I would like to discuss averaging down

Question for those applying it successfully.


Is averaging down better applied in A B or C ?

A) Downtrending instrument shorting / Uptrending instrument buying

B) Downtrending instrument buying / Uptrending instrument shorting

C) Ranged instrument, large extension from the mean

My personal comments would be

A) Doable

B) Suicidal

C) Doable

Now which one is best, A or C ?

Thanks

 

C is the most easy since the ranges are hard lines on the chart. You could have multiple lines on the chart, and average down if the 1st line does not hold. Of course you need to determine you are in fact in a range market which is the hard part.

 

you have to look at this as a strategy that has a large occassional risk and the the cost of that one account shattering risk will be larger if your caught long than short,to go with that, the chance of a large windfall profit goes into the shorts acct, preferably it would be a reversion to the mean index, this reduces that blowout chance to either side

 

Why do you keep mentioning this large occasional risk to the buyside when there are limit downs implemented in most indices?

 

the limit down move would be far beyond most retail traders max stops..not sure i understand your question

 

You can't dumb it down like that as you need to mix timeframes to get a better view.

The correct answer would be C inside a larger A.

 

couldn't agree more lol, lmao, rolling on the floor laughing, lol, I prefer using your model, I like your rules, thanks for sharing that with us, we will all now be more profitable due to your contribution

how is that you do it again? I was lol ing so hard I forgot what the positive contribution you made was

but yes, I agree, everybody should do it your way (lol)

lmao

I like the results you have posted

Hey, can I trade with you?

I'll work really hard

thanks again for the valuable input, can I get more of this on your website?

what was that? work with us dot com?

you crack me up

and that is good, because this averaging down is not a piece of cake

 

it's really pretty simple, you buy at 5 and then again at 2 which gives you an average price of 3.5 which is a hell of a lot better than 5 if you still think it is going up

If they didn't teach you this in kindergarten stay in school young man, and you should get it by second grade

then it is safe to drop out and start trading full time

 

RTE,

I could be wrong on this – but OP originally asked about averaging down… which I think over the discussion here in – has evolved into RTM (granted both could be interchangeable terms - at times)


That said

For an RTM strategy to work....

Wouldn't the overall need to be C

And the actual entries be B

With the anticipation price would reverse from the extreme and move back near/ to – the mean... or even to the other extreme


Maybe I’m wrong and not thinking clearly

===================================

Btw; this question is not advocating or dissuading anyone from RTM strategies…

Its simply me asking a question...

Remember there are countless ways to trade - this is but one of them..., as is mine


RN