue is not to revenge trade on a day where you finally take a losing trade, it may just be a bad day where your normal setups are not going to work for the day, and its better to trade another day. I do notice some days all my setups work and some none of them work. I am not at the point like NoDoji where I can just trade and wait for every setup throughout the day. I would not mind be at the point where I can hold some contracts for more profit.
Slave-- you aren't getting it. My trigger is based on supply and demand and the hard right edge. My zones are mapped on a 15 min time frame. I also map hourly zones. I use the 5 min for ideal entry-- that is where I will look for a reversal candle often.. however I am not trading based on a certain pattern. I watch the daily chart strictly to see where price is relative to major moving averages. I have trendlines drawn on the hourly 15 min for reference... but first and foremost-- I trade based on where supply/demand exists on the chart... COMBINED with where the indexes are and if they are currently in demand or supply. Relative strength/weakness is extremely instrumental in which trades I take.... net change from prior close during the premarket-- then net change % from open relative to the market... then finally from the hard right edge of forward looking price. Continue to think you've got me figured out-- it is very amusing to say the least. The feathers here sure are ruffled... wow! LOL I truly don't believe you fully understand the strategies that T3 employs. I don't need to see a formal trade record. I have enough proof after being on their site for almost 2 years on the tactics they use and the effectiveness of them. Virtual trade floor... twitter feeed... prricepiont sheet... off the chart newsletter... morning call videos.. daily recaps.. all the levels are given each and every day-- it doesnt take rocket sciience to figure out if their analysis is sound or not. Again-- whether I subscribe to T3 philosophy or not is irrelevant.... amusing that you are so obsessed with this issue. Your comment about charting packages having different patterns visually is absurd. If you are in the same time frame-- its all the same... albeit for a technical glitch. A hammer on a 5 min is in no way shape or form confused on another package with a hanging man (this is location issue.. the candle obviously looks the same). And I'm not sure what patterns you are looking at... but there are certain patterns that are extremely reliable on the shorter time frames... IF you are using mutiple time frame analysis and consider the context along with the context of the market.
asking what mathematical formula you use for a pivot, is there only one emperical formula known to the trading world,or several subjective ways to arrive at it,hourlys ,weeklies,15 minutes,seems there is a little room there to have more than one empirical head kahuna ...which one is empirical
Please do not derail and be considerate, the main topic remains, Averaging Down. If you would like to discuss pivots, or trendlines, or pink elephants, please begin your own discussion. Thank you