Martingale has to do with doubling position size every time you get stopped out, whereas averaging down is just adding shares. Just because price drops doesn't mean it goes against you ..it goes for you because it allows you to increase your potential profits. I would not be thrilled if the price took off after my first leg in...I would see it as a missed opportunity. You guys need to rewire your brains.
Doh! No thanks, I'll keep my sane brain. Against might turn into more against and more and more. I don't still live with my parents and not have to earn my keep. Stop trying to avoid being wrong. Wrong is no biggie. Geez. Admit move on to next trade.
Have you guys never heard of averaging down lol? It's not the martingale system. There is no getting stopped out or taking losses...there is no doubling of position size... completely different. It's also nothing new...it's how you get a weighted average lol
Exactly. And that's how most noobs blow up their account. I've traded through 3 bear markets. How many do you have under your belt? If you have, you wouldn't write such a stupid claim (and I'm saying this in the most polite manner as I possibly can).
Lol, it's not. Doubling down is the classic martingale. If you keep adding to your position while the price goes against you (i.e. averaging down), it's still called martingale strategy. You should really read about it to understand the risks before it blows up on your face.
Former Hedge Fund Head Connie Brown writes about the time she worked for a guy who entered a bond trade with orders for the broker to double his position every two ticks it went against him, all with no stops - then went out to lunch. That day The Fed intervened creating fast market conditions and just like that he was down $27,000,000 Busted and shut down the next day even though trade, if still on, would have been back in the black. 27 mill gone to money heaven. So you either have to hope your luck never runs out (it does for everyone at some point) or you to have yuuuuuge liquidity to handle the drawdowns.
Hello BlackPhoenix, You are right about that, a buddy of mine was showing me one of that EA algos in forex, it just keeps adding on to losers forever. It works for awhile, until not enough money in account.
Gambling is not knowing how much you are going to lose. Like any gambler in Las Vegas who just keeps playing blackjack or slots even if he has already lost thousands of dollars. That is the bottomless pit for losers. Risk management is something you have to learn. The risk of ruin holds true if you do not protect your capital with a stop loss. You will blow out your account guaranteed. Only question, is when?
It's no How is adding to a position at cheaper prices a system? It's common sense lol Maybe I'm forgetting how bad most traders are at TA...it would make sense why you don't understand it if you don't use EW...you are pretty much throwing darts in the dark. This isn't just adding shares willy nilly just because price drops ..it's a measured approach based on expectations supported by data