Most new traders dont get this idea: Every trade should have a management plan, an entry price threshold and an exit price threshhold. The management plan can change if market conditions change but there should be a maximum risk/reward ratio that at some point requires that you take a profit or a loss.
Thanks for taking the time to reply... The key word in your reply is "whim". But had you said what you now said... I might not have debated it as much. But what we WERE debating (socratically I might add) was why add to a position that is losing.... rather than adding on to a winner. And b.t.w. not every winner should be added on to either. In order to be in sync why would one want to add to a losing position unless as part of the plan they entered less than a full allotment in said initial position; AND thus it was part of the PLAN to add on if it immediately went against them. But as I asked before... why??? Wherein has the risk reward become more fvorable by adding to a loser?! IMHO most add to loser to avoid a loss. Of course like I said, time frame is a factor in these decisions. ICe
I think it is OK to add to a loser in some circumstances. Say you trade X amount of shares or lots, enter the market too early in hindsight because you are afraid of missing the move. Ex. 38% retracement . Then I would say it's OK to add the same amount at the 50% retracement if you have conviction in the trade. In my experience it's better to scale out of the second lot as soon as it is in the black and of course exit everything if it keeps moving adversely. Helps offset the loss on the first.
:eek: :eek: :eek: :eek: I rest my "case" !! why not just buy/sell another position(s) in a different equity or option, or another futures position in a different month for example to "help offset losses........"? Huh? Regards, ICe
You don't seem to have a "case". What you do seem to hold is the illusion of some existential truth that has more than likely come from your own sour experiences adding to losers. Couple that with your own susceptibility to regard the "wisdom" you read in trading books as absolute and you have a babbling moron who has had deluded himself into believing he knows something. What you failed to realize was that a perpetual loser has no more business adding to a losing position than he did putting it on in the first place; for no matter what a losing trader does it will come out sour, because it is their job to lose. Period. Congrats on becoming the very first ET member to reach the honorary Virtuoso ignore list -- you have surely earned your spot, not only for your non-sensical idiotic postings, but also for the extremely arrogant and borderline appalling manner in which you spout it.
Then why load up short on a hunch, regardless of approach? Trend changes evidence themselves in price action well after your example. You can eliminate a great deal of risk - while foregoing greater potential profit as well - by waiting for the new trend to emerge on the charts. Intermediate trend changes are often presaged by weakening internals, weakening AD line, lower NH/NL ratios, well before price action. The internals did not weaken in the recent retracement.
Slamma, I simply took that time period as a quick example of how/why one might scale into a position vs. enter all at once.
waggie, Do you use this service? How do you like it? Are there other similar services, perhaps more complete (Hedge Fund inflows as well.) nitro